July 30, 2021

FTC Reinstates Prior Approval Requirement For Companies With Previous Antitrust Violations

Lori Kalani, Bernard Nash

Cozen O'Connor

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Cozen O'Connor

The Federal Trade Commission (“FTC”), in a 3-2 vote, rescinded a 1995 policy statement that had hindered the FTC’s ability to address anticompetitive mergers and acquisitions. Before the 1995 policy statement, the FTC’s long-standing practice required all companies that had been found by the FTC to violate antitrust laws in a previous merger to obtain prior approval from the FTC for any future transaction involving the same product and geographic market for which a violation had been alleged.
The 1995 Policy Statement on Prior Approval and Prior Notice Provisions required companies that had been found by the FTC to violate antitrust laws in a previous merger to provide prior notice and seek prior approval only where there was a credible risk of an unlawful merger, regardless of market conditions or a company’s prior activity. According to the FTC, this resulted in companies repeatedly proposing the same or similar deals in the same market, despite earlier FTC determinations that such deals were problematic.
The policy reversal is intended to conserve FTC resources by allowing it to block some anticompetitive deals without having to initiate new investigations and lawsuits.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.