Earlier this year, the US Federal Trade Commission (FTC) and Department of Justice (DOJ) released a draft of their 2020 Vertical Merger Guidelines. Brattle Director of Global Development James Keyte has authored an article for the American Bar Association’s Antitrust magazine that provides a description of and some observations about the draft guidelines, as well as addresses what is not currently included.
The draft guidelines appear to reflect what the FTC and DOJ are doing in practice when assessing proposed vertical mergers. However, whether they offer the thoroughness and clarity to provide reliable guidance to the legal and business community is uncertain. The draft guidelines contain important revelations about how the agencies have been performing their vertical merger analyses. For example, they have increasingly been abandoning traditional vertical merger analyses in favor of assessing rivals’ access to “related products.” The agencies also consider some traditional concepts and measures, such as the analysis of market structure, to be less relevant than other measures, such as a 20% safe harbor.
Seemingly, there is an equal amount of relevant information that was included in and absent from the draft guidelines. The final guidelines would benefit from adding an overall analytical framework and describing the marketplace conditions under which the agencies would have no concerns, independent of the 20% quasi-safe harbor. The final guidelines should also provide a thorough discussion of burdens of proof and the issue of remedies.
The full article, “The Draft Vertical Merger Guidelines: A Modern Approach, But Gaps and Questions Remain,” is available below.