U.S. Department
of Justice
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Speech
Washington
Speech
Policy Director David Lawrence of the Antitrust Division Delivers Remarks at the Georgetown Center for Business & Public Policy
Location
Washington, DC
United States
Remarks as Prepared for Delivery
Thank you so much John (Mayo) for the kind introduction and to Georgetown for hosting this event. The last time we spoke was actually at the version of this event you all put together on the vertical merger guidelines. It’s great to be back.
I do know I speak for the drafting teams at both agencies, though, when I say we are thrilled to begin the public comment process and hear from all of you. Welcome inside the tent.
That’s really the most important thing I can convey today. We are approaching this comment process with deep appreciation and humility. First, we appreciate the engagement of the broader antitrust community in this project. By being here today and joining in this debate, you will help us make the guidelines the best they can be.
I also have to share my appreciation for the work that has come before. The 2010 guidelines that Howard, Carl Shapiro, Joe Farrell, and others prepared were a tremendous advance. The new draft stands on their shoulders and those of guidelines drafters going back decades.
I will say that’s true as to the 2020 Vertical Guidelines as well. I served as then-AAG Makan Delrahim’s lead on that project, working closely with Bilal Sayyed and a talented team at both agencies. I’m glad to say they have survived, after some evolution, in the form of the proposed Guideline 5.
As I said, we also approach this project with humility. Above all, humility as to our role as law enforcers. Our authority stems from, and depends entirely upon, our faithful application of the laws passed by Congress as interpreted by the Courts, not the Executive. The guidelines are not the law and should not try to be.
What merger guidelines must be, however, is a transparent source to which the public can turn to understand how we undertake our merger analysis. It’s a document that fosters predictability and consistency.
To do that most effectively, I believe guidelines should reflect both of the two key elements of our merger analysis — the law and the economics. We are most transparent and effective when our guidance documents connect the binding precedent to modern economic and analytical tools.
Our Antitrust Guidelines for Collaborations Among Competitors are an example of this approach.[i] They cite binding holdings from the Supreme Court that relate to competitor collaborations, then connect them to economic and policy principles.
In the merger context, we found it difficult to draw the line the competitor collaborations guidelines do and stop at citations to Supreme Court precedent. How could we have a modern presentation of merger law without D.C. Circuit opinions like AT&T/Time Warner[ii] and Baker Hughes?[iii] So we also included key circuit court precedent.
We also closely examined district court decisions to ensure that this binding precedent had not somehow expired. We found that every district court deciding a federal merger challenge in the last three years has relied on Brown Shoe.[iv] 11 out of 11. All told, it has been cited by at least 50 district courts in the last decade.[v] And the Third Circuit just this month affirmed a district court decision turning aside a guidelines-based analysis, rejecting it in favor of Brown Shoe.[vi] The Justice Department lost the Sugar case in part because of our reliance on the 2010 guidelines, rather than Brown Shoe. Philadelphia National Bank[vii] and General Dynamics[viii] are not far behind, with dozens of recent citations each.
So, we knew that the Supreme Court’s seminal cases had to form the bedrock of the guidelines. We also knew that much of Brown Shoe’s economics are outdated, and in some respects just plain wrong. Even where the economic fact-finding in an older Supreme Court case is regrettable and forgettable, however, the holdings of law survive. Drafting the guidelines therefore presented the same challenge we face in every litigation — how do we present modern economics using older binding precedents? How do we bridge the gaps between the law and the economics of merger review?
Those are the questions I’m most excited to get answers to in this public comment process. Let me finish with a couple examples before passing this to Aviv.
First, do the guidelines apply the best framework for considering rebuttal evidence? The rebuttal section follows General Dynamics to examine any “other pertinent factors” that show no substantial lessening of “competition” is “threatened” by the merger.[ix]
That key section “cut[s] back sharply” the prima facie frameworks in the draft guidelines, as Baker Hughes demands.[x] And like both the prima facie and rebuttal sections, it draws on the appendices for the all-important tools of analyzing competition. I’m particularly interested to hear if the rebuttal section and appendices sufficiently empower the use of the best available economic tools to sort procompetitive from anticompetitive mergers under the law.
Relatedly, I look forward to feedback on the framework for the evaluation of efficiencies. I know we had many commenters who opposed including any efficiencies defense — I’d ask them to consider whether accepting an efficiencies rebuttal, as the guidelines do and circuit precedent suggests, is consistent with the law.[xi] I’m also interested to hear from those who emphasized the importance of efficiencies whether the approach in the guidelines sufficiently opens up the analysis to innovation and other dynamic competitive effects.
