Merger guidelines

U.S. competition rules

Competition law

Basic concepts

* Barriers to entry
* Competition
* Competition law theory
* History of competition law
* Herfindahl–Hirschman index
* Monopoly and oligopoly
* Coercive
* Government-granted monopoly
* Natural monopoly
* State and Legal monopoly
* Market concentration
* Market power
* Monopoly profit
* Profit margin
* Merger control
* Non-compete clause
* SSNIP test
* Regulatory agency
* Regulatory economics
* Relevant market

Anti-competitive practices

* Collusion
* Dividing territories
* Formation of cartels
* Price fixing (List)
* Bid rigging
* Tacit collusion
* Occupational licensing and closure
* Cornering the market
* Embrace, extend, and extinguish
* Exclusive dealing
* Horizontal integration
* Mergers and acquisitions
* Monopolization
* Misuse of patents and copyrights
* Predatory pricing
* Price gouging
* Product bundling and tying
* Raising rivals' costs
* Refusal to deal
* Group boycott
* Essential facilities
* Regulatory capture
* Noerr–Pennington doctrine
* Parker immunity doctrine
* Rent-seeking
* Vendor lock-in
* Vertical integration

Competition regulators

* List of competition regulators
* International Competition Network

* v
* t
* e

For EU guidelines on the assessment of horizontal mergers, see European Union merger law.

Merger guidelines in the United States are a set of internal rules promulgated by the Antitrust Division of the Department of Justice (DOJ) in conjunction with the Federal Trade Commission (FTC). These rules have been revised over the past four decades. They govern the process by which these two regulatory bodies scrutinize and/or challenge a potential merger. Grounds for challenges include increased market concentration and threat to competition within a relevant market.

The merger guidelines have sections governing both horizontal integration and vertical integration.

## History

[edit]

The first merger guidelines set forth by the DOJ were the 1968 Merger Guidelines.[1] The guidelines were developed by former U.S. Assistant Attorney General Dr. Donald Turner, an economist and lawyer with expertise in the field of industrial organization.[2]

These merger guidelines were criticized in some quarters for excess concern with issues of market structure such as barriers to entry and concentration ratios at the expense of efficiency and economies of scale.[3] They were, however, a step forward in two ways: they gave more accurate advice to corporate management as to when and how mergers would be examined and brought new economic ideas into antitrust enforcement, specifically the "structure-conduct-performance" model of industrial organization.[2]

They remained largely unchanged until 1982 when Associate Attorney General Bill Baxter, under the authority of U.S. Attorney General William French Smith, released a new set of guidelines, which made heavier use of modern concepts of microeconomic theory, including using the Herfindahl index to measure market concentration.[4] The newer guidelines took a more favorable view of economies of scale and efficiency of production as rationales for integration.[2] Moreover, they raised the level of market concentration necessary for the government to scrutinize mergers, effectively treating competition as a means to greater efficiency rather than as an independent goal.[5] This approach was controversial: some antitrust lawyers saw it as a loosening of previous restraints on corporate consolidation, and some State Attorneys General responded to Baxter's changes by tightening merger enforcement at the state level.[3]

The guidelines were revised again in 1984.[6] The only portion of the 1984 guidelines that remains in effect is Section Four, which governs the examination of market effects of vertical integration. These guidelines were replaced by the 1992 Merger Guidelines,[7] which fine-tuned previously established tools and policies, such as the SSNIP test and rules governing the acquisition of failing firms.[8] The 1992 Guidelines were revised in 1997, almost concurrently with the FTC's challenge of the Staples-Office Depot merger in federal court.

The 1997 Horizontal Merger Guidelines were replaced on August 19, 2010.[9] These guidelines introduced the concept of "upward pricing pressure" resulting from a merger between competing firms. The 2010 revisions, while deemed by some to be an improvement,[10] attracted criticism from law and economics scholars who contend that they do not update efficiencies analysis,[11] that they may not be recognized by the courts[12] and that they do not embody principles that reflect dynamic competition.[13]

## Notes

[edit]

