Antitrust Regulators Think About Overhauling Merger Guidelines

[WSJ_law_blog]

Some days recently it feels like we should just cave in and make this the WSJ’s Antitrust Blog, given the amount of news on that front these days. It gets to us. Some nights, Christine Varney, Neelie Kroes, and Herb Hovenkamp float through our dreams talking of the rule of reason, essential facilities and interlocking directorates (our dreams, like most of yours, LBers, typically revolve around discussions of revered federal statues, like the Sherman and Clayton Acts).

In any event, there’s more on this front out Tuesday. U.S. regulators announced today that they were considering updating 17-year-old guidelines used to determine whether proposed business mergers are anticompetitive. It’s a move that could result in both simplified and tougher standards for companies. Click here for the WSJ story; here for coverage from the BLT blog.

The review by the U.S. Justice Department and the Federal Trade Commission is expected to bring the 1992 guidelines more in line with how mergers are reviewed now at the two agencies. Critics say the complicated analysis required in the federal government’s existing guidelines no longer accurately reflects real-world practice at the agencies, which today focus more on the practical impact of a proposed merger.

“It is an appropriate time for the antitrust agencies to conduct a review of the guidelines to determine whether any revisions should be made to better protect American consumers and businesses from anticompetitive mergers,” Christine Varney, the DOJ’s chief antitrust enforcer, said in a written statement.

William Baer, an antitrust lawyer at Washington’s Arnold & Porter law firm, said that with the guideline review, regulators appeared to be headed toward putting more emphasis on the practical impact of a merger on product lines and consumer choice.

“Some of the methods were put on the book a generation ago,” said John Harkrider, of Axinn Veltrop & Harkrider, to the Law Blog. “The world has changed since then.” Harkrider suggested the biggest changes would be to the guidelines of how regulators should analyze the presumptive competitive effects in two different merger scenarios, one involving sellers of large commodities, another involving “differentiated products.”

The first workshop is slated to take place in Washington on Dec. 3. Mr. Leibowitz said the review process will take six to 10 months.