Our hope is that by examining how competition plays out in each case, as the guidelines follow the statutory text to describe, we better and more comprehensively consider both the risks of harm and potential benefits of proposed mergers.
I could go all day but will stop there in the interests of time. If you can’t tell, we have worked hard and thoughtfully on this draft and are eager to make the final the best it can be. That means ensuring it is transparent and accessible, and that it does justice to both the law and the economics of merger enforcement. Your comments will help us do that, so let me thank you in advance.
I’m excited to pass the microphone to my esteemed colleague Aviv Nevo.
Thank you.
[i] U.S. Dep’t of Justice & Fed. Trade Comm’n, Antitrust Guidelines for Collaborations Among Competitors (Apr. 2000), https://www.ftc.gov/sites/default/files/documents/public_events/joint-venture-hearings-antitrust-guidelines-collaboration-among-competitors/ftcdojguidelines-2.pdf.
[ii] United States v. AT&T, 916 F.3d 1029 (D.C. Cir. 2019); see also U.S. Dep’t of Justice & Fed. Trade Comm’n, 2023 Draft Merger Guidelines 3, 16, 31 (Jul. 19, 2023), https://www.justice.gov/d9/2023-07/2023-draft-merger-guidelines_0.pdf [hereinafter 2023 Draft Merger Guidelines] (citing AT&T, 916 F.3d at 1032, 1035-36, 1043).
[iii] United States v. Baker Hughes Inc., 908 F.2d 981 (D.C. Cir. 1990); see also 2023 Draft Merger Guidelines at 31 (citing Baker Hughes, 908 F.2d at 990). The structure of the Draft Merger Guidelines is premised on the burden-shifting framework reflected in General Dynamics and Baker Hughes (see 2023 Draft Merger Guidelines, Section IV).
[iv] See Fed. Trade Comm'n v. Microsoft Corp., No. 23-CV-02880-JSC, 2023 WL 4443412, at *9 (N.D. Cal. July 10, 2023); Fed. Trade Comm'n v. Meta Platforms Inc., No. 5:22-CV-04325-EJD, 2023 WL 2346238, at *9 (N.D. Cal. Feb. 3, 2023); United States v. Bbrertelsmann SE & Co. KGaA, No. CV 21-2886-FYP, 2022 WL 16949715, at *11 (D.D.C. Nov. 15, 2022); United States v. Booz Allen Hamilton Inc., No. CV CCB-22-1603, 2022 WL 9976035, at *9 (D. Md. Oct. 17, 2022); United States v. United States Sugar Corp., No. CV 21-1644 (MN), 2022 WL 4544025, at *20 (D. Del. Sept. 28, 2022), aff'd, No. 22-2806, 2023 WL 4526605 (3d Cir. July 13, 2023); United States v. UnitedHealth Grp. Inc., 630 F. Supp. 3d 118, 129 (D.D.C. 2022), dismissed, No. 22-5301, 2023 WL 2717667 (D.C. Cir. Mar. 27, 2023); Fed. Trade Comm'n v. Hackensack Meridian Health, Inc., No. CV 20-18140, 2021 WL 4145062, at *14 (D.N.J. Aug. 4, 2021), aff'd, 30 F.4th 160 (3d Cir. 2022); Fed. Trade Comm'n v. Thomas Jefferson Univ., 505 F. Supp. 3d 522, 537 (E.D. Pa. 2020); Fed. Trade Comm'n v. Peabody Energy Corp., 492 F. Supp. 3d 865, 892-901 (E.D. Mo. 2020); United States v. Sabre Corp., 452 F. Supp. 3d 97, 142 (D. Del. 2020), vacated on other grounds, No. 20-1767, 2020 WL 4915824 (3d Cir. July 20, 2020); Fed. Trade Comm'n v. RAG-Stiftung, 436 F. Supp. 3d 278, 292 (D.D.C. 2020)
