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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.

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