1. ^ "1968 Merger Guidelines". www.justice.gov. 2015-06-25. Retrieved 2019-07-13.
2. ^ a b c Oliver E. Williamson, The Merger Guidelines of the U.S. Department of Justice-In Perspective. Accessed November 4, 2007.
3. ^ a b Remarks of Assistant Attorney General Charles A. James.
4. ^ Time magazine, "Guidelines for the Merger Thicket", June 28, 1982. Accessed September 12, 2007.
5. ^ William J. Kolasky and Andrew R. Dick, The Merger Guidelines and the Integration of Efficiencies into Antitrust Review of Horizontal Mergers, 10 June 2002. Accessed September 12, 2007.
6. ^ 1984 Merger Guidelines
7. ^ 1992 Merger Guidelines
8. ^ Joshua R. Wueller, Mergers of Majors: Applying the Failing Firm Doctrine in the Recorded Music Industry, 7 Brook. J. Corp. Fin. & Com. L. 589, 591–92 (2013) (describing section 11 of the 2010 Guidelines (and section 5.1 of the earlier 1997 Guidelines), which governs the failing firm doctrine for the FTC and DOJ).
9. ^ 2010 Horizontal Merger Guidelines
10. ^ Judd E. Stone & Joshua D. Wright, The Sound of One Hand Clapping: The 2010 Merger Guidelines and the Challenge of Judicial Adoption, 39 REV. IND. ORGAN. 145 (2011).
11. ^ Id.
12. ^ Leah Brannon & Kathleen Bradish, The Revised Horizontal Merger Guidelines: Can the Courts Be Persuaded?, THE ANTITRUST SOURCE, October 2010, at 4.
13. ^ See J. Gregory Sidak & David J. Teece, Rewriting the Horizontal Merger Guidelines in the Name of Dynamic Competition, 16 GEO. MASON L. REV. 885 (2009), https://www.criterioneconomics.com/docs/rewriting-horizontal-merger.pdf.

## See also

[edit]

* United States antitrust law
* Second request (law)

## External links

[edit]

* Merger guidelines documents:
* 1968 Merger Guidelines
* 1984 Merger Guidelines
* 1984 Non-horizontal Merger Guidelines
* 1992 Merger Guidelines
* 1992 Horizontal Merger Guidelines, with April 8, 1997, Revisions to Section 4 on Efficiencies
* 1997 Merger Guidelines
* 2010 Horizontal Merger Guidelines
* Official DOJ commentary on the horizontal merger guidelines
* 20th anniversary of the 1982 merger guidelines
* FTC International antitrust coordinator Debra Valentine

* v
* t
* e

United States antitrust law

* History
* Interstate Commerce Commission (1887–1996)
* Bureau of Corporations (1903–1915)
* Pujo Committee (1912–1913)
* Federal Trade Commission (1914–)
* U.S. Justice Department Antitrust Division (1919–)
* U.S. Senate Judiciary Antitrust Subcommittee
* U.S. House Judiciary Antitrust Subcommittee

Statutes and
regulations|

* Interstate Commerce Act of 1887
* Sherman Antitrust Act (1890)
* Elkins Act (1903)
* Expediting Act (1903)
* Publicity In Taking Evidence Act (1913)
* Clayton Antitrust Act of 1914
* Federal Trade Commission Act of 1914
* Webb–Pomerene Act (1918)
* Willis Graham Act (1921)
* Capper–Volstead Act (1922)
* Robinson–Patman Act (1936)
* Wheeler–Lea Act (1938)
* McCarran–Ferguson Act (1945)
* Celler–Kefauver Act (1950)
* Sports Broadcasting Act of 1961
* Newspaper Preservation Act of 1970
* Tunney Act (1974)
* Hart–Scott–Rodino Antitrust Improvements Act (1976)
* National Cooperative Research and Production Act (1993)
* Executive Order 14036 (2021)

Supreme Court
case law|

| Sherman Antitrust Act
Section 1 case law|

* United States v. American Tobacco Co. (1911)
* United States v. Socony-Vacuum Oil Co. (1940)
* International Salt Co. v. United States (1947)
* United States v. Line Material Co. (1948)
* Kiefer-Stewart Co. v. Seagram & Sons, Inc. (1951)
* United States v. New Wrinkle, Inc. (1952)
* United States v. Loew's Inc. (1962)
* United States v. Wise (1962)
* Silver v. New York Stock Exchange (1963)
* United States v. Singer Mfg. Co. (1963)
* Albrecht v. Herald Co. (1968)
* United States v. Glaxo Group Ltd. (1973)
* Goldfarb v. Virginia State Bar (1975)
* Continental Television, Inc. v. GTE Sylvania, Inc. (1977)
* Illinois Brick Co. v. Illinois (1977)
* Arizona v. Maricopa County Medical Society (1982)
* Rice v. Norman Williams Co. (1982)
* Copperweld Corp. v. Independence Tube Corp. (1984)
* Jefferson Parish Hospital District No. 2 v. Hyde (1984)
* NCAA v. Board of Regents of the University of Oklahoma (1984)
* Matsushita Electric Industrial Co. v. Zenith Radio Corp. (1986)
* State Oil Co. v. Khan (1997)
* Texaco Inc. v. Dagher (2006)
* Bell Atlantic Corp. v. Twombly (2007)
* Leegin Creative Leather Products, Inc. v. PSKS, Inc. (2007)
* American Needle, Inc. v. National Football League (2010)
* Ohio v. American Express Co. (2018)
* National Collegiate Athletic Association v. Alston (2021)