[v] Recent district court cases cite Brown Shoe most often for its market definition holding, though also for its language on several other propositions of law, including the incipiency standard and trends toward concentration. The author is aware of no recent case crediting the errant economic analyses underlying Brown Shoe. See, e.g., Fed. Trade Comm'n v. Microsoft Corp., No. 23-CV-02880-JSC, 2023 WL 4443412, at *9 (N.D. Cal. July 10, 2023); Dairy, LLC v. Milk Moovement, Inc., No. 2:21-CV-02233 WBS AC, 2023 WL 3437426, at *7 (E.D. Cal. May 12, 2023); Demartini v. Microsoft Corp., No. 22-CV-08991-JSC, 2023 WL 2588173, at *5 (N.D. Cal. Mar. 20, 2023); Corrente v. Charles Schwab Corp., No. 4:22-CV-00470, 2023 WL 2244680, at *3 (E.D. Tex. Feb. 24, 2023); In re NorthShore Univ. HealthSystem Antitrust Litig., No. 07 CV 04446, 2023 WL 2138971, at *10 (N.D. Ill. Feb. 20, 2023); Saint Francis Hosp. & Med. Ctr., Inc. v. Hartford Healthcare Corp., No. 3:22-CV-50 (SVN), 2023 WL 1967133, at *18 (D. Conn. Feb. 13, 2023); Fed. Trade Comm'n v. Meta Platforms Inc., No. 5:22-CV-04325-EJD, 2023 WL 2346238, at *9 (N.D. Cal. Feb. 3, 2023) (citing to Brown Shoe 13 times); United States v. Bertelsmann SE & Co. KGaA, No. CV 21-2886-FYP, 2022 WL 16949715, at *11 (D.D.C. Nov. 15, 2022); United States v. Booz Allen Hamilton Inc., No. CV CCB-22-1603, 2022 WL 9976035, at *9 (D. Md. Oct. 17, 2022); United States v. United States Sugar Corp., No. CV 21-1644 (MN), 2022 WL 4544025, at *20 (D. Del. Sept. 28, 2022), aff'd, No. 22-2806, 2023 WL 4526605 (3d Cir. July 13, 2023); Camaisa v. Pharm. Rsch. Assocs., Inc., No. 21-CV-00775-EJW, 2022 WL 843653, at *6 (D. Del. Mar. 22, 2022); United States v. UnitedHealth Grp. Inc., 630 F. Supp. 3d 118, 129 (D.D.C. 2022), dismissed, No. 22-5301, 2023 WL 2717667 (D.C. Cir. Mar. 27, 2023); PlusPass, Inc. v. Verra Mobility Corp., No. 220CV10078SBSKX, 2021 WL 4775573, at *4 (C.D. Cal. Aug. 9, 2021); Fed. Trade Comm'n v. Hackensack Meridian Health, Inc., No. CV 20-18140, 2021 WL 4145062, at *14 (D.N.J. Aug. 4, 2021), aff'd, 30 F.4th 160 (3d Cir. 2022); Fed. Trade Comm'n v. Thomas Jefferson Univ., 505 F. Supp. 3d 522, 537 (E.D. Pa. 2020); Las Vegas Sun, Inc. v. Adelson, No. 219CV01667GMNBNW, 2020 WL 7029148, at *5 (D. Nev. Nov. 30, 2020); Fed. Trade Comm'n v. Peabody Energy Corp., 492 F. Supp. 3d 865, 892-901 (E.D. Mo. 2020); Bio-Rad Lab'ys, Inc. v. 10X Genomics, Inc., 483 F. Supp. 3d 38, 56 (D. Mass. 2020); Intel Corp. v. Fortress Inv. Grp. LLC, No. 19-CV-07651-EMC, 2020 WL 6390499, at *6 (N.D. Cal. July 15, 2020); United States v. Sabre Corp., 452 F. Supp. 3d 97, 142 (D. Del. 2020), vacated on other grounds, No. 20-1767, 2020 WL 4915824 (3d Cir. July 20, 2020); Bradt v. T-Mobile US, Inc., No. 19-CV-07752-BLF, 2020 WL 1809716, at *2 (N.D. Cal. Feb. 28, 2020); Payment Logistics Ltd. v. Lighthouse Network, LLC, No. 3:18-CV-00786-L-AGS, 2019 WL 4747664, at *2 (S.D. Cal. Sept. 30, 2019); Med Vets Inc. v. VIP Petcare Holdings, Inc., No. 18-CV-02054-MMC, 2019 WL 1767335, at *3 (N.D. Cal. Apr. 22, 2019), aff'd, 811 F. App'x 422 (9th Cir. 2020); New York v. Deutsche Telekom AG, 439 F. Supp. 3d 179, 199 (S.D.N.Y. 2020); Fed. Trade Comm'n v. RAG-Stiftung, 