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FTC Reinstates Prior Approval Requirement for Companies With Previous Antitrust Violations

  • The Federal Trade Commission (“FTC”), in a 3-2 vote, rescinded a 1995 policy statement that had hindered the FTC’s ability to address anticompetitive mergers and acquisitions.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.