The Mergers & Acquisitions Review: United States Antitrust Overview

i Introduction

Before reviewing key developments in the antitrust enforcement of M&A in the United States over the past year, it is helpful to begin with some brief background on US antitrust law and process.

Section 7 of the Clayton Act, the primary standard for the competitive review of mergers, acquisitions, joint ventures and other transactions in the US, is deceptively simple.2 It prohibits M&A where the effect 'may be substantially to lessen competition, or tend to create a monopoly'.3 The more-than-80 years since the Clayton Act was established, however, have given rise to a litany of case law interpreting this very broad standard. While most of those cases remain nominally good law, many decisions arguably are inconsistent with the continually evolving economic and commercial environment. Indeed, there are many newer industries for which there is little applicable case law: only imperfect analogies that can be drawn from more mature industries.

To help address these issues, the Federal Trade Commission (FTC or the Commission) and the Department of Justice (DOJ) – the two agencies that share responsibility for competition enforcement in the US – have issued horizontal and vertical merger guidelines to help practitioners better predict the potential risk that a transaction may be challenged.4 Here, too, however, there are limitations: the horizontal merger guidelines are a decade old and provide only general guidelines pursuant to which the agencies will review a transaction. Further, although the two agencies updated the vertical merger guidelines in 2020, the FTC withdrew its approval of those guidelines in 2021 and has stated that it intends to analyse mergers under its statutory mandate.5 As a result, many US transactional lawyers take deep, expensive dives into case law and guidelines, only to make inconclusive predictions regarding the likelihood of government opposition to a proposed transaction.

For this reason, it is often a wiser course of action to begin by examining how the DOJ and FTC have treated similar transactions under the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act),6 rather than case law or guidelines. The HSR Act provides the FTC and DOJ an opportunity to review transactions before the parties close the transaction and the proverbial 'eggs are scrambled'. While the HSR Act introduced some delay owing to one or more waiting periods, the result – along with the FTC's and DOJ's enforcement – actually has created tremendous transparency and much higher levels of certainty.

The FTC and DOJ annually publish detailed statistics regarding the HSR clearance process.7 Virtually without exception in each year since the passage of the HSR Act, this quantitative analysis demonstrates that the HSR process is fast and almost always results in positive outcomes for parties. As discussed below, this year is no different.

As such, while antitrust litigation is no doubt time-consuming and very expensive, it is very rarely necessary. Having said that, there are various ways in which parties can help ensure a positive outcome from the HSR process.

i Numbers trump case law

Very generally, under the HSR Act, a transaction that exceeds certain value and party-size thresholds requires that each party make an HSR filing and then observe a 30-day waiting period before consummating the transaction.8 This initial waiting period can be shortened if the parties request and the agencies grant early termination of the waiting period, but note that, as of the time of writing, the agencies have issued a suspension on early termination grants.9 On the other hand, the waiting period may be lengthened if one of the agencies issues a Request for Additional Information and Documentary Material, or Second Request, which requires an extensive production of documents, data and interrogatory responses; depositions of individual representatives of the parties; and interviews and document requests issued to relevant third parties such as customers, suppliers and competitors. A Second Request typically will add months to the HSR clearance process.

Once a Second Request is issued and the parties have complied, there are three potential outcomes: the reviewing agency can clear the transaction; the parties and the agency can enter into a settlement (consent decree or order), which typically requires the divestiture of one party's businesses to an approved buyer as a condition of allowing the broader transaction to be consummated; or the agency can seek to block the transaction in federal court for violating Section 7 of the Clayton Act.

