Chapter III. Governmental Regulation of Joint Ventures

• Pages: 29-39

CHAPTER III

GOVERNMENTAL REGULATION

OF JOINT VENTURES

29

A. AGENCY GUIDELINES

1. Horizontal Merger Guidelines

The FTC and the DOJ jointly issued their Horizontal Merger

Guidelines1 in 1992, and then amended them in 1997, to elaborate on the

agencies’ approach to the evaluation of efficiencies claims.2 As noted

above, a competitor collaboration will be analyzed under Section 7 of the

Clayton Act and the Horizontal Merger Guidelines where the participants

are competitors in a relevant market, the collaboration involves an

efficiency-enhancing integration of economic activity that eliminates all

competition among the participants in that market, and the collaboration

does not terminate within a sufficiently limited period by its own specific

and express terms.3 The Merger Guidelines provide detail to the

balancing of potential anticompetitive effects against potential

efficiencies required by Section 7, which is required “to answer the

ultimate inquiry in merger analysis: whether the merger is likely to create

or enhance market power or to facilitate its exercise.”4

Pursuant to the Merger Guidelines, the agencies first define the

relevant market and then assess “whether the merger would significantly

increase concentration and result in a concentrated market.” Based on

that determination and “other factors that characterize the market,” the

agencies next assess whether the merger “raises concern about potential

1 U.S. Dep’t of Justice & Federal Trade Comm’n, Horizontal Merger

Guidelines (1992), reprinted in 4 Trade Reg. Rep. (CCH) ¶ 13,104 (Apr. 8,

1997).

2 U.S. Dep’t of Justice & Federal Trade Comm’n, Revision to Section 4 of

Horizontal Merger Guidelines (1997), reprinted in 72 Antitrust & Trade

Reg. Rep. (BNA) 359 (Apr. 10, 1997).

3 See, e.g., U.S. Dep’t of Justice and Federal Trade Comm’n, Antitrust

Guidelines for Collaborations Among Competitors § 1.3, reprinted in 4

Trade Reg. Rep. (CCH) ¶ 13,161 (Apr. 12, 2000) [hereinafter Collaboration

Guidelines].

4 Merger Guidelines, supra note 1, § 0.2.