436 F. Supp. 3d 278, 292 (D.D.C. 2020); BanxCorp v. Bankrate, Inc., No. CV 07-3398 (CCC), 2019 WL 2098842, at *5 (D.N.J. Mar. 21, 2019), aff'd, 847 F. App'x 116 (3d Cir. 2021); Washington v. Franciscan Health Sys., 388 F. Supp. 3d 1296, 1300–01 (W.D. Wash. 2019); Fed. Trade Comm'n v. Wilh. Wilhelmsen Holding ASA, 341 F. Supp. 3d 27, 47 (D.D.C. 2018); Fed. Trade Comm'n v. Tronox Ltd., 332 F. Supp. 3d 187, 198 (D.D.C. 2018); United States v. AT&T Inc., 310 F. Supp. 3d 161, 195 (D.D.C. 2018), aff'd sub nom. United States v. AT&T, Inc., 916 F.3d 1029 (D.C. Cir. 2019); Fed. Trade Comm'n v. Sanford Health, Sanford Bismarck, No. 1:17-CV-133, 2017 WL 10810016, at *24 (D.N.D. Dec. 15, 2017), aff'd sub nom. Fed. Trade Comm'n v. Sanford Health, 926 F.3d 959 (8th Cir. 2019); Intell. Ventures I LLC v. Cap. One Fin. Corp., 280 F. Supp. 3d 691, 701 (D. Md. 2017), aff'd, 937 F.3d 1359 (Fed. Cir. 2019); SureShot Golf Ventures, Inc. v. Topgolf Int'l, Inc., No. CV H-17-127, 2017 WL 3658948, at *5 (S.D. Tex. Aug. 24, 2017), aff'd as modified, 754 F. App'x 235 (5th Cir. 2018); United States v. Energy Sols., Inc., 265 F. Supp. 3d 415, 436 (D. Del. 2017); Fed. Trade Comm'n v. Advoc. Health Care, No. 15 C 11473, 2017 WL 1022015, at *3 (N.D. Ill. Mar. 16, 2017); United States v. Anthem, Inc., 236 F. Supp. 3d 171, 193–94 (D.D.C. 2017); United States v. Aetna Inc., 240 F. Supp. 3d 1, 21 (D.D.C. 2017); Int'l Constr. Prod. LLC v. Caterpillar Inc., No. CV 15-108-RGA, 2016 WL 4445232, at *7 (D. Del. Aug. 22, 2016); Omni Healthcare Inc. v. Health First, Inc., No. 613CV1509ORL37DAB, 2016 WL 4272164, at *8 (M.D. Fla. Aug. 13, 2016); Fed. Trade Comm'n v. Staples, Inc., 190 F. Supp. 3d 100, 127 (D.D.C. 2016); Fed. Trade Comm'n v. Penn State Hershey Med. Ctr., 185 F. Supp. 3d 552, 555 (M.D. Pa.), rev'd and remanded on other grounds, 838 F.3d 327 (3d Cir. 2016); United States v. Trib. Publ'g Co., No. CV1601822ABPJWX, 2016 WL 2989488, at *3 (C.D. Cal. Mar. 18, 2016); Int'l Constr. Prod. LLC v. Caterpillar Inc., No. CV 15-108-RGA, 2016 WL 264909, at *7 (D. Del. Jan. 21, 2016); Int'l Ass'n of Machinists & Aerospace Workers, AFL-CIO, Loc. Lodge No. 1821 v. Verso Corp., 153 F. Supp. 3d 419, 440 (D. Me. 2015); Fed. Trade Comm'n v. Steris Corp., 133 F. Supp. 3d 962, 965 (N.D. Ohio 2015); Alarm Detection Sys., Inc. v. Orland Fire Prot. Dist., 129 F. Supp. 3d 614, 631–32 (N.D. Ill. 2015); Fed. Trade Comm'n v. Sysco Corp., 113 F. Supp. 3d 1, 27-33 (D.D.C. 2015); Saint Alphonsus Med. Ctr. - Nampa, Inc. v. St. Luke's Health Sys., Ltd., No. 1:12-CV-00560-BLW, 2014 WL 407446, at *21 (D. Idaho Jan. 24, 2014), aff'd, 778 F.3d 775 (9th Cir. 2015); United States v. Bazaarvoice, Inc., No. 13-CV-00133-WHO, 2014 WL 203966, at *66 (N.D. Cal. Jan. 8, 2014); Intell. Ventures I LLC v. Cap. One Fin. Corp., No. 1:13-CV-00740 AJT, 2013 WL 6682981, at *9 (E.D. Va. Dec. 18, 2013).
[vi] See United States v. United States Sugar Corp., No. 22-2806, 2023 WL 4526605 (3d Cir. July 13, 2023) (citing Brown Shoe and affirming District Court’s approach to examine “practical indicia…rather than relying upon HMT analysis.”).
