WASHINGTON, D.C. —­­ Today, the Department of Justice’s Antitrust Division and the Federal Trade Commission released new Vertical Merger Guidelines, replacing the 1984 Non-Horizontal Merger Guidelines. The new document describes how those agencies plan to evaluate the likely competitive impact of vertical mergers (which do not eliminate direct competitors) and whether those mergers comply with federal antitrust law.  

“The new guidelines are largely positive,” said Asheesh Agarwal, Deputy General Counsel at TechFreedom. “On one hand, they recognize that vertical mergers can help consumers and competition. They also reject radical proposals to create a presumption against vertical mergers in the tech sector, which could have hamstrung funding for innovative start-ups. On the other hand, the new guidelines create substantial uncertainty by eliminating a safe harbor for smaller vertical mergers.”

“Both the FTC and Antitrust Division deserve substantial credit for undertaking this effort,” continued Agarwal. “This approach is consistent with an initiative across the Trump administration to increase transparency in guidance and enforcement decisions by regulatory agencies. Such transparency guards against abuse and helps the agencies maintain their hard-earned reputations as straight-shooters.”

“But the guidelines would have been even more useful had they expressly addressed the AT&T/Time Warner decision,” noted Agarwal. “Both the trial and appellate courts rejected the government’s vertical theories, ruling that the first suit to stop a vertical merger in 40 years lacked an evidentiary basis. Yet the guidelines continue to present the largely conjectural harms to competition as entirely plausible, when no court in four decades has found such theories stand up to scrutiny.”

“Ultimately, because of this ambiguity, the guidelines’ impact will depend on how they’re applied,” concluded Agarwal. “If the competition agencies use the guidelines to justify expensive investigations with only a theoretical foundation, consumers will suffer as some beneficial mergers may not occur. Such investigations could also bolster charges that the antitrust laws are being used for political purposes — something both parties should fear. Hopefully, the agencies and state attorneys general will demand rigorous evidence of consumer harm before proceeding with any enforcement actions.”

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We can be reached for comment at media@techfreedom.org. Read our related work including:

  • Our comments on the draft vertical merger guidelines
  • Our 2018 coalition letter to Jeff Sessions warning against using the antitrust laws to influence online speech
  • Our statement on the court decision blocking DOJ’s lawsuit to stop the AT&T/Time Warner merger
  • Our 2015 coalition letter urging Congress to bar the FCC from imposing merger conditions not specific to harms caused by a merger, or that the FCC could not impose by regulation

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