Justice Department Issues Modernized Merger Remedies Manual
Merger Remedies Manual Reaffirms Antitrust Division’s Commitment to Effective Structural Relief and Reflects Renewed Focus on Enforcing Consent Decree Obligations
The Department of Justice issued today the Merger Remedies Manual, which provides a framework for the Antitrust Division to structure and implement appropriate relief that preserves competition in merger cases. The Merger Remedies Manual updates the Antitrust Division’s 2004 Policy Guide to Merger Remedies.
“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,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division. “It will provide greater transparency and predictability regarding the Division’s approach to remedying a proposed merger’s competitive harm.”
The Merger Remedies Manual is the first revision of the Antitrust Division’s remedies manual in nearly a decade and reflects important changes in the merger landscape over that time. The modernized document includes new sections explaining the approach that the division takes with consummated transactions and upfront buyers. In addition, the Merger Remedies Manual outlines certain “red flags” that in the division’s experience increase the risk that a remedy will not preserve competition effectively. Finally, the manual reflects important principles implemented in recent Antitrust Division consent decrees, such as when it may be appropriate to name the divestiture buyer as a party to the consent decree or when it may be appropriate that the divestiture include assets beyond the overlapping relevant markets.
The manual reflects the key elements of the Division’s approach to merger remedies.
Commitment to Effective Structural Relief. The Merger Remedies Manual emphasizes that structural remedies are strongly preferred in horizontal and vertical merger cases because they are clean and certain, effective, and avoid ongoing government regulation of the market. The manual also describes the limited circumstances in which conduct remedies may be appropriate: (1) to facilitate structural relief, or (2) if there are significant efficiencies that would be lost through a structural divestiture, if the conduct remedy would completely cure the competitive harm, and if it can be enforced effectively.
Renewed Focus on Enforcing Consent Decree Obligations. The principles outlined in the Merger Remedies Manual describe how the Antitrust Division will ensure that consent decrees are fully implemented. The manual describes several standard consent decree provisions designed to improve the effectiveness of consent decrees and the Antitrust Division’s ability to enforce them. In addition, the Manual highlights the role of the newly created Office of Decree Enforcement and Compliance, which oversees the Antitrust Division’s decree compliance efforts.
The Merger Remedies Manual also outlines the following key principles that apply to structuring and implementing remedies in all the Antitrust Division’s merger cases, both horizontal and vertical:
- Remedies must preserve competition.
- Remedies should not create ongoing government regulation of the market.
- Temporary relief should not be used to remedy persistent competitive harm.
- The remedy should preserve competition, not protect competitors.
- The risk of a failed remedy should fall on the merging parties, not on consumers.
- The remedy must be enforceable.
The Merger Remedies Manual is the culmination of a process first announced by Assistant Attorney General Delrahim in September 2018, when the division withdrew the 2011 Policy Guide to Merger Remedies and announced that the 2004 Policy Guide to Merger Remedies would be in effect pending the release of an updated policy.