United States: FTC Holds New Hearing On Merger Retrospectives

On April 12, the Federal Trade Commission held a hearing to debate the extent to which the FTC should use retrospective reviews to strengthen merger enforcement. This was the latest in the series of hearings on Competition and Consumer Privacy in the 21st Century. The hearing included remarks from Republican FTC Chairman Joseph J. Simons, Democratic Commissioner Rebecca Kelly Slaughter, and panels with FTC economists, antitrust practitioners and academics. Panelists explored a range of options that the FTC might employ for carrying out retrospectives. All panelists, including Chairman Simons, favored, at least conceptually, some use of retrospectives. But the key takeaway is that the FTC still currently lacks the resources to implement a robust merger retrospective program. Without increased funding, the FTC likely will be able to conduct only a few merger retrospectives.

The Backdrop: Recent Divergence of Views Among Commissioners

The hearing occurred against a backdrop of recent division among commissioners on the broader question of how deals should be evaluated and whether the agency has been too lax on mergers in the past. The division among commissioners revealed itself in recent 3-2 decisions to close investigations of two vertical mergers that, even during the Obama administration, likely would have been unanimous.

Commissioner Slaughter had started the debate about whether and when to employ merger retrospectives in her written dissents earlier this year in Staples-Essendant and Fresenius-NxStage (both 3-2 votes along party lines). In Staples-Essendant, she wrote that the economic dominance of large firms and increase in vertical mergers was "pernicious" and responsible for "sapping the vitality of our nation's economy." In both dissents, she called for the FTC to commit to a regular post-merger retrospective analysis program for "close cases" when the Commission had imposed a remedy or identified "meaningful competitive concerns" but lacked the evidence to challenge the merger in court. If the analysis revealed harm to competition, she argued, the FTC should use that evidence to bring enforcement action against the consummated merger.

The three Republican commissioners voted to close both the Staples-Essendant and Fresenius-NxStage investigations, explaining that these vertical mergers likely would result in pro-competitive benefits and any competitive harms could be remedied. The approach of the majority likely would have won the day in the Obama FTC, where Commission votes more often than not were unanimous and decisions not to challenge vertical mergers were largely uncontroversial. Through their dissents, the two Democratic commissioners showed themselves to be even more aggressive enforcers than those in the prior administration, and their views portend difficulties for Chairman Simons in reaching consensus on matters going forward.

In Staples-Essendant, the Republican majority characterized Commissioner Slaughter's call for regular merger retrospectives as impractical and idealistic. The "practical reality," Chairman Simons said, "is that we do not have remotely enough resources" to review every merger that may or may not have competitive concerns. He noted further that the merit of the commissioner's proposal was subject to debate and the topic would be addressed in an upcoming hearing.

Chairman Simons' and Commissioner Slaughter's Views on Merger Retrospectives

In his opening remarks at the hearing, Chairman Simons acknowledged the usefulness of merger retrospectives. He said that appropriate retrospective analysis can play a role in safeguarding the strong bipartisan consensus that has led antitrust enforcement over the past two decades. He explained that such analysis should be used to help test and refine pre-merger economic tools and models, and even help to persuade courts to block anticompetitive mergers, as they have in the past. But he also emphasized that retrospectives pose difficult methodological issues and are resource intensive. Chairman Simons said repeatedly that, in light of the FTC's resource restraints, it is unclear what an agency retrospective program would look like.

In her remarks, Commissioner Slaughter reaffirmed her position in Staples-Essendant. She suggested that retrospectives should occur in the "normal course" and would sharpen the FTC's analytical tools. In her view, such analyses, conducted regularly, could deter merged entities from engaging in anticompetitive behavior and would allow the FTC to unwind mergers that harm competition.

Both Chairman Simons and Commissioner Slaughter raised the possibility of working with outside third parties to reduce some of the FTC's costs of conducting retrospectives. In his opening remarks, Chairman Simons said that the Commission should particularly consider "whether and how the Commission can work with outside researchers on retrospective studies." Commissioner Slaughter echoed this idea. (We note, however, that any such proposal would need to address the confidentiality of any sensitive data being shared with outside researchers who are not FTC personnel or paid by the agency.)

While it was not surprising that Chairman Simons acknowledged at the hearings the potential value of retrospectives in concept, it was notable that he did not repeat some of the pointed criticisms the Republican majority in Staples-Essendant directed at Commissioner Slaughter's retrospective proposals. Some may interpret this as a signal that he would like to achieve consensus on the Commission and is now more open to a robust retrospective program.

Not surprisingly, the other academic- and economist-heavy panels were largely supportive of merger retrospectives and proposed ways that the FTC would design and perform such studies. Some of the benefits included shedding more light on particular industries, highlighting the efficiencies and inefficiencies of FTC models, and demonstrating whether current policies are too relaxed or too stringent. Participants also highlighted some of the challenges of such studies, including, for example, identifying useful data. Whether market changes post-merger resulted from anticompetitive behavior or ordinary course behavior, and drawing general inferences when markets in each merger can be very different.

Potential Implications

Chairman Simons and Commissioner Slaughter may agree about the beneficial value of merger retrospectives, but it is unlikely post-merger reviews will become a regular exercise at the FTC anytime soon. The FTC's budget is currently unable to accommodate "normal course" retrospectives, even if limited to the largest deals, or those that were "close calls" for the FTC to decline to challenge. More likely, the FTC will conduct one or two merger retrospectives in-house sometime this year. If the FTC were to embark on a more ambitious retrospective program, we likely would see increased FTC appropriations or an announcement of a partnership with outside economists or researchers to do the work.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions