News

US unveils proposed new Horizontal Merger Guidelines

On 20th April 2010 the FTC and DOJ published proposed revisions to the US Horizontal Merger Guidelines for public consultation. The publication comes a year after the appointment of new senior staff to both agencies, including Professor Carl Shapiro at the DOJ and Professor Joseph Farrel at the FTC, both formerly Charles River Associates' Senior Consultants. The new guidelines have emerged at the end of a first stage consultation process in which CRA has been fully involved - participating in workshops and making formal submissions to the agencies.

Key elements of the proposed new Guidelines include an increase in the HHI thresholds used as a screening device - but also a recognition that market concentration measures may play a relatively small role in the subsequent competition analysis, particularly in unilateral effects cases where the role of diversion ratios and pre-merger margins in estimating the likely upward pricing pressure arising from the merger has been emphasised. The new guidelines also clarify the approach that the US agencies will take in assessing (a) the role of potential entrants in deterring post-merger price rises, (b) the potential for efficiencies to counteract anticompetitive effects, (c) the role of powerful buyers, (d) monopsony power, and (e) the acquisition of partial shareholdings.

For more information, including a summary of the key changes, copies of CRA's submissions to the consultation process, and articles on the potential implications of the new Horizontal Merger Guidelines both in the US and in Europe, click here.

< Back to news archive

Print this page