The FTC recently began publishing monthly statistics covering the number of HSR transactions the agencies have received by month.10 These monthly updates reveal the following:

  1. in 2020,11 the FTC received approximately 1,700 reportable transactions, down from each of the prior two years, in which the FTC had received over 2,000;12
  2. the pace of HSR filings peaked in November 2020 with 424 reportable transactions, the highest of any of the reported months;13 and
  3. in 2021, the FTC received more than 3,600 reportable transactions.14

ii Strategies to increase transparency and predictability

iFocus on the current competitive landscape

Despite the fact that the overwhelming majority of transactions continue to be cleared, each transaction presents its own facts and circumstances, and thus a positive outcome is not guaranteed. Careful preparation is, thus, always necessary. Preparation should begin with an assessment of the current competitive landscape gleaned from discussion with the parties, ordinary course and transaction documents and public sources. This assessment should include: 

  1. whether and the extent to which the parties compete against one another;
  2. if the parties compete, for what specific products or services, and in which specific geographies;
  3. identification of actual and potential competitors and their market shares, as well as the strengths and weaknesses of each;
  4. whether new competitors have recently entered the market; and
  5. how likely market entry is in the future.

This assessment of the competitive landscape provides the context to guide the application of past enforcement and case law to the current transaction.

ii Anticipating customer reactions

After assessing the competitive landscape, counsel should then investigate likely customer reaction. The agencies' first substantive step after reviewing an HSR filing often is to ask the parties for their top customers in any area of overlap, along with contact information, and then to contact the parties' top customers to get their perspectives on the transaction. Because these inquiries are not publicly disclosed, and the agencies provide no relevant statistics, it is not possible to precisely gauge the impact of customer reaction on the likelihood of further review.

Nonetheless, it is axiomatic that the antitrust laws are designed to protect competition and customers, not competitors. Thus, it follows that a lack of customer complaints (or, even more so, an indication of favourable customer reaction) will lessen the potential for further review or possible litigation. If no customer is willing to submit an affidavit or testify in court that the transaction will hurt its business, then it will be very difficult for the government to prove that competition or customers are likely to be harmed.

Ideally, antitrust counsel should gather this information before the parties execute the underlying transaction agreement so that the parties can make an informed decision regarding what antitrust-related commitments they are willing to undertake. The problem, of course, is that a proposed transaction almost certainly is not public at that point, and direct customer outreach, thus, is often not feasible. Nevertheless, counsel should work directly with the parties to gauge customer reactions as best they can. For example, the parties may be able to anticipate likely reactions of key, longstanding customers without asking them directly.

iii Make informed contractual commitments

While there is no guarantee that any transaction will clear the HSR process, a careful analysis of the competitive landscape and possible customer reaction, followed by analysis of past enforcement and case law, helps maximise the possibility of success. It also helps the parties make informed decisions regarding the contractual commitments they will be willing to undertake.

For example, targets often request a hell-or-high-water provision, most often at the outset of negotiations. Such provisions require an acquirer to divest any assets or to take any action the agencies require (such as licensing intellectual property) to alleviate their antitrust concerns. If counsel's review has indicated that certain assets may be likely to cause antitrust concerns, and those assets are critical to the underlying economics of the transaction, an acquirer will be less likely to make such a commitment. Conversely, if counsel's review has indicated that issues are unlikely, an acquirer will be more willing to agree to a hell-or-high-water provision, perhaps in exchange for a concession on a provision not related to antitrust.

There are numerous other potential provisions that may also arise over the course of negotiations, such as divestiture caps (limiting the dollar amount or type of assets the acquirer is willing to divest) and reverse break-up fees (giving the acquirer the right to pay a fee and abandon the transaction if the agencies' demands are too onerous). Understanding the larger context of the transaction will help both sides more clearly determine their positions on these matters.

III US antitrust enforcement: the year in review

M&A antitrust enforcement over the last year has revealed several trends, most notably that US agencies are alleging theories of harm that previously were rarely litigated, such as challenges to nascent competitors and consummated acquisitions.

i Nascent competitor challenges

One potential sign of increased enforcement has been the agencies' challenges to acquisitions of a nascent competitor. A nascent competitor is a firm that does not yet have significant market share, but that is uniquely disruptive and has competitive significance that is expected to increase in the absence of the acquisition. These acquisitions can pose competitive concerns regarding potential future competition even if competitive concerns based on present market shares seem low.