[vii] At least 29 district court cases in the last decade have relied on United States v. Philadelphia National Bank, 374 U.S. 321 (1963). See, e.g., Amimon, Inc. v. Shenzhen Hollyland Tech Co., No. 20-CV-9170 (ER), 2023 WL 2478159, at *9 (S.D.N.Y. Mar. 13, 2023) (“In other words, [Section 7] prohibits transactions of stocks that may lessen competition in a product or geographic market.”) (citing Phila. Nat'l Bank, 374 U.S. at 355–56); Corrente v. Charles Schwab Corp., No. 4:22-CV-00470, 2023 WL 2244680, at *5 (E.D. Tex. Feb. 24, 2023) (“A plaintiff asserting claims under § 7 of the Clayton Act can make a prima facie showing of probable anticompetitive results in one of two ways: (1) by showing that ‘the size of the entities involved makes them inherently suspect in light of Congress's design to prevent undue economic concentration, thereby resulting in a significant increase in market share and an undue market concentration’ or (2) ‘by showing that other characteristics of the market make the merger or acquisition more economically harmful than the bare market share and market concentration statistics otherwise indicate.’”) (quoting Phila. Nat’l Bank, 374 U.S. at 363) (internal citation omitted); Saint Francis Hosp. & Med. Ctr., Inc. v. Hartford Healthcare Corp., No. 3:22-CV-50 (SVN), 2023 WL 1967133, at *15 (D. Conn. Feb. 13, 2023) (“Horizontal transactions are those between actual or potential competitors; they involve a firm ‘controlling an undue percentage share of the relevant market, and result[ ] in a significant increase in the concentration of firms in that market” that is “inherently likely to lessen competition substantially.’”) (quoting Phila. Nat'l Bank, 374 U.S. at 364); United States v. Bertelsmann SE & Co. KGaA, No. CV 21-2886-FYP, 2022 WL 16949715, at *20 (D.D.C. Nov. 15, 2022) (“In Philadelphia National Bank, the Supreme Court held that a significant change in concentration that results in a combined market share of at least 30 percent is sufficient to establish the legal presumption that a merger violates Section 7.”) (citing Phila. Nat'l Bank, 374 U.S. at 331, 364); United States v. United States Sugar Corp., No. CV 21-1644 (MN), 2022 WL 4544025, at *23 (D. Del. Sept. 28, 2022), aff'd, No. 22-2806, 2023 WL 4526605 (3d Cir. July 13, 2023) (“’The proper question to be asked in this case is not where the parties to the merger do business or even where they compete, but where, within the area of competitive overlap, the effect of the merger on competition will be direct and immediate.’”) (citing Phila. Nat'l Bank, 374 U.S. at 357); Camaisa v. Pharm. Rsch. Assocs., Inc., No. 21-CV-00775-EJW, 2022 WL 843653, at *7 (D. Del. Mar. 22, 2022) (“The traditional method of demonstrating this is by showing a merger would ‘produce a firm controlling an undue percentage of the relevant market’ and would ‘result[ ] in a significant increase in the concentration of firms in that market.’”) (citing See Phila. Nat'l Bank, 374 U.S. at 363); PlusPass, Inc. v. Verra Mobility Corp., No. 220CV10078SBSKX, 2021 WL 4775573, at *5 (C.D. Cal. Aug. 9, 2021) (“To establish a prima facie case under Section 7 of the Clayton Act, a plaintiff must first define the relevant market, and then establish that the proposed merger will create an appreciable danger of anticompetitive consequences.”) (California v. Sutter Health Sys., 130 F. Supp. 2d 1109, 1118 (N.D. Cal. 2001) (citing Philadelphia Nat'l Bank, 374 U.S. at 362)); Fed. Trade Comm'n v. Hackensack Meridian Health, Inc., No. CV 20-18140, 2021 WL 4145062, at *18 (D.N.J. Aug. 4, 2021), aff'd, 30 F.4th 160 (3d Cir. 2022) (“An element of ‘fuzziness would seem inherent in any attempt to delineate the relevant geographic market.’”) (quoting Phila. Nat'l Bank, 374 U.S. 321, 360 n.37 (1963) (internal citation omitted)); Bio-Rad Lab'ys, Inc. v. 