Appendix 37. Antitrust Division Policy Guide to Merger Remedies

Pages736-777
APPENDIX 37 37-1
Antitrust Division Policy Guide to Merger
Remedies
TABLE OF CONTENTS
I. Overview..................................................................................... 3
II. Guiding Principles....................................................................... 4
III. Fashioning the Remedy............................................................... 8
A. Structural Remedies Are Preferred ..................................9
B. A Divestiture Must Include All Assets Necessary for
the Purchaser To Be an Effective, Long-Term
Competitor .....................................................................10
C. Divestiture of an Existing Business Entity Is
Preferred......................................................................... 12
D. The Merged Firm Must Divest Rights to Critical
Intangible Assets............................................................ 15
E. Conduct Relief Is Appropriate Only in Limited
Circumstances................................................................ 18
IV. Implementing the Remedy........................................................ 25
A. A Fix-It-First Remedy Is Acceptable If It Eliminates
The Competitive Harm .................................................. 25
B. A Hold Separate Provision Is a Necessary Component
of Most Consent Decrees............................................... 27
C. The Divestiture Should Be Accomplished Quickly....... 28
D. The Antitrust Division Must Approve Any Proposed
Purchaser........................................................................ 29
E. A Successful Divestiture Does Not Depend on the
Price Paid for the Divestiture Assets.............................. 31
37-2 APPENDIX 37
F. Restraints on the Resale of Divestiture Assets Will
Ordinarily Not Be Permitted.......................................... 32
G. Seller Financing of Divestiture Assets Is Strongly
Disfavored...................................................................... 33
H. Crown Jewel Provisions Are Strongly Disfavored ........34
I. Selling Trustee Provisions Will Ordinarily Be
Included in Consent Decrees ......................................... 35
V. Consent Decree Compliance and Enforcement......................... 38
A. The Consent Decree Must Bind The Entities Against
Which Enforcement May Be Sought........................... 38
B. The Consent Decree Must Provide a Means to
Investigate Compliance ............................................... 39
C. The Antitrust Division Will Ensure that Remedies
Are Fully Implemented................................................ 39
D. The Antitrust Division Will Enforce Consent
Decrees ......................................................................... 40
APPENDIX 37 37-3
I. Overview
The Antitrust Division is authorized to challenge acquisitions and
mergers (“mergers”) under Section 15 of the Clayton Act, 15 U.S.C. §
25, and Section 4 of the Sherman Act, 15 U.S.C. § 4. If the Division has
concluded that a merger may substantially lessen competition, it can
“fix” the problem in several ways. The Division may seek a full-stop
injunction that would prevent the parties from consummating the
transaction. The Division may choose, instead, to negotiate a settlement
(a consent decree) or accept a “fix-it-first” remedy that allows the merger
to proceed with modifications that restore or preserve the competition.1
The purpose of this Guide is to provide Antitrust Division attorneys
and economists with a framework for fashioning and implementing
appropriate relief short of a full-stop injunction in merger cases. The
Guide focuses on the remedies available to the Division and is designed
to ensure that those remedies are based on sound legal and economic
principles and are closely related to the identified competitive harm. The
Guide also sets forth policy issues that may arise in connection with
different types of relief and offers Division attorneys and economists
guidance on how to resolve them.
This Guide is a policy document, not a practice handbook. It is not a
compendium of decree provisions, and it does not list or give “best
practices” or the particular language or provisions that should be
included in any given decree. Rather, it sets forth the policy
considerations that should guide Division attorneys and economists when
fashioning remedies for anticompetitive mergers. The Guide is intended
to provide Division attorneys and economists with the tools they need -
the pertinent economic and legal principles, appropriate analytical
framework, and relevant legal limitations - to craft and implement the
proper remedy for the case at hand.
1. A consent decree is a binding agreement between the Division and
defendants that is filed publicly in federal district court and, upon entry,
becomes a binding court order. With a fix-it-first remedy, in contrast, the
parties modify or “fix” the transaction before consummation to eliminate
any competitive concern. There is no complaint or other court filing.
Although a fix-it-first remedy technically preserves, rather than restores,
competition, this Guide uses the terms restore and preserve interchangeably.
See infra Section IV.A.

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