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:

The 2021 Policy Statement represents yet another daft attempt by a partisan majority of commissioners to use bureaucratic red tape to weight down all transactions—not just potentially anticompetitive ones—and to chill M&A activity in the United States. Notably, the majority goes far beyond the status quo that existed before the FTC adopted its 1995 Policy Statement on Prior Notice and Prior Approval.  Today’s action constitutes yet another end-run around the Hart-Scott-Rodino pre-merger notification framework that Congress established in 1976.  In attempting to justify its actions, the majority oversells the benefits of its actions and significantly undersells the harms, including further divergence from the Antitrust Division of the Department of Justice with respect to merger review policies. And once again, the majority that ostensibly seeks to “democratize” the FTC has denied the public the opportunity to provide notice and comment on an important policy issue.

* * *

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:

E. John Steren
Member of the Firm
Patricia Wagner
General Counsel / Chief Privacy Officer
Jump to Page

Privacy Preference Center

When you visit any website, it may store or retrieve information on your browser, mostly in the form of cookies. This information might be about you, your preferences or your device and is mostly used to make the site work as you expect it to. The information does not usually directly identify you, but it can give you a more personalized web experience. Because we respect your right to privacy, you can choose not to allow some types of cookies. Click on the different category headings to find out more and change our default settings. However, blocking some types of cookies may impact your experience of the site and the services we are able to offer.

Strictly Necessary Cookies

These cookies are necessary for the website to function and cannot be switched off in our systems. They are usually only set in response to actions made by you which amount to a request for services, such as setting your privacy preferences, logging in or filling in forms. You can set your browser to block or alert you about these cookies, but some parts of the site will not then work. These cookies do not store any personally identifiable information.

Performance Cookies

These cookies allow us to count visits and traffic sources so we can measure and improve the performance of our site. They help us to know which pages are the most and least popular and see how visitors move around the site. All information these cookies collect is aggregated and therefore anonymous. If you do not allow these cookies we will not know when you have visited our site, and will not be able to monitor its performance.