FTC Reasserts “Prior Approval” Policy for Future Acquisitions
Antitrust and Competition Law Alert® | November 4, 2021
The Federal Trade Commission has reasserted a policy previously abandoned in 1995 to seek to include “prior approval” obligations in merger consent decrees. Prior approval provisions require companies to seek the FTC’s approval before closing certain future deals. Unlike merger reviews under the Hart-Scott-Rodino Act and Section 7 of the Clayton Act, an investigation pursuant to a prior approval obligation lacks any statutory timeframe or substantive standard governing whether the transaction will be cleared and when. Parties contemplating mergers likely to be subject to antitrust scrutiny should be mindful that consent decrees with the FTC may now directly restrict their ability to pursue future deals in the same or similar markets. The FTC vote to reinstate its prior approval policy was 3-2, with the Republican Commissioners issuing a strong dissent.
Additional informationView File
This communication is for general information only. It is not intended, nor should it be relied upon, as legal advice. In some jurisdictions, this may be considered attorney advertising. Please refer to the firm’s data policy page for further information.