FTC to Restrict Future Acquisitions for Firms that Pursue Anticompetitive Mergers

The Federal Trade Commission announced that it is restoring its long-established practice of routinely restricting future acquisitions for merging parties that pursue anti-competitive mergers. The Prior Approval Policy Statement puts industry on notice that the FTC’s merger enforcement orders will once again require acquisitive firms to obtain prior approval from the agency before closing any future transaction affecting each relevant market for which a violation was alleged, for a minimum of ten years. In July 2021, the FTC rescinded a 1995 policy statement that for decades had fueled consolidation by preventing the agency from imposing these merger restrictions. The application of the Prior Approval Policy Statement will protect consumers and deter merging parties from pursuing anti-competitive deals. The consequences of attempting an anti-competitive deal will be more severe and the bar for consummating further anti-competitive acquisitions will be higher. The FTC will weigh a number of factors in determining the scope of a prior approval provision, including the nature of the transaction, the level of market concentration and the degree to which the transaction increases market concentration, the degree of pre-merger market power, the parties’ history of acquisitiveness, and evidence of anticompetitive market dynamics.