Revised merger guidelines were a hot topic at the American Bar Association's Antitrust Fall Forum this morning at the National Press Club in Washington.
"The way we in the enforcement agencies go about analyzing mergers is not entirely consistent with the way the process is described in the 1992 guidelines," said Richard Feinstein, director of the Federal Trade Commission's Bureau of Competition, who spoke on a panel of FTC officials.
In September, the FTC and the Department of Justice's Antitrust Division announced they would "explore the possibility" of updating the 17-year-old horizontal merger guidelines. The guidelines are used by both agencies to evaluate the potential competitive effects of mergers and acquisitions.
“There is no certainty how [the guidelines] will be revised, but there is some reasonable expectation that they will be,” said Feinstein (who joked he'd like them to be called "Rich's Guidelines").
The goal, he said, is to make any new guidance "clear and intelligible to more than just the people in this room." Over 100 antitrust lawyers, including large contingents from both the DOJ and FTC, were on hand for the morning panel discussions.
To date, the agencies have received 39 public comments on creating new guidelines. At today's meeting, Carl Shapiro, deputy assistant attorney general for economic analysis, announced five upcoming workshops on the topic. The first will be held in Washington at the FTC on Dec. 3.
Shapiro said that the workshops will "explore whether the guidelines should be updated to reflect the fact that investigations often do not begin with, or focus on, market definition or concentration."
In addition, he said, updated guidelines could "explain more clearly" the implications of the "hypothetical monopolist test" - that is, defining a market in which a hypothetical monopolist could impose a small but significant nontransitory increase in price – as well as the related use of critical loss analysis.
Feinstein also flagged for review the "safe harbors and thresholds" of the Herfindahl-Hirschman Index, which measures market concentration.
But Molly Boast, deputy assistant attorney general for civil matters, cautioned, "I'm not a huge guidelines fan. Sometimes the effort to create transparency becomes a set of regulations."
In addition to the merger guidelines, officials covered a range of other topics. Philip Weiser, deputy assistant attorney general for international, policy and appellate matters, described a partnership announced in August between the departments of Justice and Agriculture to investigate competition in the dairy industry and other agricultural markets. Workshops on the issue will be held in 2010, he said.
Kenneth Heyer, economics director at the Antitrust Division, touched on how the agencies get the intelligence that leads them to launch an investigation. "More times than not, it comes from a related investigation," he said. The Microsoft case, he recalled, originally began at the FTC with the question of whether Microsoft and IBM were colluding on the development of Windows.
FTC lawyers made a few calls, he said, "And when people on the other end stopped laughing, they said, 'While I've got you on the line, there are some other things about Microsoft I'd like to talk to you about.' "