Comparative Guides

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4. Results: Answers
Merger Control
1.
Legal and enforcement framework
1.1
Which legislative and regulatory provisions govern merger control in your jurisdiction?
United States

Answer ... Merger control is principally governed by Section 7 of the Clayton Act, which prohibits transactions where “the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly”. Both the Federal Trade Commission (FTC) and the Antitrust Division of the Department of Justice (DOJ) have authority to enforce Section 7. The question of which agency will review any given merger is a matter mostly of tradition and long-term expertise, with each agency owning long-standing expertise in particular industries. Section 7A of the Clayton Act (the ‘Hart-Scott-Rodino Act’) governs pre-merger notification and requires parties that meet its size-of-transaction and size-of-person thresholds to file notification forms with the FTC and DOJ and observe a statutory waiting period before consummating the transaction. While the Hart-Scott-Rodino Act determines which transactions are necessarily reviewed by the FTC and DOJ, it does not preclude the agencies from investigating transactions that fall below the relevant thresholds and thereby fail to trigger a filing requirement. The agencies, rather, are free to investigate and potentially challenge all transactions, including those that are already consummated and/or that never faced a Hart-Scott-Rodino filing requirement.

Sections 1 and 2 of the Sherman Act prohibit unreasonable restraints of trade or attempted monopolization and Section 5 of the FTC Act prohibits “unfair method[s] of competition”. Among government agencies, the DOJ enjoys exclusive authority to enforce the Sherman Act, while the FTC enjoys exclusive authority under the FTC Act. Finally, private parties can challenge mergers and acquisitions, but only if they can prove injury resulting from the

For more information about this answer please contact: Joseph Ostoyich from Baker Botts
1.2
Do any special regimes apply in specific sectors (eg, national security, essential public services)?
United States

Answer ... The FTC and DOJ apply the same principles to transactions regardless of the industry involved. However, certain industries can also be reviewed by other federal agencies besides the FTC or the DOJ. For example, the airlines, electric power, banking, railroad and telecommunications industries are all subject to review by the independent federal agencies that regulate their respective industries.

For more information about this answer please contact: Joseph Ostoyich from Baker Botts
1.3
Which body is responsible for enforcing the merger control regime? What powers does it have?
United States

Answer ... The FTC and the DOJ (collectively, “the agencies”) are responsible for enforcing the US antitrust laws governing mergers and acquisitions. DOJ is responsible for enforcing the Sherman Act while the FTC is responsible for enforcing the FTC Act and both agencies share joint enforcement of the Clayton Act. Although both agencies share jurisdiction, only one agency can review a single transaction. The agencies decide which agency will review the merger or acquisition based on prior experience or expertise.

The agencies can seek preliminary injunctions and issue both structural and behavioural remedies for mergers and acquisitions deemed anti-competitive. Structural remedies include divestures, licence or asset swaps, and special conditions imposed on the buyer, among others. Behavioural remedies impose binding commitments to mitigate the anti-competitive effects of the transaction.

Private parties and state attorneys can also challenge mergers and acquisitions in certain circumstances, but private parties must demonstrate that they will be injured by the anti-competitive effects of the transaction.

For more information about this answer please contact: Joseph Ostoyich from Baker Botts
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Merger Control