PRACTICAL CHALLENGES CONFRONTING MERGER REVIEWS OF LABOR MARKETS
Written by Joshua Holian and Nitesh Daryanani1
Section 7 of the Clayton Act ("Section 7") prohibits mergers and acquisitions that are substantially likely to lessen competition, or that tend to create a monopoly.2
When reviewing mergers for potential Section 7 violations, the United States Department of Justice’s Antitrust Division ("DOJ") and the Federal Trade Commission ("FTC," and collectively, the "Agencies") historically have focused their analyses on the probable effects that the merger in question will have on consumer welfare. Through decades of case law and enforcement practice, the Agencies have established a relatively well-understood path for connecting product market concentration to anticompetitive effects thatâunder the right conditionsâwould negatively impact consumers with higher prices, reduced quality, or lower investments in innovation. The precise boundaries of when a specific merger is substantially likely to lessen competition will of course be heavily contested in any given merger review, but the analytical frames (and areas for debate) are relatively well defined.