FTC Rescinds Vertical Merger Guidelines

An experienced digital media attorney, Hayley Lattman (Hayley Geftman-Gold) began her legal career as an associate at Willkie Farr and Gallagher, LLP and Venture Law Group before joining MTV Networks as vice president of business and legal affairs. As a lawyer, Hayley Lattman is experienced in advertising and marketing law, including agreements between businesses and ad agencies, as well as content evaluation for FCC and FTC compliance.

The Federal Trade Commission (FTC) voted 3-2 to remove support for the Vertical Merger Guidelines which the FTC and the US Department of Justice's (DOJ) Antitrust Division jointly adopted. The Vertical Merger Guidelines are intended to provide parties with insight into how the Federal Trade Commission and the Department of Justice evaluate vertical mergers of enterprises or assets. The Vertical Merger Guidelines were established in June 2020 on a party-line vote, along with the three Republican Commissioners and the then-Republican-led DOJ backing them against the intense opposition of the two Democratic Commissioners.

The Democratic Commissioners explained in their majority statement that The Federal Trade Commission has revoked its approval of the Vertical Merger Guidelines “to prevent further industry or judicial reliance on certain flawed provisions,” particularly those concerning the “purported procompetitive benefits (i.e., efficiencies) of vertical mergers” and EDM treatment. The FTC and the DOJ may have divergent standards on vertical mergers, since DOJ Acting Assistant Attorney General Richard A. Powers stated shortly after the FTC's vote that, while the Department is examining the Vertical Merger Guidelines, they are still in effect at the DOJ.

Depending on which entity reviews their deal, merging parties may undergo a different sort of vertical merger analysis. The FTC may be less inclined to clear or settle vertical agreements quickly in the future.