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
OpenAI CEO Sam Altman speaks to members of the media as he arrives at a lodge for the Allen & Co. Sun Valley Conference on July 8, 2025 in Sun Valley, Idaho.
Kevin Dietsch | Getty Images News | Getty Images
OpenAI said Wednesday that it expects to use Google’s cloud infrastructure for its popular ChatGPT artificial intelligence assistant.
The reach for additional capacity aligns with OpenAI’s desire for more computing power to meet heavy demand after initially relying exclusively on Microsoft for cloud capacity. The two companies’ relations have evolved since then, with Microsoft naming OpenAI as a competitor last year.
Both companies sell AI tools for developers and offer subscriptions to companies.
OpenAI has added Google to a list of suppliers, specifying that ChatGPT and its application programming interface will use the Google Cloud Platform, as well as Microsoft, CoreWeave and Oracle.
The announcement amounts to a win for Google, whose cloud unit is younger and smaller than Amazon‘s and Microsoft‘s. Google also has cloud business with Anthropic, which was established by former OpenAI executives.
The Google infrastructure will run in the U.S., Japan, the Netherlands, Norway and the United Kingdom.
Last year, Oracle announced that it was partnering with Microsoft and OpenAl “to extend the Microsoft Azure Al platform to Oracle Cloud Infrastructure” to give OpenAI additional computing power. In March, OpenAI committed to a cloud agreement with CoreWeave in a five-year deal worth nearly $12 billion.
Microsoft said in January that it had agreed to move to a model of providing the right of first refusal anytime OpenAI needs more computing resources, rather than being its exclusive vendor across the board. Microsoft continues to hold the exclusive on OpenAI’s programming interfaces.
Sam Altman, OpenAI’s co-founder and CEO, said in April that the startup, which draws on Nvidia graphics processing units to power its large language models, was facing capacity constraints.
“if anyone has GPU capacity in 100k chunks we can get asap please call!” he wrote in an X post at the time.
Reuters reported in June that OpenAI was planning to bring on cloud capacity from Google.
WATCH: ChatGPT’s growth has been unassailed and looks set to continue: Altimeter’s Apoorv Agrawal
Technology
Tesla’s change in bylaws to limit shareholder lawsuits slammed by New York state officials
Elon Musk interviews on CNBC from the Tesla Headquarters in Texas.
CNBC
In May, Tesla changed its corporate bylaws in a way that would require investors to own 3% of the stock, today worth about $30 billion, in order to file a derivative lawsuit against the company for breach of fiduciary duties. Authorities in New York State are now asking Tesla to delete the bylaw entirely.
Overseers of the New York State Common Retirement Fund, which owns about 0.1% of Tesla’s shares, submitted a formal proxy proposal and letter to the company on July 11, and shared it with CNBC on Wednesday. They say that Elon Musk’s automaker engaged in a “bait-and-switch” to convince shareholders to approve an incorporation move from Delaware to Texas in June 2024.
Musk made the move after a judge in Delaware voided the $56 billion pay package that the CEO, also the world’s richest person, was granted by Tesla in 2018, the largest compensation plan in public company history. In getting shareholders to approve the change in its state of incorporation, Tesla said that stakeholders’ rights “are substantially equivalent” under the laws of Delaware and Texas.
On May 14, almost a year after Tesla’s move, Texas changed its law to allow corporations in the state to require 3% ownership before being able to carry forth a shareholder derivative suit.
“The very next day, Tesla’s board amended the Company’s bylaws to the maximum allowable 3% ownership threshold, effectively insulating the Company’s directors and officers from accountability to shareholders,” the New York letter says. The letter was signed by Gianna McCarthy, a director of corporate governance with the retirement fund, on behalf of the fund and New York State Comptroller Thomas DiNapoli.
Only three institutions currently own at least 3% of Tesla’s outstanding shares.
Tesla didn’t immediately respond to a request for comment.
The New York fund overseers wrote that derivative actions are “the last resort for shareholders to enforce their rights” when company directors or officers violate their fiduciary obligations, and called Tesla’s decision on the matter “egregious.”
In an email to CNBC, DiNapoli said Tesla “deceived shareholders” in assuring them that their rights would remain the same in Texas.
“These actions violate basic tenets of good corporate governance and must be reversed,” he wrote.
WATCH: What to know about the renewed executive churn under Elon Musk
Technology
Peter Thiel just bought a big stake in Tom Lee’s ether company and the shares are surging
Peter Thiel, president and founder of Clarium Capital Management LLC, holds hundred dollars bills as he speaks during the Bitcoin 2022 conference in Miami, Florida, U.S., on Thursday, April 7, 2022.
Eva Marie Uzcategui | Bloomberg | Getty Images
Bitmine (BMNR) 1-month
The current wave of interest in Ethereum and related assets follows an announcement by Robinhood that it will enable trading of tokenized U.S. stocks and ETFs across Europe, and a groundswell of interest in stablecoins throughout June following Circle’s wildly successful IPO and ongoing progress in Congress on the Senate’s proposed stablecoin bill, the GENIUS Act.
The price of ether itself also continued its rally, up more than 4% Wednesday. The coin has doubled in price in the past three months.
Thiel is a venture capitalist and hedge fund manager best known as a cofounder of both PayPal and Palantir and an early investor in Facebook. Founders Fund was an investor in Tagomi, the crypto brokerage acquired by Coinbase in 2020, and Polymarket, the prediction market built on Ethereum.
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