WASHINGTON (Reuters) – The U.S. Justice Department and Federal Trade Commission, which investigate proposed mergers to ensure they are legal, issued guidelines on Tuesday codifying current practice in their probes of so-called vertical mergers, which combine a company and a supplier.
Of the thousands of deals reported to the government each year, only a handful are stopped and a smaller number of vertical deals create antitrust concern. When it does happen, it is often because concern that that supplier would stop supplying rivals.
The new guidelines “explain our investigative practices as we apply them today and have applied them in recent years,” said Makan Delrahim, chief of the Justice Department’s antitrust division.
A rare example of a vertical deal that the government sought to stop was telecommunications company AT&T’s
Although two Democrats on the FTC dissented on the guidelines, it is unlikely that enforcement around vertical mergers will change quickly if Democratic candidate Joe Biden is elected in November since challenges go before judges who are bound by statutes, said Rani Habash, an antitrust expert with the law firm Dechert LLP.
“The deals on the margin may go a different way,” said Habash.
(Reporting by Diane Bartz; Editing by David Gregorio)