10X Genomics, Inc., 483 F. Supp. 3d 38, 58 (D. Mass. 2020) (“To allege that the acquisition of RainDance was a violation of the Clayton Act with respect to the DSCP market, 10X must provide facts indicating that the effect of the merger “‘may be substantially to lessen competition, or tend to create a monopoly.’”) (quoting Phila. Nat'l Bank, 374 U.S. at 387); Fed. Trade Comm'n v. Peabody Energy Corp., 492 F. Supp. 3d 865, 907 (E.D. Mo. 2020) (noting that a proposed JV that would create a single entity with 68% market share “far exceeds what the Supreme Court has held to be a concerning level of concentration” and finding a presumption of anticompetitive effects created by FTC’s showing of both market share and HHI levels) (citing Phila. Nat'l Bank, 374 U.S. at 364-65); Bradt v. T-Mobile US, Inc., No. 19-CV-07752-BLF, 2020 WL 1809716, at *2 (N.D. Cal. Feb. 28, 2020) (“Section 7 prohibits a merger if its effect “may be substantially to lessen competition.”) (citing Phila. Nat’l Bank, 374 U.S. at 355); New York v. Deutsche Telekom AG, 439 F. Supp. 3d 179, 205 (S.D.N.Y. 2020) (“By one measure, a merger will be presumptively anticompetitive if the merged firm would have more than a 30 percent market share.”) (citing Phila. Nat'l Bank, 374 U.S. at 364-66); Payment Logistics Ltd. v. Lighthouse Network, LLC, No. 3:18-CV-00786-L-AGS, 2019 WL 4747664, at *5 (S.D. Cal. Sept. 30, 2019) (“Under [Section 7 of the Clayton Act], a plaintiff must allege that the acquisition will create an appreciable danger of anticompetitive consequences.”) (citing Phila. Nat'l Bank, 374 U.S. at 364); BanxCorp v. Bankrate, Inc., No. CV 07-3398 (CCC), 2019 WL 2098842, at *10 (D.N.J. Mar. 21, 2019), aff'd, 847 F. App'x 116 (3d Cir. 2021) (“In order to establish a prima facie violation of Section 7, a plaintiff must demonstrate that the acquisition ‘produces a firm controlling an undue percentage share of the relevant market, and results in a significant increase in the concentration of firms in that market ....’”) (quoting Phila. Nat'l Bank, 374 U.S. at 363); Fed. Trade Comm'n v. Wilh. Wilhelmsen Holding ASA, 341 F. Supp. 3d 27, 46 (D.D.C. 2018) (relevant product market can be a “cluster of products . . . and services”) (quoting Phila. Nat'l Bank, 374 U.S. at 356); Fed. Trade Comm'n v. Tronox Ltd., 332 F. Supp. 3d 187, 202 (D.D.C. 2018) (noting that the Supreme Court recognized there is “some artificiality” in market boundaries, but “such fuzziness” is inherent in bounding any market) (citing Areeda & Hovenkamp at ¶ 530d, quoting Phila. Nat'l Bank, 374 U.S. at 359 n.36 & 360 n.37); United States v. AT & T Inc., 310 F. Supp. 3d 161, 192 (D.D.C. 2018), aff'd sub nom. United States v. AT&T, Inc., 916 F.3d 1029 (D.C. Cir. 2019) (“In the typical horizontal merger case under Section 7, the Government's path to carrying its prima facie burden is clear: by putting forward statistics to show that the proposed ‘merger would produce a firm controlling an undue percentage share of the relevant market, and would result in a significant increase in the concentration of firms in that market,’ the Government triggers a “ ‘presumption’ that the merger will substantially lessen competition.”) (quoting Phila. Nat'l Bank, 374 U.S. at 363) (other internal citations omitted); Fed. Trade Comm'n v. Sanford Health, Sanford Bismarck, No. 1:17-CV-133, 2017 WL 10810016, at *12 (D.N.D. Dec. 15, 2017), aff'd sub nom. Fed. Trade Comm'n v. Sanford Health, 926 F.3d 959 (8th Cir. 2019) (“A merger that significantly increases market shares and market concentration is presumed to be unlawful under Section 7 of the Clayton Act.”) (citing Phila. Nat'l Bank, 374 U.S. at 363); Intell. Ventures I LLC v. Cap. One Fin. Corp., 280 F. Supp. 3d 691, 701 (D. Md. 2017), aff'd, 937 F.3d 1359 (Fed. Cir. 2019) (citing Phila. Nat’l Bank for proposition that “‘relevant market’ is a necessary element of all of Capital One’s antitrust claims.”); United States v. Energy Sols., Inc., 265 F. Supp. 3d 415, 441 (D. Del. 2017) (“While there is no bright-line rule as to the minimum percentage that qualifies as undue, the Supreme Court has held that a post-merger market share of 30% triggered the presumption of anticompetitive effects.”) (citing Phila. Nat'l Bank, 374 U.S. at 364); Fed. Trade Comm'n v. Advoc. Health Care, No. 15 C 11473, 2017 WL 1022015, at *7 (N.D. Ill. Mar. 16, 2017) (acknowledging that if plaintiffs shows that the merger would result in undue concentration in the relevant market, plaintiffs establish that the merger is “inherently likely to lessen competition substantially,” and it “must be enjoined in the absence of evidence clearly showing that the merger is not likely to have such anticompetitive effects.”) (quoting Phila. Nat'l Bank, 374 U.S. at 363); United States v. Anthem, Inc., 236 F. Supp. 3d 171, 191–92 (D.D.C. 2017) ( To establish a presumption that the merger will substantially lessen competition, “the government must show that the merger would produce ‘a firm controlling an undue percentage share of the relevant market, and [would] result[ ] in a significant increase in the concentration of firms in that market.’”) (quoting Phila. Nat'l Bank, 374 U.S. at 363) (internal citations omitted); Dehoog v. Inbev, No. 1:15-CV-02250-CL, 2016 WL 5853733, at *3 (D. Or. July 22, 2016), report and recommendation adopted, No. 1:15-CV-02250-CL, 2016 WL 5858663 (D. Or. Oct. 3, 2016), aff'd sub nom. DeHoog v. Anheuser-Busch InBev SA/NV, 899 F.3d 758 (9th Cir. 2018) (“merger would produce ‘a firm controlling an undue percentage share of the relevant market, and [would] result ... in a significant increase in the concentration of firms in the market.’”) (quoting Phila. Nat'l Bank, 374 U.S. at 363) (internal citation omitted);United States v. Trib. Publ'g Co., No. CV1601822ABPJWX, 2016 WL 2989488, at *4 (C.D. Cal. Mar. 18, 2016) (“’[A] merger which produces a firm controlling an undue percentage share of the relevant market, and results in a significant increase in the concentration of firms in that market[,] is so inherently likely to lessen competition substantially[,] that it must be enjoined in the absence of evidence clearly showing that the merger is not likely to have such anticompetitive effects.’”) (quoting Phila. Nat'l Bank, 374 U.S. at 363); Int'l Ass'n of Machinists & Aerospace Workers, AFL-CIO, Loc. Lodge No. 1821 v. Verso Corp., 153 F. Supp. 3d 419, 440 (D. Me. 2015) (holding that the court “unable to fit the Plaintiffs' theory of Clayton Act liability into the language of the statute or the caselaw that has interpreted it.”) (quoting Phila. Nat'l Bank, 374 U.S. at 363); Omni Healthcare Inc. v. Health First, Inc., No. 613CV1509ORL37DAB, 2016 WL 4272164, at *11 (M.D. Fla. Aug. 13, 2016) (citing Phila. Nat'l Bank, 374 U.S. at 356, noting that clusters of products can compose a distinct product market); Fed. Trade Comm'n v. Sysco Corp., 113 F. Supp. 3d 1, 52 (D.D.C. 2015) (applying Philadelphia National Bank’s “’presumption’ that the merger would substantially lessen competition.”); Saint Alphonsus Med. Ctr. - Nampa, Inc. v. St. Luke's Health Sys., Ltd., No. 1:12-CV-00560-BLW, 2014 WL 407446, at *21 (D. Idaho Jan. 24, 2014), aff'd, 778 F.3d 775 (9th Cir. 2015) (“A fundamental purpose of § 7 is ‘to arrest the trend toward concentration, the tendency to monopoly, before the consumer's alternatives disappeared through merger....’’) (quoting Phila. Nat'l Bank, 374 U.S. at 367); United States v. Bazaarvoice, Inc., No. 13-CV-00133-WHO, 2014 WL 203966, at *64 (N.D. Cal. Jan. 8, 2014) (affirming Philadelphia National Bank’s “‘presumption’ that the merger would substantially lessen competition in violation of Section 7.”).
