FTC and DOJ lay out new rules for merger review to reflect a digital economy
The Federal Trade Commission and the Department of Justice Antitrust Division announced on Wednesday new long-awaited guidelines on how they will enforce merger law.
The new guidelines, currently in draft form, encapsulate the agencies’ push to keep pace with the digital age and a changing market. The proposed rules apply to both vertical and horizontal mergers. Almost two years ago, the FTC voted to withdraw the previous version of the vertical merger guidelines released in 2020, citing flaws.
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A vertical merger is a transaction between two businesses that are often in different parts of the supply chain in an industry, according to the FTC. Horizontal mergers, by contrast, involve companies that compete or are in a similar part of the market.
Microsoft’s proposed $68.7 billion purchase of Activision Blizzard is an example of a vertical merger, because Microsoft distributes games through its Xbox consoles and streaming services, while Activision creates the games. The FTC challenged that deal, arguing that it was anticompetitive, but a court last week declined to grant the regulator’s request to stop it.
The FTC, under Chair Lina Khan, has been more aggressive in attempting to block Big Tech companies from expanding further, while the DOJ Antitrust Division, led by Assistant Attorney General Jonathan Kanter, has also stepped up its activity.
Both agencies have stressed the importance of updating enforcement efforts to reflect a modernized economy even if that means losing more cases.
In the new guidelines, they outlined 13 points they will use to evaluate whether a merger should be blocked:
1. Mergers should not significantly increase concentration in highly concentrated markets.
2. Mergers should not eliminate substantial competition between firms.
3. Mergers should not increase the risk of coordination.
4. Mergers should not eliminate a potential entrant in a concentrated market.
5. Mergers should not substantially lessen competition by creating a firm that controls products or services that its rivals may use to compete.
6. Vertical mergers should not create market structures that foreclose competition.
7. Mergers should not entrench or extend a dominant position.
8. Mergers should not further a trend toward concentration.
9. When a merger is part of a series of multiple acquisitions, the agencies may examine the whole series.
10. When a merger involves a multi-sided platform, the agencies examine competition between platforms, on a platform, or to displace a platform.
11. When a merger involves competing buyers, the agencies examine whether it may substantially lessen competition for workers or other sellers.
12. When an acquisition involves partial ownership or minority interests, the agencies examine its impact on competition.
13. Mergers should not otherwise substantially lessen competition or tend to create a monopoly.
The 2020 guidelines did not explicitly discuss the impact on competition for workers. The new language also appears to address issues related to multi-sided platforms like Amazon that serve consumers and businesses.
The agencies may broaden the types of deals they review, potentially looking at a series of deals rather than a single merger. The FTC has already started down that path, suing Facebook parent Meta in 2020 based on a number of acquisitions of small rivals like Instagram and WhatsApp as a strategy to maintain its alleged monopoly power.
A senior FTC official told reporters in a briefing on Tuesday that the guidelines should give judges the clarity they’ve requested in the past when it comes to merger law, a matter of particular importance to judges who rarely encounter antitrust cases.
The FTC said in 2021 that it would work on new guidelines with the DOJ, after voting to withdraw the most recent iteration. The then-Democratic majority said the 2020 guidelines “adopted a particularly flawed economic theory regarding purported pro-competitive benefits of mergers, despite having no basis of support in the law or market reality,” according to a press release at the time.
In the nearly two years since those guidelines were scrapped, agency staffers have faced frequent questions about when a new set of rules would be available.
On the call with reporters, the FTC official and a senior DOJ official said the guidelines reflect their updated approach to enforcing merger law, emphasizing the law itself has not changed. They said the agencies assessed the more than 5,000 comments they received when embarking on the project.
The public has until Sept. 18 to submit comment on the draft guidelines. The agencies will then review those comments as they consider revisions ahead of final publication.
Once they’re finalized, the longevity of the new guidelines could depend on political power dynamics after the next presidential election in 2024. After all, the FTC voted to withdraw the last version of the guidelines just over a year after they were officially released.