|

Sherman Antitrust Act
Section 2 case law|

* Standard Oil Co. of New Jersey v. United States (1911)
* Lorain Journal Co. v. United States (1951)
* Walker Process Equipment, Inc. v. Food Machinery & Chemical Corp. (1965)
* Otter Tail Power Co. v. United States (1973)
* Aspen Skiing Co. v. Aspen Highlands Skiing Corp. (1985)
* Spectrum Sports, Inc. v. McQuillan (1993)
* Verizon Communications Inc. v. Law Offices of Curtis V. Trinko, LLP (2004)
* Weyerhaeuser Co. v. Ross-Simmons Hardwood Lumber Co. (2007)
* Pacific Bell Telephone Co. v. linkLine Communications, Inc.  (2009)

Other Sherman
Antitrust Act cases|

* United States v. E. C. Knight Co. (1895)
* United States v. Trans-Missouri Freight Association (1897)
* Addyston Pipe & Steel Co. v. United States (1899)
* Northern Securities Co. v. United States (1904)
* Swift & Co. v. United States (1905)
* Loewe v. Lawlor (1908)
* Dr. Miles Medical Co. v. John D. Park & Sons Co. (1911)
* United States v. Terminal Railroad Association (1912)
* Chicago Board of Trade v. United States (1918)
* United States v. Colgate & Co. (1919)
* Federal Baseball Club v. National League (1922)
* United States v. General Electric Co. (1926)
* Interstate Circuit, Inc. v. United States (1939)
* Ethyl Gasoline Corp. v. United States (1940)
* Fashion Originators' Guild of America v. FTC (1941)
* United States v. Masonite Corp. (1942)
* United States v. Univis Lens Co. (1942)
* Parker v. Brown (1943)
* United States v. South-Eastern Underwriters Ass'n (1944)
* Associated Press v. United States (1945)
* Hartford-Empire Co. v. United States (1945)
* Bigelow v. RKO Radio Pictures, Inc. (1946)
* United States v. Paramount Pictures, Inc. (1948)
* United States v. United States Gypsum Co. (1948–1950)
* Besser Manufacturing Co. v. United States (1951)
* Times-Picayune Publishing Co. v. United States (1953)
* Toolson v. New York Yankees, Inc. (1953)
* United States v. International Boxing Club of New York, Inc. (1955)
* Radovich v. National Football League (1957)
* Klor's, Inc. v. Broadway-Hale Stores, Inc. (1959)
* United States v. Parke, Davis & Co. (1960)
* Haywood v. National Basketball Association (1971)
* Zenith Radio Corp. v. Hazeltine Research, Inc. (1971)
* Flood v. Kuhn (1972)
* Broadcast Music, Inc. v. CBS Inc. (1979)
* California Retail Liquor Dealers Ass'n v. Midcal Aluminum, Inc. (1980)
* American Society of Mechanical Engineers, Inc. v. Hydrolevel Corp. (1982)
* Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc. (1985)
* Eastman Kodak Co. v. Image Technical Services, Inc. (1992)
* Hartford Fire Insurance Co. v. California (1993)
* Illinois Tool Works Inc. v. Independent Ink, Inc. (2006)
* North Carolina State Board of Dental Examiners v. FTC (2015)

Interstate Commerce Act
case law|

* United States v. Trans-Missouri Freight Association (1897)
* United States v. ICC (1970)

Clayton Antitrust Act
case law|

* Duplex Printing Press Co. v. Deering (1921)
* Fashion Originators' Guild of America v. FTC (1941)
* Mercoid cases (1944)
* Hartford-Empire Co. v. United States (1945)
* Bigelow v. RKO Radio Pictures, Inc. (1946)
* United States v. National City Lines Inc. (1948)
* Standard Oil Co. v. United States (1949)
* Tampa Electric Co. v. Nashville Coal Co.  (1961)
* Silver v. New York Stock Exchange (1963)
* United States v. Philadelphia National Bank (1963)
* United States v. Continental Can Co. (1964)
* FTC v. Consolidated Foods Corp. (1965)
* Walker Process Equipment, Inc. v. Food Machinery & Chemical Corp. (1965)
* FTC v. Dean Foods Co. (1966)
* Zenith Radio Corp. v. Hazeltine Research, Inc. (1971)
* Hawaii v. Standard Oil Co. of California (1972)
* Illinois Brick Co. v. Illinois (1977)
* Pfizer Inc. v. Government of India (1978)
* Brooke Group Ltd. v. Brown & Williamson Tobacco Corp. (1993)
* Apple Inc. v. Pepper (2019)

FTC Act case law|

* Fashion Originators' Guild of America v. FTC (1941)
* FTC v. Motion Picture Advertising Service Co. (1953)
* FTC v. Sperry & Hutchinson Trading Stamp Co. (1972)
* FTC v. Actavis, Inc. (2013)

Robinson–Patman Act
case law|

* Matsushita Electric Industrial Co. v. Zenith Radio Corp. (1986)
* Brooke Group Ltd. v. Brown & Williamson Tobacco Corp. (1993)

Other cases|

* Continental Paper Bag Co. v. Eastern Paper Bag Co. (1908)
* Black & White Taxicab & Transfer Co. v. Brown & Yellow Taxicab & Transfer Co. (1928)
* Watson v. Buck (1941)
* National Broadcasting Co. v. United States (1943)
* Dawson Chemical Co. v. Rohm & Haas Co. (1980)
* District of Columbia Court of Appeals v. Feldman (1983)
* Credit Suisse Securities (USA) LLC v. Billing (2007)
* Comcast Corp. v. Behrend (2013)
* Animal Science Products v. Hebei Welcome Pharmaceuticals (2018)

Other federal
case law|

* United States v. Motion Picture Patents Co. (1915)
* United States v. Consolidated Music Corporation (1922)
* United States v. Vehicular Parking Ltd. (1944)
* United States v. Alcoa (1945)
* Gamco, Inc. v. Providence Fruit & Produce Building, Inc. (1952)
* United States v. Morgan (1953)
* United States v. Krasnov (1956)
* United States v. Huck Mfg. Co. (1965)
* Robertson v. National Basketball Ass'n (1977)
* SmithKline Corp. v. Eli Lilly & Co. (1978)
* United States v. Westinghouse Electric Co. (1981)
* United States v. AT&T (1982)
* Mid-South Grizzlies v. National Football League (1983)
* United States v. Syufy Enterprises (1990)
* Wilk v. American Medical Association (1990)
* A.D. Bedell Wholesale Co., Inc. v. Philip Morris Inc. (2001)
* United States v. Microsoft Corp. (2001)
* Fraser v. Major League Soccer (2002)
* LePage's, Inc. v. 3M (2003)
* Advanced Micro Devices, Inc. v. Intel Corp. (2005)
* United States v. Dentsply Int'l, Inc. (2005)
* Tritent International Corp. v. Kentucky (2006)
* Wallace v. International Business Machines Corp. (2006)
* De Beers antitrust litigation (2008)
* Redbox Automated Retail LLC v. Universal City Studios LLLP (2009)
* Princo Corp. v. ITC (2010)
* United States v. Adobe Systems Inc., et al. (2011)
* United States v. Apple Inc. (2013)
* O'Bannon v. NCAA (2015)
* United States v. AT&T (2015)
* FTC v. Qualcomm (2020)
* New York v. Deutsche Telekom (2020)
* Epic Games v. Apple (2021)
* Burnett v. National Association of Realtors (2023)
* Epic Games v. Google (2023)
* FTC v. Microsoft (2023)
* United States v. Google LLC (2024)
* United States v. Google LLC (2025)

Ongoing
litigation ‡|

* FTC v. Meta (2020)
* FTC v. Amazon (2023)
* United States v. Apple Inc. (2024)
* United States v. Live Nation Entertainment (2024)

Related topics|

* Block booking
* Breakup of the Bell System
* Bulk-sale restriction
* Bundling
* Civil investigative demand
* Consent decree
* Consumer welfare standard
* Dividing territories
* Essential facilities doctrine
* Exclusive dealing
* Hub-and-spoke conspiracy
* Kingsbury Commitment
* Merger guidelines
* Modification of Final Judgment
* New Brandeis movement
* Noerr–Pennington doctrine
* Osteopathic Physicians & Surgeons v. California Medical Ass'n (1964)
* Parker immunity doctrine
* Patent misuse
* Post-sale restraint
* Raising rivals' costs
* Relevant market
* Report on Chain Broadcasting
* Reverse payment patent settlement
* Rule of reason
* Second request
* Successors of Standard Oil
* Unfairness doctrine
* Unilateral policy

‡ date of filing
*[v]: View this template
*[t]: Discuss this template
*[e]: Edit this template