After Visa announced its plans in 2020 to acquire Plaid, a financial technology startup, for US$5.3 billion, the DOJ sued to block the merger, alleging 'a violation of both Section 7 of the Clayton Act and Section 2 of the Sherman Act'.15 Although Visa is in the market of using debit cards for transactions and Plaid provides a somewhat different service of providing financial data aggregation to other financial technology applications, the DOJ argued that Plaid 'has been developing an innovative new solution that would be a substitute for Visa's online debit services'.16 Thus, the DOJ argued that '[b]y acquiring Plaid, Visa would eliminate a nascent competitive threat that would likely result in substantial savings and more innovative online debit services for merchants and consumers'.17 In the face of this challenge, Visa and Plaid abandoned their merger agreement on 12 January 2021.18

This year, the FTC also challenged the acquisition of a nascent competitor, causing the parties to abandon the transaction. The FTC filed both an administrative complaint and authorised staff to file a federal complaint to enjoin Procter & Gamble's (P&G) proposed acquisition of Billie.19 The FTC argued that P&G was the market leader in selling both men's and women's razors and that Billie, despite its relatively small size in the women's razor market, was rapidly expanding and causing consumer prices to fall as a result of its marketing campaign 'attacking the practice of pricing women's razors higher than comparable men's razors'.20 The agency also highlighted that although P&G sells primarily to retail stores while Billie sells direct-to-consumer, both companies were expanding in both channels.21 Like Visa and Plaid, P&G and Billie abandoned the acquisition when challenged.22

ii Challenges to consummated acquisitions

Over the course of the past year, the agencies have continued to investigate and challenge consummated transactions. For example, the FTC 'filed an administrative complaint alleging that Altria Group, Inc (Altria) and Juul Labs, Inc (JUUL) entered a series of agreements, including Altria's acquisition of a 35 per cent stake in JUUL that eliminated competition in violation of federal antitrust laws'.23 The Commission alleges that Altria received this stake in JUUL as part of an agreement not to compete with JUUL in the e-cigarette market, violating Section 1 of the Sherman Act and Sections 5 and 7 of the Clayton Act.24 The case remains in administrative proceedings at the time of writing.

In another significant FTC challenge to a consummated merger, the District Court for the District of Columbia rejected the FTC's argument that Facebook violated Section 2 of the Sherman Act in part through the acquisitions of Instagram and WhatsApp.25 This case was especially significant as the FTC does not ordinarily challenge mergers it had previously cleared, but here the Commission had previously approved, by unanimous vote, Facebook's acquisition of Instagram 'without any challenge or conditions'.26 The court ultimately dismissed the complaint but it granted leave to amend. The FTC has since filed an amended complaint, maintaining that Facebook's acquisitions of Instagram and WhatsApp constituted 'an illegal buy-or-bury scheme' 'to maintain [Facebook's] dominance' 'after repeated failed attempts to develop innovative mobile features for its network'.27

iii Vertical merger enforcement

The agencies continue their increased vertical merger enforcement. For example, the FTC challenged Illumina's acquisition of Grail on the theory that Illumina was the 'only viable supplier of a critical input' for Grail's 'non-invasive, early detection liquid biopsy test that can screen for multiple types of cancer in asymptomatic patients at very early stages using DNA sequencing'.28 According to the FTC, 'Illumina is the only provider of DNA sequencing that is a viable option for these multi-cancer early detection, or MCED, tests in the United States'.29 The FTC alleged that the acquisition would allow Illumina to 'raise prices charged to Grail's competitors for NGS instruments and consumables; impede Grail competitors' research and development efforts; or refuse or delay executing licence agreements that all MCED test developers need to distribute their tests to third-party laboratories'.30

The FTC dismissed its complaint for a preliminary injunction in federal district court after the European Commission (EC) announced it was investigating the transaction, which the FTC stated would prevent the parties from closing while the FTC conducted its administrative hearing.31 The parties nonetheless closed the transaction based on their position that the EC does not have jurisdiction to review the merger.32 At the time of writing, however, the EC investigation was still proceeding and the parties were awaiting a decision from the administrative law judge following conclusion of the administrative hearing.33

