Varney, Leibowitz Defend Changes to Merger Guidelines
By Aruna Viswanatha | April 23, 2022 2:35 pm

Assistant Attorney General Christine Varney and Federal Trade Commission Chairman Jon Leibowitz, rebutted criticism Friday morning that a proposed set of changes to the guidelines the antitrust agencies use in assessing mergers would make it easier for them to challenge mergers in court.

The goal of the revisions, Varney said, was to align on paper what the agencies do in practice. “Our effort here is to be transparent,” because people in Los Angeles, and Kansas are “entitled to know what we do on a daily basis,” she said.

Assistant Attorney General Christine Varney. Photo by Ryan J. Reilly/Main Justice.

The panel discussion, with antitrust enforcers from Canada and Europe, was the closing event of a three-day American Bar Association-sponsored trade conference in Washington. The new guidelines, released on Tuesday, describe  how the DOJ and the FTC will decide whether a merger between rivals is anti-competitive. The revisions update a set of  standards that has been largely untouched since 1992.

The older guidelines delineate what has been read as a step-by-step process, beginning with defining the market in which the merging companies operate. In the past decade, both agencies have lost merger challenges in court, hamstrung in part by their own guidelines.

The revisions remove some of the emphasis on market definition, and highlight other economic tests that can also show that a merger might raise antitrust concerns. That shift has caused some antitrust lawyers to worry what impact the new guidelines might have in court.

On the panel, Varney said the revisions were more descriptive than prescriptive, and simply reflected changes in how the agencies operate. Anyone who has shepherded a merger through antitrust clearance in the past five years will recognize the process outlined in the revisions, she said.

The shift in emphasis away from defining a market is also useful to lawyers seeking approval on deals in concentrated markets, she said. “In a three-to-two merger, you do everything you can,” she said, “and use all the data you can,”  to try to prove a deal is not anti-competitive.

“General counsel have said, ‘why do you need this data if it’s not in the guidelines?’”

The FTC’s Leibowitz also pointed to several recent FTC-reviewed deals, including a hospital merger in Illinois, in which there was “overwhelming” evidence the merger was harmful, even though a step-by-step reading of guidelines didn’t necessarily lead to the same conclusion.

The third American panelist, Jim Donahue, who works in the Pennsylvania Attorney General’s office and heads the multi-state antitrust task force, reminded the audience that the hardest part of building a case is still getting customers who would be harmed by the merger to talk to the authorities.

Donahue also told the audience to watch for state activity on conduct that directly impacts either consumers or state and local governments. A merger between companies that sell products directly to consumers or to local governments, for example, will get a close look, he said.  He also said to expect more aggressive enforcement on the health care and health insurance fronts.


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