The article explores the impact of new Hart-Scott-Rodino rules on merger reviews, emphasizing their focus on protecting competition in Future Markets. It highlights how the Fifth Circuit’s decision in Illumina v. FTC empowered enforcers by affirming their authority under the Clayton Act to regulate competition in markets for products that do not yet exist. These new rules require merging parties to disclose extensive information on “known planned products.”
These products compete in Future Markets, markets for products which do not exist yet. The article examines how enforcement priorities may vary across administrations but asserts that both Republican and Democratic enforcers will act when necessary to safeguard competition in Future Markets. It explains the Future Markets Model – a framework for analyzing these markets. The article also discusses the complexities of applying the model under ambiguous scenarios, such as nascent competition and roll-up strategies.
The piece also addresses procedural challenges, including increased compliance burdens and the potential for ambiguity in interpreting the new requirements. It advocates for strategic planning by merging parties, suggesting that clear, well-prepared documentation and white papers can help demonstrate the procompetitive nature of transactions and avoid second requests. Ultimately, the article underscores the heightened attention regulators will pay to innovation-driven markets and urges parties to proactively align with the new rules to ensure regulatory clearance.