IV US antitrust enforcement: agency announcements looking ahead

With the election of President Biden in November 2020, there have been numerous announcements from the new Administration signalling increased and aggressive antitrust enforcement, particularly in M&A. In addition to these announcements, the Biden Administration has nominated and appointed new agency leadership – including Attorney General Merrick Garland, Assistant Attorney General for DOJ's Antitrust Division nominee Jonathan Kanter, and FTC Chair Lina Khan – who are well-known advocates for greater antitrust enforcement and critics of 'Big Tech'. Although many of the Biden Administration proposals and plans are still working their way through agencies and have yet to make their way through the courts – who will not necessarily defer to the FTC or DOJ – practitioners should prepare for and expect increased enforcement.

iExecutive order on promoting competition in the US economy

On 9 July 2021, President Biden issued a sweeping executive order aimed at increasing antitrust enforcement, including towards M&A.34 The order calls on '[t]he Attorney General, the Chair of the FTC, and the heads of other agencies with authority to enforce the Clayton Act . . . to enforce the antitrust laws fairly and vigorously', including by potentially unwinding mergers that previously cleared agency review without challenge, particularly in the technology and internet sectors.35 The order also calls on the agencies to 'review the horizontal and vertical merger guidelines and consider whether to revise those guidelines'.36

The order specifically calls for increased scepticism of mergers in certain sectors. To do this, the executive order asks the agencies to 'combat the excessive concentration of industry' 'and the harmful effects of monopoly and monopsony – especially as these issues arise in labor markets, agricultural markets, Internet platform industries, healthcare markets (including insurance, hospital, and prescription drug markets), repair markets, and United States markets directly affected by foreign cartel activity'.37 For 'dominant Internet platforms', the executive order cites 'serial mergers' and the 'acquisition of nascent competitors' as specific areas for increased antitrust M&A enforcement.38

The leaders of the antitrust agencies, FTC Chair Lina Khan and then-Acting Assistant Attorney General of the DOJ Antitrust Division Richard A Powers, issued a statement concurring in the aggressive approach outlined by the executive order, noting that the merger guidelines should 'guide enforcers to review mergers with the scepticism the law demands', arguing that 'the current guidelines deserve a hard look to determine whether they are overly permissive', and committing to 'jointly launch a review of [the] merger guidelines with the goal of updating them to reflect a rigorous analytical approach consistent with applicable law'.39 At the time of writing, the guidelines have not yet received an update.

ii FTC recission of the vertical merger guidelines

Although the FTC and DOJ had jointly released updated vertical merger guidelines on 30 June 2020,40 the FTC rescinded its approval of the vertical merger guidelines on 15 September 2021, noting that it would 'work closely with the DOJ to review and update merger guidance'.41 The DOJ did not join the FTC in rescinding the guidelines, instead stating that it 'is conducting a careful review of the Horizontal Merger Guidelines and Vertical Merger Guidelines'.42 Three FTC commissioners, including the chair, explained in a statement that the FTC rescinded the guidelines because it contained 'certain flawed provisions' including a 'flawed discussion of the purported procompetitive benefits (i.e., efficiencies) of vertical mergers' that were 'inconsistent with the statutory text and market realities'.43 The statement explained that '[u]ntil new guidance is issued, the FTC will analyze mergers in accordance with its statutory mandate, which does not presume efficiencies for any category of mergers'.44

iii Suspension of early termination

On 4 February 2021, the FTC and DOJ released a joint statement noting that the agencies would temporarily cease granting early termination of the HSR waiting period.45 The statement noted that the 'temporary suspension [would] be brief'46 but the suspension has not yet been terminated at the time of publication. The agencies explained that this suspension was necessary because of the 'transition to the new Administration and' 'the unprecedented volume of HSR filings for the start of a fiscal year'.47 In addition to the temporary suspension, the agencies explained that they would conduct a review of 'the processes and procedures used to grant early terminations to filings made under the Hart-Scott-Rodino Act'.48 Merging parties may still, however, request early termination to allow the FTC to grant it if the suspension is lifted during the review.

iv Issuance of warning letters suggesting continued investigation despite HSR clearance

On 3 August 2021, the FTC announced that it has begun sending letters to some merging parties warning that it will continue its investigation beyond the statutory HSR waiting period despite not issuing a Second Request.49 The Commission explained that this was because of a 'tidal wave of merger filings that is straining [its] capacity to investigate deals ahead of the statutory deadlines'.50 The DOJ, however, has not issued a corresponding announcement as of the time of this publication.

