The Federal Trade Commission and the Justice Department announced Tuesday that they will work together to update the government’s merger guidelines, signaling a crackdown on large deals between companies.
The new push will likely result in greater government scrutiny of merger deals between businesses, particularly in the tech industry, which has been a target of increased focus in the past few years after a string of notable acquisitions by Facebook, Amazon, Apple, and Microsoft.
The two agencies in charge of policing companies for anti-competitive conduct, the FTC and the DOJ, announced they are seeking public input over the next 60 days regarding how to modernize the antitrust laws in relation to mergers.
“Illegal mergers can inflict a host of harms, from higher prices and lower wages to diminished opportunity, reduced innovation and less resiliency,” FTC Chairwoman Lina Khan said in a statement.
DEMOCRATIC TOP REGULATOR SAYS BREAKING UP BIG TECH COULD A GOOD, ‘CONSERVATIVE’ SOLUTION
In September, the Democratic-controlled FTC revoked the Trump administration’s guidelines on vertical mergers, or deals between two companies that aren’t direct competitors.
The DOJ said separately in September that it would also work on writing new merger guidelines in conjunction with the FTC but would continue to use Trump-era guidelines for the time being.
“We need to understand why so many industries have too few competitors, and to think carefully about how to ensure our merger enforcement tools are fit for purpose in the modern economy,” Assistant Attorney General Jonathan Kanter said in a statement Tuesday.
The merger announcement marks the first significant collaboration between Kanter and Khan, two liberal anti-monopolists nominated by President Joe Biden to tackle competition issues with the economy.
This action could affect major vertical mergers such as Amazon’s bid for MGM Studios, Microsoft’s recent deal to buy video game-maker Activision, and biotechnology giant Illumina’s acquisition of cancer startup Grail.
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In a joint release outlining the new initiative, the two agencies noted that they are focused on looking into “aspects of competition the [current] guidelines may underemphasize or neglect, such as labor market effects and non-price elements of competition like innovation, quality, potential competition.”