[viii] At least 13 district court cases in the last decade have relied on United States v. General Dynamics Corp., 415 U.S. 486 (1974). See, e.g., Demartini v. Microsoft Corp., No. 22-CV-08991-JSC, 2023 WL 2588173, at *5 (N.D. Cal. Mar. 20, 2023) (“To evaluate ‘the probable anticompetitive effect of a merger,’ courts ‘examin[e] the particular market—its structure, history and probable future[.]’”) (quoting Gen. Dynamics. 415 U.S. at 498); United States v. UnitedHealth Grp. Inc., 630 F. Supp. 3d 118, 129 (D.D.C. 2022), dismissed, No. 22-5301, 2023 WL 2717667 (D.C. Cir. Mar. 27, 2023) (“Only examination of the particular market—its structure, history and probable future—can provide the appropriate setting for judging the probable anticompetitive effect of the merger.”) (quoting Gen. Dynamics, 415 U.S. at 498) (internal citation omitted); Fed. Trade Comm'n v. Hackensack Meridian Health, Inc., No. CV 20-18140, 2021 WL 4145062, at *23 (D.N.J. Aug. 4, 2021), aff'd, 30 F.4th 160 (3d Cir. 2022) (“The Supreme Court has explained that post-acquisition evidence ‘tending to diminish the probability or impact of anticompetitive effects’ can be considered but ‘the probative value of such evidence’ is ‘extremely limited.’) (citing Gen. Dynamics, 415 U.S. at 504) (internal citations omitted)); Bradt v. T-Mobile US, Inc., No. 19-CV-07752-BLF, 2020 WL 1809716, at *2 (N.D. Cal. Feb. 28, 2020) (“To evaluate the probable anticompetitive effect of a merger, courts examine ‘the particular market—its structure, history and probable future[.]’”) (quoting Gen. Dynamics, 415 U.S. at 498); New York v. Deutsche Telekom AG, 439 F. Supp. 3d 179, 217 (S.D.N.Y. 2020) (“Evidence that a merging party is a “weakened competitor” that cannot compete effectively in the future may serve to rebut a presumption that the merger would have anticompetitive effects.”) (citing Gen. Dynamics, 415 U.S. at 508); Fed. Trade Comm'n v. RAG-Stiftung, 436 F. Supp. 3d 278, 309 (D.D.C. 2020) (“To be sure, a geographical market need not be defined by precise metes and bounds.” (citing Gen. Dynamics, 415 U.S. at 521); Washington v. Franciscan Health Sys., 388 F. Supp. 3d 1296, 1299 (W.D. Wash. 2019) (“‘plaintiffs in § 7 cases generally present other evidence as part of the prima facie case’ such as the market's structure, history, and probable future.”) (citing Gen. Dynamics, 415 U.S. at 521) (other internal citations omitted); United States v. AT & T Inc., 310 F. Supp. 3d 161, 190 (D.D.C. 2018), aff'd sub nom. United States v. AT&T, Inc., 916 F.3d 1029 (D.C. Cir. 2019) (“[O]nly ... examination of the particular market—its structure, history and probable future—can provide the appropriate setting for judging the probable anticompetitive effect of the merger.”) (quoting Gen. Dynamics, 415 U.S. at 498); Steves & Sons, Inc. v. JELD-WEN, Inc., 290 F. Supp. 3d 507, 515-16 (E.D. Va. 2018) (distinguishing General Dynamics from facts presented regarding a weakened competitor); United States v. Energy Sols., Inc., 265 F. Supp. 3d 415, 444 (D. Del. 2017) (“The failing-firm doctrine applies a ‘choice of evils’ approach where ‘the possible threat to competition resulting from an acquisition is deemed preferable to the adverse impact on competition and other losses if the company goes out of business.’”) (quoting Gen. Dynamics, 415 U.S. at 507); United States v. Aetna Inc., 240 F. Supp. 3d 1, 76 (D.D.C. 2017) (“Antitrust law is concerned with a ‘company's future ability to compete’”) (quoting Gen. Dynamics, 415 U.S. at 501); Fed. Trade Comm'n v. Staples, Inc., 190 F. Supp. 3d 100, 116 (D.D.C. 2016) (“Examination of the particular market, including its structure, history and probable future, is necessary to ‘provide the appropriate setting for judging the probable anticompetitive effects of the merger.’) (citing Gen. Dynamics, 415 U.S. at 498) (other internal citations omitted); United States v. Bazaarvoice, Inc., No. 13-CV-00133-WHO, 2014 WL 203966, at *75 (N.D. Cal. Jan. 8, 2014) (“Supreme Court authority predating the enactment of the HSR Act establishes and affirms the burden-shifting framework for analyzing Section 7 cases and applies equally to pre- and post-merger cases.”) (citing General Dynamics Corp., 415 U.S. 486 (post-merger) and Philadelphia Nat'l Bank, 422 U.S. 86 (pre-merger)).
[ix] 2023 Draft Merger Guidelines at 31 (citing Gen. Dynamics Corp., 415 U.S. at 498 and Baker Hughes, 908 F.2d at 990).
[x] Baker Hughes Inc., 908 F.2d at 990.
[xi] United States v. Anthem, Inc., 855 F.3d 345, 354-57 (D.C. Cir. 2017) (rejecting argument that older cases such as Procter & Gamble had expired or been impliedly overruled, and stating: “Even if ‘the Supreme Court has not decided a case assessing the lawfulness of a horizontal merger under Section 7 of the Clayton Act since 1975, it still is not a lower court’s role to ignore on-point precedent…’”)).
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David Lawrence, Policy Director
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Updated July 26, 2023