WASHINGTON (Reuters) - Antitrust enforcers released proposed new guidelines describing how they approach mergers between rivals, with a range of experts describing the revisions as providing greater clarity and giving officials more discretion.
The stated goal of the 34-page guidelines -- which can be found at www.ftc.gov -- is to update the merger guidelines to ensure they reflect the current review process.
The revision was done jointly by the Justice Department and Federal Trade Commission, which divide the work of antitrust enforcement.
“Eighteen years have passed since the Horizontal Merger Guidelines were revised. During that time the agencies’ approach has evolved significantly, and the guidelines should reflect that,” said FTC Chairman Jon Leibowitz in a statement.
Public comments will be accepted until May 20.
David Balto, a former policy director at the FTC’s Bureau of Competition, said business will be pleased with the guidelines since they will give them a better window into how the agencies really look at mergers.
“Business gets greater clarity,” said Balto. “The old guidelines were a poor reflection on what the agencies’ real practices are.”
Evan Stewart of the law firm Zuckerman Spaeder LLP said there were no real surprises.
“These strike me as generally noncontroversial. I think what they’re trying to do is give companies and practitioners guide points,” he said.
Bruce McDonald, a former deputy assistant attorney general now with Jones Day law firm, said the revision takes a more skeptical view of merging companies’ arguments that buying a rival would create efficiencies or that an increase in market power could be held in check by new firms entering the space.
“The new guidelines seem to provide more tools and more flexibility to the agencies,” added McDonald.
Paul Denis of Dechert LLP, and an author of the previous guidelines, said that he saw in the guidelines an “attempt to move away from a structured process to something that is far more discretionary on the part of the government.”
Previously, when regulators assessed a merger, they looked at the market the companies operated in, they looked at how much power the companies had in that market and then tried to determine if the merger would lead to higher prices or worse service or negatively affect consumers in other ways.
“What I see is a conscious effort not to be pinned down on anything,” said Denis, who represented Whole Foods Market Inc in its fight with the FTC over its purchase of Wild Oats.
Reporting by Diane Bartz; Editing by Tim Dobbyn