January 17, 2022

Volume XII, Number 17

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January 15, 2022

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Federal Trade Commission Continues Quest to Stem the Merger Tide

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.

©2022 Epstein Becker & Green, P.C. All rights reserved.National Law Review, Volume XI, Number 308
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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...

202-861-4182
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