The Federal Trade Commission has issued a Commentary on Vertical Merger Enforcement.
In June 2020, the FTC and the Department of Justice issued Vertical Merger Guidelines describing the principal analytical techniques, practices, and enforcement policies that the agencies use in evaluating whether vertical mergers violate the antitrust laws. The FTC’s commentary provides greater transparency to the public regarding its analysis of vertical mergers.
Many comments received from the FTC’s Hearings on Competition and Consumer Protection in the 21st Century called for additional and updated guidance on analysis of vertical mergers, as did past reports from the American Bar Association’s Antitrust Section and the Antitrust Modernization Commission.
The commentary demonstrates the breadth of the Commission’s investigations and the theories that the FTC applies to analyze vertical transactions.
Case examples cited in the commentary involve unilateral anticompetitive effects from foreclosure and raising rivals’ costs and from access to competitively sensitive information; other case examples involve concerns about coordinated effects that may arise from vertical mergers. The commentary also discusses procompetitive effects that are often associated with vertical mergers. Finally, the commentary considers how vertical mergers may raise barriers to entry for future competitors, which may find that, to successfully compete against the merged firm, they need to compete in more than one market in which the merged firm competes.
The Commission vote to issue the Commentary on Vertical Merger Enforcement was 3-2. Commissioners Noah Joshua Phillips and Christine S. Wilson issued a concurring statement. Commissioners Rohit Chopra and Rebecca Kelly Slaughter voted no and issued a dissenting statement.