Actual Potential Entrants, Emerging Competitors, and the Merger Guidelines : Examples from FTC Enforcement 1993-2022

The Department of Justice and Federal Trade Commission are considering changes to the Horizontal and Vertical Merger Guidelines and have asked whether the current guidelines “underemphasize or neglect … potential competition.” Whether potential competition is underemphasized in the merger guidelines is a subjective question, but the FTC’s merger enforcement record of the past three decades illustrates the scope of the merger guidelines application to transactions that may eliminate an actual potential entrant or will create or strengthen a merged entity’s ability or incentive to exclude an actual potential entrant from a relevant market. After a short history of the development of the potential competition doctrine, in law and in the merger guidelines, this paper collects examples of the FTC’s potential competition merger enforcement record to inform discussion on whether, and if so, how, the merger guidelines might be revised. This review of the FTC’s enforcement record should also inform Congress’s future consideration of whether legislation to revise or supplement the Sherman Act, Clayton Act or FTC Act is necessary for the antitrust agencies to successfully challenge mergers that eliminate or affect potential or nascent competitors