Biden’s Crackdown on Illegal Mergers Cemented With New Rules

Justice Department, FTC Publish Joint Antitrust Guidelines
President Joe Biden
President Joe Biden. (Al Drago/Bloomberg News)

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The Biden administration’s antitrust agencies finalized a sweeping overhaul of rules the government uses to determine whether deals violate competition law in a bid to extend a crackdown on illegal mergers and acquisitions.

The 11 new guidelines published Dec. 18 by the Justice Department and Federal Trade Commission are designed to thwart companies seeking to dominate their industries by buying up rivals. They largely mirror a proposal issued in July, though the final version didn’t include a proposed guideline related to so-called vertical deals — those between companies that aren’t direct competitors but operate in the same supply chain.

The final version also eliminated another proposed guideline on how mergers can lead to trends in concentration. Instead, content from both of the deleted rules was incorporated into other sections to respond to public feedback. The changes also sought to address comments on the use of economics, citations to specific cases and when the agencies will assume a deal is anticompetitive based on size.

“The finalized merger guidelines are a game changer for antitrust enforcement,” said Erik Peinert, research manager and editor at antitrust advocacy group American Economic Liberties Project. “The new guidelines provide a road map to bring first principles of the antitrust laws into the 21st century.”

The new rules come on the heels of two major wins by the agencies. Earlier Dec. 18, Adobe Inc. said it was abandoning plans to acquire Figma Inc. after clashing with regulators on both sides of the Atlantic. This weekend, Illumina Inc. said it would sell off cancer startup Grail Inc., ending a transatlantic antitrust fight and marking the FTC’s first successful litigation to block a vertical deal.

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Under President Joe Biden, the U.S. has doubled down on efforts to block more mergers after decades of a light-touch approach by government. Assistant Attorney General for Antitrust Jonathan Kanter and FTC Chair Lina Khan have argued previous administrations were too permissive, leading to a rise in corporate concentration that has limited choices for consumers and contributed to higher prices.

“For too long, unchecked consolidation has meant big corporations getting bigger, giving them the power to raise prices for Americans and provide consumers with fewer options,” Biden’s national economic adviser, Lael Brainard, said in a statement. The new merger guidelines are “an important step to lower costs for consumers, ensure a level playing field for small businesses, and ensure antitrust enforcement is fit for purpose in today’s economy.”