Merger Enforcement Is On The Rise
2020 was the FTC’s busiest merger enforcement year in two decades, reflecting the agency’s ability to challenge potentially anticompetitive deals. The FTC “ultimately saw twenty-eight merger enforcement actions this fiscal year: seven complaints voted out by the Commission, ten settlements accepted for public comment, and eleven transactions abandoned or restructured. This is the highest number since FY2001. And even these figures do not tell the whole story—for example, they omit matters abandoned or restructured before issuance of a second request or compulsory process,” highlights Ian R. Conner, Director of the FTC’s Bureau of Competition.
The FTC’s 2020 merger activity targeted a range of companies and sectors, including:
— Pharmaceutical: Bristol-Myers Squibb/Celgene and AbbVie/Allergan
— Biotech: Illumina/Pacific Biosciences of California
— Technology: Axon/Safariland
— Medical Devices: Össur Hf./College Park Industries
— Energy: Peabody Energy/Arch Coal
— Food: Post Holdings/Treehouse Foods
— Consumer Goods: Altria/JUUL Labs
— Wellness: Edgewell Personal Care/Harry’s
— Hospitals: Thomas Jefferson University/Albert Einstein Healthcare Network
The DOJ entered into more than ten merger settlements involving a wide range of industries in 2020, such as:
— Healthcare: Harvard Pilgrim Health Care/Health Plan Holdings
— Telecommunications: Liberty Latin America/AT&T
— Defense: CPI/GD SATCOM
— Local Service: Waste Management/Advanced Disposal Services
The likelihood of a merger challenge by the FTC or DOJ has “more than doubled” since 1979. find Georgetown University professors John W. Mayo and Jeffrey T. Macher. “[C]ontrary to the popular narrative, the Agencies have become more likely to challenge proposed mergers over 1979-2017. Controlling for the number of merger proposals submitted under HSR, we find that the likelihood of a merger challenge has more than doubled over this period.”
DOJ and FTC have been winning cases to enforce against anticompetitive mergers and conduct:
— “[O]f the 19 mergers cases that the DOJ and FTC litigated to a final decision in federal court in the 10 years after the 2010 [Horizontal Merger] Guidelines were issued, they won 15: a 79% win rate,” write economists Carl Shapiro & Howard Shelanski.
— The FTC has won six out seven antitrust cases before the Supreme Court in the last 30 years and had a 100% success rate on appeal from 2007 to 2016 for antitrust matters that went through Part 3 liability determinations, finds former FTC Commissioner Maureen K. Ohlhausen.
— The FTC had an overall win rate of 76% in unilateral theory merger cases and an overall win rate of 69% in collusion theory merger cases, notes the FTC economist Malcolm B. Coate.
— The DOJ succeeded in 96.8% of civil antitrust cases it brought from 2004 to 2013, find former Chief Judge of the U.S. Court of Appeals for the DC Circuit Douglas H. Ginsburg and former Chief of Staff at the DOJ Antitrust Division Taylor Owings.