Although the FTC and DOJ have always had the authority to review and challenge transactions after the expiry of the 30-day HSR waiting period – or even after a transaction closes – such challenges have been rare.51 Although this change could signal an increase in post-consummation merger challenges, it remains to be seen how frequently these warning letters will be issued and whether their issuance is a harbinger of increased post-consummation challenges.

v Changes to FTC second request process

On 28 September 2021, the Director of the Bureau of Competition of the FTC announced changes to the Second Request process.52 Citing a wave of merger filings and the strain it has placed on the FTC's resources, the announcement indicated five changes to the Second Request process.53 Most notably, in addition to changes more closely aligning the FTC's Second Request process with that of the DOJ, the FTC will now look to more factors to determine whether a transaction merits additional scrutiny including 'for example, how a proposed merger will affect labor markets, the cross-market effects of a transaction, and how the involvement of investment firms may affect market incentives to compete'.54

vi FTC international working group on pharmaceutical mergers

On 16 March 2021, the FTC announced the formation of a working group between '[t]he Federal Trade Commission and its counterpart competition enforcement agencies in the U.S. and abroad' 'to update their approach to analyzing the effects of pharmaceutical mergers'.55 The group seeks 'to identify concrete and actionable steps to review and update the analysis of pharmaceutical mergers' and 'fully analyze the varied competitive concerns' the agencies argue these mergers raise.56

In addition to the FTC, the working group includes 'the Canadian Competition Bureau, the European Commission Directorate General for Competition, the U.K.'s Competition and Markets Authority, the U.S. Department of Justice Antitrust Division, and Offices of State Attorneys General'.57 Then-FTC Acting Chair Rebecca Kelly Slaughter noted that the members of the working group intended to work 'hand in hand' 'to take an aggressive approach to tackling anticompetitive pharmaceutical mergers'.58 It remains to be seen what changes the working group will propose, and what changes the agencies will adopt, with regard to pharmaceutical mergers, but practitioners should note the potential for increased enforcement in the area.


1 Richie Falek, Neely Agin and Conor Reidy are partners and Johanna Rae Hudgens is an associate at Winston & Strawn LLP.

2 Clayton Antitrust Act of 1914, 15 USCA § 18 (West 2018).

3 id.

4 Department of Justice and Federal Trade Commission, Horizontal Merger Guidelines (2010); Department of Justice and Federal Trade Commission, Vertical Merger Guidelines (2020).

5 See Section III.ii for further discussion.

6 Hart-Scott-Rodino Antitrust Improvements Act of 1976, 15 USC § 18a (West 2018).

7 Federal Trade Commission and Department of Justice, Hart-Scott-Rodino Annual Report Fiscal Year 2019 (2019),
department-justice-antitrust-division-hart-scott-rodino/p110014hsrannualreportfy2019.pdf. The Report for fiscal year 2020 is not yet available.

8 15 USCA § 18a; Premerger Notification Office Staff, HSR Threshold Adjustments and Reportability for 2021, Federal Trade Commission: Blogs – Competition Matters (17 February 2021),

9 Federal Trade Commission, FTC, DOJ Suspend Discretionary Practice of Early Termination, Federal Trade Commission: Press Releases (4 February 2021),

10 Federal Trade Commission, Premerger Notification Program, Federal Trade Commission: Enforcement,

11 The FTC's Fiscal Year 2020 covered the period from 1 October 2019 to 30 September 2020.

12 Federal Trade Commission, Premerger Notification Program, Federal Trade Commission: Enforcement,

13 ibid.

14 The FTC's Fiscal Year 2021 covered the period from 1 October 2020 to 30 September 2021.

15 Department of Justice, Protecting Nascent Competition: Visa and Plaid Abandon Anticompetitive Merger, Antitrust Division Spring Update 2021 (24 March 2021), available at

16 Complaint at 1, United States v. Visa Inc., No. 3:20-cv-07810 (N.D. Cal. 5 November 2020).

17 id. at 1-2.