WATCH: FTC court ruling shows why vertical deals are hard to challenge
Technology
Dan Ives to become chair of company that will buy Sam Altman-backed Worldcoin for its treasury
Shares of advertising technology company AppLovin and stock trading app Robinhood Markets each jumped about 7% in extended trading on Friday after S&P Global said the two will join the S&P 500 index.
The changes will go into effect before the beginning of trading on Sept. 22, S&P Global announced in a statement. AppLovin will replace MarketAxess Holdings, while Robinhood will take the place of Caesars Entertainment.
In March, short-seller Fuzzy Panda Research advised the committee for the large-cap U.S. index to keep AppLovin from becoming a constituent. AppLovin shares dropped 15% in December, when the committee picked Workday to join the S&P 500. Robinhood, for its part, saw shares slip 2% in June when it was excluded from a quarterly rebalancing of the index.
The S&P 500 already has a heavy concentration of large technology companies. Datadog and DoorDash entered earlier this year.
It’s normal for stocks to go up on news of their inclusion in a major index such as the S&P 500. Fund managers need to buy shares to reflect the updates.
AppLovin and Robinhood both went public on Nasdaq in 2021.
Robinhood has been a favorite among retail investors who have bid up shares of meme stocks such as AMC Entertainment and GameStop.
AppLovin itself became a stock to watch, with shares gaining 278% in 2023 and over 700% in 2024. As of Friday’s close, the stock had gained only 51% so far in 2025. AppLovin’s software brings targeted ads to mobile apps and games.
Earlier this year, AppLovin offered to buy the U.S. TikTok business from China’s ByteDance. U.S. President Donald Trump has repeatedly extended the deadline for a sale, most recently in June.
At Robinhood’s annual general meeting in June, a shareholder asked Vlad Tenev, the company’s co-founder and CEO, if there were plans for getting into the S&P 500.
“It’s a difficult thing to plan for,” Tenev said. “I think it’s one of those things that hopefully happens.”
He said he believed the company was eligible.
Shares of MarketAxess, which specializes in fixed-income trading, have fallen 17% year to date, while shares of Caesars, which runs hotels and casinos, are down 21%.
AppLovin and Robinhood ytd stock chart.
U.S. Federal Trade Commission Commissioner Rebecca Slaughter raised questions on Friday about the status of an artificial intelligence chatbot complaint against Snap that the agency referred to the Department of Justice earlier this year.
In January, the FTC announced that it would refer a non-public complaint regarding allegations that Snap’s My AI chatbot posed potential “risks and harms” to young users and said it would refer the suit to the DOJ “in the public interest.”
“We don’t know what has happened to that complaint,” Slaughter said on CNBC’s ‘The Exchange.” “The public does not know what has happened to that complaint, and that’s the kind of thing that I think people deserve answers on.”
Snap’s My AI chatbot, which debuted in 2023, is powered by large language models from OpenAI and Google and has drawn scrutiny for problematic responses.
The DOJ did not immediately respond to a request for comment. Snap declined to comment.
Slaugther’s comments came a day after President Donald Trump held a White House dinner with several tech executives, including Google CEO Sundar Pichai, Meta CEO Mark Zuckerberg and Apple CEO Tim Cook.
“The president is hosting Big Tech CEOs in the White House even as we’re reading about truly horrifying reports of chatbots engaging with small children,” she said.
Trump has been attempting to remove Slaughter from her FTC position, but earlier this week, U.S. appeals court allowed her to maintain her role.
On Thursday, the president asked the Supreme Court to allow him to fire her from the post.
FTC Chair Andrew Ferguson, who was selected by Trump to lead the commission, publicly opposed the complaint against Snap in January, prior to succeeding Lina Khan at the helm.
At the time, he said he would “release a more detailed statement about this affront to the Constitution and the rule of law” if the DOJ were to eventually file a complaint.
WATCH: FTC Commissioner Rebecca Slaughter on President Trump’s latest attempt to fire her.
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