Kosturi Ghosh
Trilegal, Bengaluru, Bangalore
kosturi.ghosh@trilegal.com

Report on a session of the IBA Corporate and M&A Law Committee at the 19th Annual International Mergers and Acquisitions Conference in New York

Wednesday 15 June 2022

Moderators

Ilene Knable Gotts Wachtell Lipton Rosen & Katz, New York

Antonio Guerra Fernandez Uria Menéndez, Madrid

Speakers

Guillaume Loriot Deputy Director-General, Directorate-General Competition, European Commission, Brussels

Colin Raftery Senior Director of Mergers, Competition and Markets Authority, London

Christine Wilson Commissioner, Federal Trade Commission, Washington, DC

The panelists, comprising Guillaume Loriot from the European Commission, Colin Raftery from the Competition and Markets Authority (CMA), and Christine Wilson from the Federal Trade Commission (FTC), discussed significant trends in antitrust/competition enforcement and the changing policies driving the actions.

The European Commission

Loriot explained that the European Commission reviews about 400 deals a year and is now (post-Covid-19) more rigid on market concentration, and there is a greater focus on the sectors of digital transformation, biotech and healthcare.

In general, remedies have been sufficient to alleviate concerns unless the remedies are too complicated to oversee, in which case, deals have been blocked. The European Commission has taken an 'open' stance with regard to the application process, being available to discuss and engage with the applicants even at an early stage. Since the European Commission can reach out to customers, stakeholders and gather market knowledge, the remedies are tailored, and they try to find global solutions with other regulators. Loriot was quite clear in stating that the European Commission will not hesitate to block a deal.

The CMA

The CMA, which reviews merger control in the United Kingdom, works closely with the European Commission. While the regime is voluntary in nature for merger control, the CMA has the ability to call for information four months after a transaction closes. Raftery noted that it will always proactively notify. In the recent life of the CMA, certain trends have become noteworthy – an uptick in enforcement actions, an increased level of scrutiny and more phase 2 investigations. Fifty-seven per cent of the cases needed remedies of some kind. While there was no change on the basis of review, the CMA, in a similar way to the European Commission, has found that the problem of market concentration has become the most common reason for their giving attention to deals.

While the regulator doesn't rule out the possibility of coordinating reviews with other regulators, the CMA believes that this isn't always possible given the different rules and different processes for assessment, and the way the decision makers operate and analyse a transaction.

The FTC

By far the more aggressive of the regulators, the FTC has the newly appointed Lila Khan at the helm, who described the existing regime as 'lacking and feckless'. Khan has sent a rather strong message to businesses. Wilson however stressed that antitrust matters have largely remained consistent in terms of enforcement action under this and the previous administration. She did though remark that the approach of the FTC had changed. There was a clear expectation of 'fix it first' before an application is reviewed by the FTC and she impressed on the audience that applicants need to build this into their strategy. The FTC has also introduced the concept of a fair warning letter, which may be sent to the applicants during the waiting period. Wilson explained to the audience that new merger guidelines, which were up for review from the public, would focus on competitors and not competition itself and would take into account labour concerns along with consumer concerns. Another interesting departure from existing policy is the lack of settlement as a strategy, meaning that litigation would be the only option.

The session ended with all regulators agreeing that proactive solutions is what they want, because proactive engagement is what they offer.