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DOJ Tweaks Guidelines on Divestitures, Antitrust Merger Remedies

Sept. 3, 2020, 4:43 PM

The Justice Department is updating its merger guidelines for the first time in more than a decade, modernizing the way it will order certain fixes, such as asset selloffs, to resolve federal antitrust concerns.

“The modernized Merger Remedies Manual reflects our renewed focus on enforcing obligations in consent decrees and reaffirms the Division’s commitment to effective structural relief,” DOJ antitrust chief Makan Delrahim said in a statement Thursday. “It will provide greater transparency and predictability regarding the Division’s approach to remedying a proposed merger’s competitive harm.”

The updated merger remedy manual outlines how the DOJ will structure certain settlements to ensure that competition remains robust once a merger is completed.

For example, DOJ enforcers may require companies to offload additional assets aside from those that present the most significant antitrust concerns. The DOJ also may seek additional enforcement action, such as fining a company if it fails to follow through with an antitrust settlement order.

The newly released guidelines come less than a week after the DOJ said it’s considering an overhaul of how it reviews bank mergers. Under Delrahim, the DOJ has consistently reevaluated its antitrust approach, most notably issuing revised vertical merger guidelines outlining how federal antitrust enforcers, including the Federal Trade Commission, will review deals involving companies in different parts of a supply chain.

Companies routinely agree to some sort of settlement with the DOJ, such as a divestiture order. Without it, the government likely would block deals, forcing the merging companies to defend themselves in court.

T-Mobile U.S. Inc., for example, agreed to divest spectrum and Sprint’s prepaid brand Boost Mobile to Dish Network Corp. in order to complete its acquisition of Sprint. The DOJ ordered the asset selloff as a condition for approving the Sprint deal.

To contact the reporter on this story: Victoria Graham in Washington at vgraham@bloomberglaw.com

To contact the editors responsible for this story: Laura D. Francis at lfrancis@bloomberglaw.com, Roger Yu at ryu@bloomberglaw.com

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