# Merger guidelines
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{{Short description|U.S. competition rules}}
{{Competition law}}
{{For|EU guidelines on the assessment of horizontal mergers|European Union merger law}}
'''Merger guidelines''' in the United States are a set of internal rules promulgated by the [Antitrust Division](/source/United_States_Department_of_Justice_Antitrust_Division) of the [Department of Justice](/source/United_States_Department_of_Justice) (DOJ) in conjunction with the [Federal Trade Commission](/source/Federal_Trade_Commission) (FTC). These rules have been revised over the past four decades. They govern the process by which these two regulatory bodies scrutinize and/or challenge a potential [merger](/source/Mergers_and_acquisitions). Grounds for challenges include increased [market concentration](/source/market_concentration) and threat to [competition](/source/competition) within a [relevant market](/source/relevant_market).
The merger guidelines have sections governing both [horizontal integration](/source/horizontal_integration) and [vertical integration](/source/vertical_integration).
==History ==
The first merger guidelines set forth by the DOJ were the 1968 Merger Guidelines.[{{Cite web|url=https://www.justice.gov/archives/atr/1968-merger-guidelines|title=1968 Merger Guidelines|date=2015-06-25|website=www.justice.gov|language=en|access-date=2019-07-13}}] The guidelines were developed by former [U.S. Assistant Attorney General](/source/United_States_Assistant_Attorney_General) Dr. [Donald Turner](/source/Donald_F._Turner), an [economist](/source/economist) and lawyer with expertise in the field of [industrial organization](/source/industrial_organization).[[http://www.usdoj.gov/atr/hmerger/11257.htm Oliver E. Williamson, The Merger Guidelines of the U.S. Department of Justice-In Perspective]. Accessed November 4, 2007.]
These merger guidelines were criticized in some quarters for excess concern with issues of market structure such as [barriers to entry](/source/barriers_to_entry) and [concentration ratio](/source/concentration_ratio)s at the expense of efficiency and [economies of scale](/source/economies_of_scale).[[http://www.usdoj.gov/atr/hmerger/11253.htm Remarks of Assistant Attorney General Charles A. James].] They were, however, a step forward in two ways: they gave more accurate advice to corporate management as to when and how mergers would be examined and brought new economic ideas into antitrust enforcement, specifically the ["structure-conduct-performance" model](/source/Structure-conduct-performance_paradigm) of [industrial organization](/source/industrial_organization).[[https://web.archive.org/web/20121021080907/http://www.time.com/time/magazine/article/0,9171,949508-2,00.html Time magazine, "Guidelines for the Merger Thicket", June 28, 1982]. Accessed September 12, 2007.] The newer guidelines took a more favorable view of [economies of scale](/source/economies_of_scale) and efficiency of production as rationales for integration.[[http://www.usdoj.gov/atr/hmerger/11254.htm William J. Kolasky and Andrew R. Dick, The Merger Guidelines and the Integration of Efficiencies into Antitrust Review of Horizontal Mergers, 10 June 2002]. Accessed September 12, 2007.] This approach was controversial: some antitrust lawyers saw it as a loosening of previous restraints on corporate consolidation, and some [State Attorneys General](/source/State_Attorney_General) responded to Baxter's changes by tightening merger enforcement at the state level.[[http://www.usdoj.gov/atr/hmerger/11249.htm 1984 Merger Guidelines]] The only portion of the 1984 guidelines that remains in effect is [http://www.usdoj.gov/atr/public/guidelines/2614.htm Section Four], which governs the examination of market effects of [vertical integration](/source/vertical_integration). These guidelines were replaced by the 1992 Merger Guidelines,[[http://www.usdoj.gov/atr/hmerger/11250.htm 1992 Merger Guidelines]] which fine-tuned previously established tools and policies, such as the [SSNIP test](/source/SSNIP_test) and rules governing the acquisition of failing firms.[Joshua R. Wueller, [https://ssrn.com/abstract=2293412 ''Mergers of Majors: Applying the Failing Firm Doctrine in the Recorded Music Industry''], 7 Brook. J. Corp. Fin. & Com. L. 589, 591–92 (2013) (describing section 11 of the 2010 Guidelines (and section 5.1 of the earlier 1997 Guidelines), which governs the failing firm doctrine for the FTC and DOJ).] The 1992 Guidelines were revised in 1997, almost concurrently with the FTC's challenge of the [Staples](/source/Staples_Inc.)-[Office Depot](/source/Office_Depot) merger in federal court.
