The FTC’s prior approval policy likely will eliminate incentives to cooperate with antitrust investigationsClick here to read the full article online
The article discusses the US Federal Trade Commission’s (FTC) “Statement of the Commission on Use of Prior Approval Provisions in Merger Orders,” which was published on October 25, 2021. This announced that that the FTC now intends to “routinely require[e] merging parties subject to a Commission order to obtain prior approval before closing any future transaction affecting each relevant market for which a violation was alleged… for a minimum of ten years”. The article identifies key implications of this new policy, including that this intentionally encumbers merging parties with increased risk and uncertainty, and that the FTC may even choose to apply the policy to a party’s future mergers if they have previously abandoned a proposed transaction in response to the FTC’s commencement of litigation (i.e. where that prior transaction was not actually found to violate the Clayton Act).