18 Department of Justice (see footnote 15).

19 Federal Trade Commission, FTC Sues to Block Procter & Gamble's Acquisition of Billie, Inc., Press Releases (8 December 2020), available at

20 ibid.

21 ibid.

22 See Federal Trade Commission, Statement of Ian Conner, Director of the FTC's Bureau of Competition, Regarding the Announcement that The Procter & Gamble Company has Abandoned Its Proposed Acquisition of Billie, Inc., Press Releases (5 January 2021).

23 Federal Trade Commission, FTC Sues to Unwind Altria's $12.8 Billion Investment in Competitor Juul (1 April 2021), available at

24 ibid.

25 FTC v. Facebook, Inc., No. 20-3590, 2021 WL 2643627 (28 June 2021).

26 id. at *4 (citing FTC, FTC Closes its Investigation into Facebook's proposed acquisition of Instagram Photo Sharing Program (22 August 2012),

27 Federal Trade Commission, FTC Alleges Facebook Resorted to Illegal Buy-or-Bury Scheme to Crush Competition After String of Failed Attempts to Innovate, Press Releases (19 August 2021).

28 Federal Trade Commission, FTC Challenges Illumina's Proposed Acquisition of Cancer Detection Test Maker Grail, Federal Trade Commission: Press Releases (30 March 2021), available at Note that the FTC brought this challenge while the Vertical Merger Guidelines, discussed in further detail in section IV.iv, were still in effect.

29 ibid.

30 ibid.

31 Federal Trade Commission, Statement of FTC Acting Bureau of Competition Director Maribeth Petrizzi on Bureau's Motion to Dismiss Request for Preliminary Relief in Illumina/GRAIL Case, Federal Trade Commission: Press Releases (20 May 2021), available at

32 See Brent Kendall, Illumina Completes Deal for Life-Sciences Firm Grail Despite FTC Antitrust Challenge, WSJ (19 August 2020), available at

33 See ibid.

34 See White House, Executive Order on Promoting Competition in the American Economy, Briefing Room (9 July 2021), available at

35 ibid.

36 ibid.

37 ibid.

38 ibid.

39 Federal Trade Commission, Statement of FTC Chair Lina Khan and Antitrust Division Acting Assistant Attorney General Richard A Powers on Competition Executive Order's Call to Consider Revisions to Merger Guidelines, Press Releases (9 July 2021), available at

40 Federal Trade Commission, FTC and DOJ Issue Antitrust Guidelines for Evaluating Vertical Mergers, Federal Trade Commission: Press Releases (30 June 2020) available at

41 Federal Trade Commission, Federal Trade Commission Withdraws Vertical Merger Guidelines and Commentary, Federal Trade Commission: Press Releases (15 September 2021),

42 Department of Justice, Justice Department Issues Statement on the Vertical Merger Guidelines, Department of Justice: News (15 September 2021),

43 Federal Trade Commission, Statement of Chair Lina M Khan, Commissioner Rohit Chopra, and Commissioner Rebecca Kelly Slaughter on the Withdrawal of the Vertical Merger Guidelines Commission File No. P810034, at 2, 3 (15 September 2021), available at

44 id. at 2.

45 Federal Trade Commission & Department of Justice, FTC, DOJ Temporarily Suspend Discretionary Practice of Early Termination, Press Releases (4 February 2021), available at

46 ibid.

47 ibid.

48 ibid.

49 Federal Trade Commission, Adjusting Merger Review to deal with the surge in merger filings, Competition Matters (3 August 2021), available at

50 ibid.

51 Since 2001 there have only been seven post-consummation challenges to transactions that were confirmed to be HSR reportable. See Practical Law Antitrust, Consummated Mergers Antitrust Enforcement Chart (2021) (enumerating US antitrust agency enforcement actions against consummated mergers since 2006).

52 Federal Trade Commission, Making the Second Request Process Both More Streamlined and More Rigorous During this Unprecedented Merger Wave (28 September 2021), available at

53 ibid.

54 ibid.

55 Federal Trade Commission, FTC Announces Multilateral Working Group to Build a New Approach to Pharmaceutical Mergers, Press Releases (16 March 2021), available at

56 ibid.

57 ibid.

58 ibid.

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