The 1997 Horizontal Merger Guidelines were replaced on August 19, 2010.[[http://ftc.gov/os/2010/08/100819hmg.pdf 2010 Horizontal Merger Guidelines]] These guidelines introduced the concept of "upward pricing pressure" resulting from a merger between competing firms. The 2010 revisions, while deemed by some to be an improvement,[Judd E. Stone & Joshua D. Wright, ''The Sound of One Hand Clapping: The 2010 Merger Guidelines and the Challenge of Judicial Adoption'', 39 REV. IND. ORGAN. 145 (2011).] attracted criticism from [law and economics](/source/law_and_economics) scholars who contend that they do not update efficiencies analysis,[''Id.''] that they may not be recognized by the courts[Leah Brannon & Kathleen Bradish, ''The Revised Horizontal Merger Guidelines: Can the Courts Be Persuaded?'', THE ANTITRUST SOURCE, October 2010, at 4.] and that they do not embody principles that reflect dynamic competition.[''See'' J. Gregory Sidak & David J. Teece, ''Rewriting the Horizontal Merger Guidelines in the Name of Dynamic Competition'', 16 GEO. MASON L. REV. 885 (2009), https://www.criterioneconomics.com/docs/rewriting-horizontal-merger.pdf.]
==Notes==
{{Reflist}}
==See also==
*[United States antitrust law](/source/United_States_antitrust_law)
*[Second request (law)](/source/Second_request_(law))
==External links==
*Merger guidelines documents:
**[http://www.usdoj.gov/atr/hmerger/11247.htm ''1968 Merger Guidelines'']
**[http://www.usdoj.gov/atr/hmerger/11249.htm ''1984 Merger Guidelines'']
**[http://www.usdoj.gov/atr/public/guidelines/2614.htm 1984 ''Non-horizontal Merger Guidelines'']
**[http://www.usdoj.gov/atr/hmerger/11250.htm ''1992 Merger Guidelines'']
**[http://www.ftc.gov/bc/docs/horizmer.htm ''1992 Horizontal Merger Guidelines, with April 8, 1997, Revisions to Section 4 on Efficiencies'']
**[http://www.usdoj.gov/atr/hmerger/11251.htm ''1997 Merger Guidelines'']
**[http://ftc.gov/os/2010/08/100819hmg.pdf ''2010 Horizontal Merger Guidelines'']
*[http://www.usdoj.gov/atr/public/guidelines/215247.htm Official DOJ commentary on the horizontal merger guidelines]
*[https://web.archive.org/web/20070807065051/http://www.usdoj.gov/atr/hmerger.htm 20th anniversary of the 1982 merger guidelines]
*[https://web.archive.org/web/20070608100536/http://www.ftc.gov/speeches/other/dvperumerg.shtm FTC International antitrust coordinator Debra Valentine]
{{United States antitrust law|state=collapsed}}
Category:Mergers and acquisitions
Category:United States antitrust law
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Adapted from the Wikipedia article [Merger guidelines](https://en.wikipedia.org/wiki/Merger_guidelines) by Wikipedia contributors ([contributor history](https://en.wikipedia.org/wiki/Merger_guidelines?action=history)). Available under [Creative Commons Attribution-ShareAlike 4.0 International](https://creativecommons.org/licenses/by-sa/4.0/). Changes may have been made.