August 11, 2020

Volume X, Number 224

August 10, 2020

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Congressional Pressure Builds for Increased Antitrust Scrutiny of Vertical Mergers

In a June 18, 2020, letter to the heads of the Antitrust Division of the Department of Justice and the Federal Trade Commission, several U.S. Senators expressed their views that the draft vertical merger guidelines (“Guidelines”) (first released for public opinion on January 10, 2020) need to be strengthened and completed as expeditiously as possible. In the letter, these Senators noted the following:

Going forward, the economic chaos caused by the pandemic may lead to profound structural changes in many industries and a sharp rebound in mergers and acquisitions activity, as cash-rich companies and investors seek to acquire struggling businesses and assets at bargain prices. Many of these transactions will be vertical mergers, and inevitably, some will raise significant antitrust issues.

These Senators advocate for more rigorous antitrust enforcement of vertical mergers supported by Guidelines that, among other things:

  • describe new “potential theories” of competitive harm;

  • eliminate the safe harbor for transactions at or below 20 percent market share;

  • address innovation effects in the context of vertical mergers;

  • make clear that the burden of establishing efficiency defenses, including the elimination of double marginalization, rests with the merging parties;

  • explicitly state that vertical mergers are not presumed to be inherently procompetitive; and

  • include a discussion of vertical merger remedies.

While vertical mergers have garnered more attention, revising the draft Guidelines as these Senators advocate would represent a significant shift in vertical merger enforcement and signal a more narrow view of the many benefits of vertical mergers.

©2020 Epstein Becker & Green, P.C. All rights reserved.National Law Review, Volume X, Number 177

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About this Author

John Steren, Epstein Becker Law Firm, Health Care Litigation Attorney
Member

E. John Steren is a Member of the Firm in the Health Care & Life Sciences and Litigation & Business Disputes practices, in the Washington, DC, office of Epstein Becker Green. Mr. Steren devotes a significant portion of his practice to helping health care organizations manage the antitrust risks of joint ventures and other business arrangements. He also focuses his practice on other complex commercial and civil litigation matters.

202-861-1825
Patricia M. Wagner, Epstein becker green, health care, life sciences
Member

PATRICIA M. WAGNER is a Member of the Firm in the Health Care and Life Sciences and Litigation practices, in the firm's Washington, DC, office. In 2014, Ms. Wagner was selected to the Washington DC Super Lawyers list in the area of Health Care.

Ms. Wagner's experience includes the following:

Advising clients on a variety of matters related to federal and state antitrust issues 

Representing clients in antitrust matters in front of the Federal Trade Commission and the United States Department of Justice, and state antitrust authorities 

Advising clients on issues related HIPAA Privacy and security

Advising clients on issues related to state licensure and regulatory requirements

202-861-4182