Vertical Mergers. For the first time, the Agencies identified when certain vertical transactions would be considered presumptively unlawful. Under the proposed guidelines, vertical transactions where the surviving entity would have above a 50% "foreclosure share." The term "foreclosure share" is defined as "the share of the related market that is controlled by the merged firm, such that it could foreclose a rival's access to the related product on competitive terms."

Potential Competition

Under the proposed guidelines, the agencies signaled that they plan to increase their scrutiny of mergers involving potential market entrants. The agencies, for the first time, state in the proposed guidelines that they plan to assess the merger of two potential market entrants in the same way as a merger between an incumbent and a potential entrant. In addition, the proposed guidelines state that mergers involving a party perceived as a potential entrant may substantially lessen competition, even absent any plans or consideration of any plans to enter.

Multisided Platforms

The Agencies provide a framework for analyzing multisided platforms that do not fall into "horizontal" or "vertical" merger categories. The proposed guidelines state that the Agencies will "seek to prohibit a merger that harms competition within a relevant market for any product or service offered on a platform to any group of participants." This may include mergers involving two platform operators that eliminate the competition between them; a platform operator's acquisition of a platform participant which can entrench the operator's dominant position; acquisitions of firms that provide services that facilitate participation on multiple platforms and can deprive rivals of platform participants; and (4) mergers involving firms that provide other important inputs to platform services that can enable the platform operator to deny rivals the benefits of those inputs.

Labor Markets

Under the proposed guidelines, agencies will consider whether a merger substantially lessens the competition for workers so that the reduction in labor market competition may lower wages or slow wage growth, worsen benefits, and working conditions. This marks a significant departure from previous merger analyses wherein the elimination of redundant positions was considered a pro-competitive merger efficiency.

Dominant Firms

In the proposed guidelines, the Agencies identify factors that they will consider when assessing whether a proposed merger would entrench a company's dominant position in a market. These include whether the merger increases barriers to entry, switching costs, customer ability to access alternative products or services from competitors, network effects, and the elimination of a potential rival.

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FTC and DOJ propose major overhaul of merger guidelines

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