The Federal Trade Commission (FTC) has reimplemented a policy of requiring all merger enforcement orders to include the requirement that acquisitive firms obtain prior approval from the FTC before closing any future transaction in the relevant market. The new policy, approved by a 3-2 vote over the dissent of both Republican appointees, follows the prior rescission of the FTC’s 1995 policy statement that rejected prior approval requirements due in part to the high cost imposed on companies subject to such orders, the effectiveness of the notification requirements of the Hart-Scott-Rodino Antitrust Improvements Act, and the harm caused by disparate enforcement application made possible by the prior approval requirements.
The new policy goes further than the pre-1995 policy in its effort to deter mergers. For example, the FTC now:
- will consider seeking prior approval requirements in transactions that are abandoned after litigation commences but before trial;
- may, in “situations where stronger relief is needed,” seek prior approval that covers products and geographic markets beyond just the relevant markets affected by the merger at issue; and
- will require buyers of divested assets to agree to prior approvals of any future sale of those divested assets for a minimum of 10 years.
In dissenting from the issuance of this new policy, Commissioners Christine Wilson and Noah Phillips summarized their views as follows:
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For additional information about the issues discussed above, or if you have any other antitrust concerns, please contact the Epstein Becker Green attorney who regularly handles your legal matters, or one of the authors of this Antitrust Byte: