THE RISKS OF REQUIRING CALIFORNIA-SPECIFIC MERGER APPROVALS

By Sarah Melanson and Megan Yeates¹

This article is submitted in response to the California Law Revision Commission’s (CLRC) study of certain aspects of California’s antitrust law under Assembly Concurrent Resolution No.95.² This article is specifically focused on the question of "whether California should be directly involved in the approval of mergers and acquisitions."³ For completeness, and as noted in the First Supplement to Memorandum 2022-50, the current federal pre-merger review process under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act) "is not technically an ‘approval’ process, because there is no legal requirement that the [Federal Trade Commission (FTC)] formally approve mergers before they can occur. Instead, after completing its review of a proposed merger that is subject to review, the FTC will either decline to take further action, negotiate a consent decree to avoid anticompetitive effects, or initiate legal action to challenge the merger. Further, . . . states can also challenge a merger or acquisition, even if the FTC declines to do so."⁴ In line with the approach suggested in the First Supplement to Memorandum 2022-50, this article "read[s] the language [of the CLRC resolution] broadly, as encompassing a range of reform possibilities"⁵ and therefore considers broadly whether modifications to the existing merger review regime or any form of premerger notification regime should be introduced in California.

Merger control requires a delicate balance. Merger control broadly seeks to prevent a subset of acquisitions that threaten to substantially lessen competition or create a monopoly.⁶ Any reforms to merger control must be carefully considered so as not to impose unnecessary and inefficiency-creating burdens on all businesses. These burdens can discourage businesses from pursuing acquisitions that are welfare-enhancing, leaving consumers worse off and undermining the overall dynamism and innovation of business.

This article will first outline the existing merger control processes in place in the US that already allow federal and state governments to review and investigate mergers, including mergers falling below premerger notification thresholds and / or where local effects are relevant to the assessment.

Secondly, this article will highlight the significant additional costs of introducing any form of state-specific premerger review. Costs range

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from additional private costs on businesses as a result of the burden of an additional regulatory requirement to the public cost imposed on the state from modifying California’s laws and administering the premerger review process. The burden on businesses is exacerbated by the increasing costs, complexity, and uncertainty that already exist in merger review as a result of parallel review processes in the US and around the world. A separate California-specific merger control process could set a precedent within the US of an increasingly state-level approach to merger control review with additional negative costs for Californian businesses operating nationwide that must then navigate multiple potentially differing regimes, and "reduce" the overall attractiveness of the US for merger activity.

This article will argue that these costs are likely to significantly outweigh any plausible benefits to California. In particular, considering California’s existing ability to intervene or use federal laws to block mergers, the benefits to merger enforcement that a new California-specific merger control regime could provide would likely be significantly outweighed by its costs. If California were to introduce a more restrictive regime than already exists, the additional enforcement could discourage firms from operating or entering the California market with possible wider cost implications for the Californian economy.

Finally, the article will highlight the importance of deal certainty in the context of innovation and start-up industries to support the ongoing vibrancy and dynamism of the Californian economy. This article therefore submits that there is no basis on which to extend the scope of California’s ability to review mergers beyond the existing legal framework or to introduce a new premerger regime in California.

I. EXISTING EXAMPLES OF LEGISLATION OR LEGISLATIVE PROPOSALS RELATING TO MERGER REVIEW

A. PREVIOUS LEGISLATIVE PROPOSALS IN CALIFORNIA RELATING TO MERGER REVIEW

California does not currently have in place any broad premerger notification regime. Companies are therefore under no obligation to report or file transactions specifically in California. There are limited exceptions applicable in only specific circumstances, which require parties to give written notice to, or obtain written consent from, the California Attorney General (AG) or other specific regulators prior to completing a transaction.⁷ These exceptions arise in the context of transactions involving non-profits⁸ or regulated industries including healthcare,⁹ public utilities¹⁰or insurance.¹¹ The justifications underlying this specific statutory review power can be distinguished from justifications for a broader state-specific premerger notification regime as there are unique considerations that feed into non-profit transactions or transactions in these already highly regulated industries that differ from the considerations in "transactions involving" for-profit or other companies.

Within the context of the pandemic, two specific proposals relating to mergers and consolidations in the healthcare sector were introduced in the California State Assembly (Assembly) but ultimately both proposals were unsuccessful and have not been passed. The first proposed rule change was SB-977¹² introduced during the 2019-2020 legislative session. The proposal would have required health care systems, private equity groups, or hedge funds to receive approval from the California AG before conducting a change of control or acquisition over a healthcare facility or provider. The California AG could deny these transactions unless the health care system, private equity firm, or hedge fund could prove it would lead to "a substantial likelihood of clinical integration, . . . increasing or maintaining the availability and access of services to an underserved population, or both."¹³ In addition, if those benefits

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were outweighed by "a substantial likelihood of anticompetitive effects" such as higher prices or lower quality, the California AG could deny the combination.¹⁴ A second bill AB-2080,¹⁵ which appears to be a recreation of SB-977, was introduced in the Assembly during the 2021-2022 legislative session with similar proposals that "would [have] require[d] a medical group, hospital or hospital system, specified health facility, health care service plan, health insurer, or pharmacy benefit manager to provide written notice to the Attorney General . . . before entering an agreement or transaction to make a specified material change with a value of $15,000,000 or more."¹⁶ When assessing whether to consent to the transaction, the California AG could consider "[w]hether or not the proposed material change may have a significant impact on market competition or costs for payers, purchasers, or consumers," among other factors.¹⁷

These proposals were driven by specific concerns surrounding the healthcare industry which, particularly in the context of SB-977, were directly related to the COVID-19 pandemic.¹⁸However, a number of the concerns raised by third parties in the context of these proposals would similarly apply to any broadly applicable premerger notification regime. The bills were subject to significant opposition including from the California Chamber of Commerce, United Hospital Association, the California Hospital Association,¹⁹the California Medical Association, Sutter Health, and Tenet Health, among others.²⁰ As highlighted in the opposition letter of the California Medical Association to SB-977, premerger review would add an additional burden on physicians and on the state budget that ultimately could have unintended negative effects on consumers and in this context ultimately "limiting access to care."²¹

B. SPECIFIC PREMERGER REVIEW PROPOSALS IN OTHER STATES

State-specific premerger regimes have been considered in other states. However, no US state has implemented a broad premerger notification regime.²²

Sector-specific premerger control regimes exist in Connecticut and Washington. Under both regimes, the states require parties to notify transactions to their respective state AGs of certain healthcare-related deals before the deal is closed.²³ States could use this information to investigate the transactions and potentially bring enforcement actions in court to prevent them. In both Connecticut and Washington, there is no minimum size-of-transaction threshold but the regime only applies to specific healthcare transactions.²⁴ Both regimes are therefore very limited in scope.

On June 7, 2021, the New York Senate passed a bill known as the "Twenty-First Century Anti-Trust Act" which, among other proposals, would have established a broad premerger notification regime.²⁵The bill has since stalled and not had the support required to be passed by the New York State Assembly and made into law.²⁶ The initial proposals included a broad premerger notification requirement for transactions meeting certain thresholds lower than the HSR Act thresholds, and where one of the parties had a defined minimum of sales or assets in New York.²⁷ Following significant criticism that the scope of the regime would have significantly burdened transacting parties and potentially inundated the New York AG’s Office, the bill was amended to simplify the premerger notification program.²⁸ Under the amended proposals, the bill provides that any entity "conducting business" in New York that is required to file an HSR notification would have to "provide the same notice and documentation in its entirety" to the New York AG in parallel to notifying the federal government under its premerger notification regime.²⁹ Even following amendments to the initial scope of the proposed new premerger regime, the creation of this parallel review process has been criticized strongly and seen as an unnecessary burden for the New York AG and transacting parties.³⁰ This is particularly the case given the duplicative nature of the requirement and the existing ability for coordination between State AGs and the Department of Justice (DOJ) / FTC (see further details below). In addition, if passed, these proposals could incentivize other states to impose similar duplicative requirements, which taken to its

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extreme could result in merging parties having to submit the same filings and documents in each US state at significant cost for businesses.

II. EXISTING MERGER CONTROL PROCESSES ALLOW STATES TO REVIEW TRANSACTIONS

Federal agencies and states already have the authority to review transactions under antitrust law. Federal statutes, including the Clayton Act, afford authority to federal and state enforcers to assess the competitive effects of proposed transactions and challenge transactions where necessary.

A. CURRENT FEDERAL LAW PROVIDES AUTHORITY FOR MERGER REVIEW EVEN AT THE STATE LEVEL

Federal and state authorities, as well as private parties, already have the ability to challenge transactions that are anticompetitive. Specifically, Section 7 of the Clayton Act generally prohibits acquisitions where "the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly."³¹ The DOJ, the FTC, state AGs, and private parties are all authorized under the Clayton Act to seek an injunction to prevent an acquisition that would substantially lessen competition or create a monopoly in violation of Section 7.³²

In addition to federal and state governments’ authority to enjoin acquisitions that would substantially lessen competition, parties to proposed transactions must provide information to the FTC and DOJ under the premerger notification program to assist the agencies in assessing the competitive effects of larger transactions under Section 7 before the transaction closes.³³ The HSR Act requires parties to transactions above defined thresholds to file notifications with the FTC and DOJ and not close the transaction until a waiting period has expired or been terminated.³⁴ The notification form requests information from the parties that will allow the agencies to conduct a preliminary antitrust evaluation. If the FTC or DOJ requires further information after reviewing the parties’ notifications, either agency can issue a "second request," which asks for information, data, and documents about the parties and the transaction.³⁵The FTC and DOJ have each historically issued second requests in approximately one percent of the transactions notified.³⁶

Even if a transaction falls below the HSR thresholds, the DOJ and FTC-as well as state AGs and private plaintiffs-are still able to challenge the deal under their Section 7 authority, regardless of whether the deal has already closed.³⁷ In addition to the Clayton Act, the California AG can challenge mergers under California’s Unfair Competition Law by basing it on an underlying Section 7 violation or as an "unfair . . . business act or practice."³⁸

Furthermore, other federal agencies have the authority to review transactions undertaken by or in relation to companies in the industries within their jurisdiction. For example, the Federal Communications Commission (FCC) has the authority to review communications transactions alongside the FTC and DOJ, by assessing whether a proposed transaction furthers "the public interest, convenience, and necessity."³⁹ The FCC exercised this authority in the Comcast/NBCU and AT&T/T-Mobile transactions.⁴⁰ Similarly, in the context of airline acquisitions, the US Department of Transportation (DOT) has the authority to review the transfer of international operating authority and ensure satisfaction of the US certificated air carrier requirements, as well as may consult the DOJ to provide its own competitive analysis.⁴¹ Pursuant to its authority, DOT is currently reviewing the proposed merger between JetBlue and Spirit.⁴²Along with the DOJ, several state AGs including in California are challenging JetBlue and Spirit’s proposed transaction.⁴³

B. EXISTING LAWS ALLOW FOR MERGER ASSESSMENTS AND CHALLENGES EVEN FROM STATE ENFORCERS

Even where federal agencies are investigating a proposed transaction, state AGs can and have used

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their authority to challenge transactions. Following the DOJ’s challenge of AT&T’s proposed acquisition of T-Mobile-a transaction also under the FCC’s review⁴⁴-seven state AGs joined the DOJ’s case.⁴⁵In response, the DOJ reportedly stated: "We have had an excellent working relationship with a number of state AGs and they have provided invaluable assistance throughout our investigation."⁴⁶ On that same transaction, several state AGs also voiced their support for AT&T’s acquisition in a letter to the DOJ and FCC.⁴⁷

State AGs have also used their authority even when their views diverge from federal agencies. Following its investigation of the proposed merger between T-Mobile and Sprint, the DOJ reached a settlement that addressed its competition concerns through a divestiture.⁴⁸ While five state AGs joined that settlement,⁴⁹ several other state AGs led by then-California AG Xavier Becerra and New York’s AG opposed the settlement and separately filed suit in federal court to enjoin the transaction.⁵⁰ Following the court’s decision to deny the states’ request for a permanent injunction, California and the other states settled with T-Mobile and Sprint to require certain commitments and recover costs.⁵¹

The degree of cooperation between state AGs and the federal antitrust enforcers is evidenced in the procedures established to facilitate their coordination. The DOJ and FTC have jointly published a protocol for coordination with state AGs on merger investigations. Those guidelines outline information sharing with the parties’ consent, joint strategy planning, and unified settlement discussions between the FTC/DOJ and state AGs.⁵²

III. OVERLAPPING PARALLEL PROCEEDINGS CREATE UNCERTAINTY, THE RISK OF DIVERGENT DECISIONS, AND INCREASED TRANSACTION COSTS

Introducing a premerger regime in California would result in significant private costs for businesses operating in California and significant public cost to the state. These costs would significantly outweigh any plausible benefits considering the existing merger control processes in place that allow the California AG to challenge transactions, and in light of the current broader antitrust enforcement climate associated with increasing uncertainty. The arguments set out below would apply broadly to proposals for any form of state specific premerger notification regime.

In broader debates about the international harmonization of antitrust enforcement globally, academics and commentators have noted the "potentially large costs of divergent national antitrust laws."⁵³ The costs of regulatory divergence include the transaction costs that companies incur to comply with diverging regimes,⁵⁴ unnecessary delays, and the increased risk of conflicting decisions.⁵⁵ Indeed, these concerns are clearly recognized by the International Competition Network (ICN). The ICN Merger Working Group looks to "promote the adoption of best practices in the design and operation of merger review regimes in order to: (i) enhance the effectiveness of merger review mechanisms; (ii) facilitate procedural and substantive convergence; and (iii) reduce the public and private time and cost of multijurisdictional merger reviews."⁵⁶

A. SIGNIFICANT PRIVATE AND PUBLIC COSTS

Dealing with multiple overlapping merger control processes results in significant costs for businesses. While the exact quantification of the overall public and private costs imposed by compliance with multijurisdictional merger notification and review requirements is difficult, various outreach efforts and data collection processes suggest that these costs are significant.⁵⁷ Merger control seeks to promote efficiency in business. However, burdensome costs that are not outweighed by broader benefits can "actually impair economic growth and damage consumer welfare."⁵⁸

Parallel merger control regimes impose direct costs on transaction parties including filing fees, attorneys’ fees, and document production costs.⁵⁹ Although in the US filing fees have recently decreased for smaller transactions, filing fees have increased

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significantly for some of the larger transactions. HSR filing fees can reach up to $2.25 million in the largest transactions.⁶⁰ The timelines for merger control reviews globally can also be significant in the context of complex deals with the potential for reviews to last for more than a year.⁶¹ This can be particularly relevant in the context of jurisdictions such as the UK⁶² or EU⁶³ which may have long pre-notification periods in addition to long periods for in-depth reviews. These longer timelines result in higher attorney’s fees with ongoing burdensome information requests and document production requests. In a recent study carried out by Analysis Group, Inc.,⁶⁴ half the respondents to an online survey for industry practitioners indicated that "’the time spent on lawyer hours, internal client hours, economic expert hours, and other internal costs to a merger has gone up relative to pre-2020."⁶⁵Parties will also often require active assistance from multiple different attorneys to navigate the differing procedures and requirements across jurisdictions. Costs imposed on businesses also include indirect and intangible costs such as loss of executives’ time and impacts on productivity.⁶⁶ The burdensome nature of parallel review processes takes time away from people within the business being able to run their business efficiently. This is even the case where transactions do not raise substantive concerns requiring in-depth review; even the process of complying with the administrative process and simple information requests can be time-consuming.⁶⁷ In addition, parallel procedures, particularly if these delay deals, can often lead to further uncertainty, which has knock-on effects on employees and can lead to issues with customers and suppliers where the company is prevented from acting in certain ways while merger control processes are ongoing (e.g. while any other suspensory obligations apply such as the waiting period under the HSR Act or considering global antitrust law).⁶⁸ When considering the proposals in New York that have stalled (see above), the New York City Bar Association was clear that it viewed the introduction of what would have been the first state-level general premerger notification system as "the creation of a redundancy with few benefits and many clear costs."⁶⁹

A separate Californian merger review process would also result in public costs to be shouldered by the State of California and ultimately the Californian taxpayer. In order for any premerger notification regime to be able to screen transactions in an efficient and informed manner, additional experienced staff and further resources would likely be required to carry out the review of any notifications and administer the regime. This cost could lead to allocation of resources away from other government initiatives, which may be of greater priority for Californians and bring greater benefits to California. In fiscal year 2023, the FTC’s and DOJ’s budgets to fund their merger review efforts are sizeable: the FTC’s general budget is $430 million (including non-antitrust enforcement funding)⁷⁰ and the DOJ Antitrust Division’s is $225 million.⁷¹

Costs can be justified where these are seen as "rationally related to the efficient review of transactions that have the potential to create appreciable anticompetitive effects within the reviewing jurisdiction."⁷² The key question is therefore whether the costs of an additional parallel premerger control process can be rationally related and outweighed by ultimate benefits for competition and consumers. There is a rational relationship when balancing the costs associated with the introduction of new merger regimes around the world with the protection of competition in a specific country. This justification does not apply in the same way in the context of a state specific merger review regime, where federal merger control laws already apply. In addition, businesses in the US are already subject to the existing costs of federal merger control.

When carrying out the exercise of weighing the costs associated with the implementation of any premerger notification regime in California with the potential benefits for customers and consumers, the costs outweigh the benefits. As set out above, there is an existing legal framework in place to allow states to review and challenge transactions. On that basis, unlike the introduction of a merger control regime in a new state or country where there are no existing merger control rules, there is limited

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incremental benefit to customers and competition particularly when contrasted with the costs set out above. In addition, the existence of directly parallel proceedings raises further efficiency concerns set out below.

B. INCREASING LEVELS OF DIVERGENCE IN OUTCOMES

The introduction of a new premerger notification regime would be likely to lead to further divergence in outcomes between California, the federal agencies, and global regulators. If the regime does not lead to any difference in outcomes as under the existing legal framework, this raises the question as to why the regime (and its associated costs) are necessary in the first place. Increasing the likelihood of divergent outcomes creates significant uncertainty for parties looking to enter into transactions and could lead to overenforcement.⁷³ The assessment of antitrust risk is already complicated as parties look to navigate the increasingly complex and novel theories of harm being applied in recent cases.⁷⁴ The current enforcement environment has already created increased uncertainty for businesses but this would be exacerbated if California were to implement a new premerger regime. Increased uncertainty has led to "[p]arties . . . internalizing regulatory risks in their calculations of whether to conduct a transaction and how to structure the deal, granting greater consideration to bidders that minimize agency scrutiny,"⁷⁵ which may lead to more efficient mergers being ignored as a result of regulatory risk.

Companies are already required to deal with significant divergence globally as a result of numerous parallel regimes with different standards of review, timelines, and procedure. This has been in particular focus for US-based companies with the increasingly broad jurisdictional reach of ex-US regimes including the United Kingdom’s application of its expansive share of supply test⁷⁶and the European Commission’s Article 22 policy.⁷⁷The number of divergent decisions has increased significantly since the GE/Honeywell acquisition in 2001, which at the time was the only merger case in which the US and the EU had reached conflicting decisions and prompted significant concerns on divergence.⁷⁸ This risk of divergent decisions has been prominently and more frequently illustrated recently in prohibited or abandoned transactions such as Cargotec’s merger with Konecranes, Sabre’s proposed acquisition of Farelogix, and Illumina’s acquisition of Grail, among others.

Divergence in approaches to remedies can also raise efficiency problems. Following a merger investigation, several outcomes are possible: (i) the transaction may be cleared, (ii) the transaction may be blocked (by the courts in the US or by regulators abroad), (iii) the parties may abandon the transaction or (iv) the transaction may be allowed to proceed but only subject to the imposition of remedies.⁷⁹A specific premerger regime in California could result in parallel settlement negotiations running concurrently. Parallel remedy negotiations could complicate FTC or DOJ review, add an additional burden to businesses, and lead to a possible patchwork of different remedies within the US that can ultimately undermine the efficiency-enhancing aspects of transactions.

A more restrictive regime in California could dissuade companies from either choosing to set up in California or incentivize companies to move their headquarters or operations to other states with broader costs for the California economy and job prospects for Californians. As set out below, this could impact the innovative start-up ecosystem that currently thrives in California and often relies on the existence of suitable exit strategy options. Other states may already seek to attract businesses with lower taxes and regulation and a California specific merger control regime could accelerate any such shifts or on the other hand result in increasing levels of state specific merger regulation, which could impact Californian businesses active nationwide.

IV. BENEFITING CONSUMERS BY ENCOURAGING M&A

Increasing the costs on businesses to engage in M&A, including from the uncertainty of potentially

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diverging decisions, could discourage deals beneficial to consumers. M&A transactions can promote competition and encourage innovation. In particular, M&A can provide an important exit option for startups, without which they may be more likely to fail resulting in less innovation.⁸⁰ Venture capital (VC) firms invest in startups to obtain a return on their investment. Exit options for those investments, including by M&A, are needed to enable that return and thus encourage VCs to make the initial investments and for the startups to innovate.⁸¹

More broadly, deals can generate efficiencies for the merging parties that ultimately benefit consumers. By combining two companies, the merged entity can benefit post-transaction from lower costs, more streamlined and efficient operations, and economies of scale. Consumers often benefit from those efficiencies through lower prices and improved products and choices.⁸² Analysis of prior tech transactions has found that most acquisitions benefited consumers and increased competition.⁸³Consumers can obtain lower prices as a result of the merged entity’s scale and ability to increase access to the target’s novel ideas. In addition, the combined entity can share resources and expertise to advance innovation and R&D.⁸⁴ Introducing a new California-specific merger approval process could hamper this innovation that helps grow the California economy.

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Notes:

^1. Sarah Melanson is a senior associate and Megan Yeates is an associate in the Silicon Valley office of Freshfields Bruckhaus Deringer. The authors would like to thank Ryan Nassar for his assistance with this article. The views that the authors express in this article are their own, and do not necessarily reflect those of their firm or their clients.

^2. See A.C.R. 95, 2021-2022 Leg., Reg. Sess. (Cal. 2022).

^3. Cal. L. Rev. Comm’n., Antitrust Law – Study B-750 (2022), http://www.clrc.ca.gov/B750.html; see Assem. Con. Res. 95, 2021-2022 Reg. Sess. ch.147 (Cal. 2022), "Whether the law should be revised in any other fashion such as approvals for mergers and acquisitions and any limitation of existing statutory exemptions to the state’s antitrust laws to promote and ensure the tangible and intangible benefits of free market competition for Californians."

^4. Memorandum from Brian Hebert to the Staff of the Cal. L. Rev. Comm’n (Nov. 9, 2022) http://jbtest.ucdavis.edu/pub/2022/MM22-50s1.pdf) [hereinafter Hebert Memorandum]. See Fed. Trade Comm’n, Premerger Notification and the Merger Review Process, https://www.ftc.gov/advice-guidance/competition-guidance/guide-antitrust-laws/mergers/premerger-notification-merger-review-process.

^5. Memorandum, supra note 4, at 3.

^6. This is the standard in the US (see 15 U.S.C. § 18).

^7. See Robert B. McNary, Marisa E. Adelson, The California Difference: Why California Law Really Matters (Merger Enforcement), 22 No.2 Competition: J. Anti. & Unfair Comp. L. Sec. St. B. Cal. 69 (2013).

^8. See Cal. Corp. Code § 5913 and Cal. Corp. Code § 7913.

^9. See Cal. Health & Safety Code § 1340 et seq.; 28 CCR § 1300.52.4(d)(iii). See also Cal. Health & Safety Code § 127507.

^10. See Cal. Pub. Util. Code § 854.

^11. See Cal. Ins. Code § 839.1.

^12. See S. 977, 2019-2020 Leg., Reg. Sess. (Cal. 2020).

^13. Id.

^14. Id.

^15. See Assem. 2080, 2021-2022 Leg., Reg. Sess. (Cal. 2022).

^16. Id. at 3.

^17. Id.

^18. See Press Release, State of Calif. Dept. of Just., Attorney General Becerra and Senator Monning Announce That Legislation to Reduce Healthcare Costs, Increase Access to Affordable Care Passes Senate Health Committee, https://oag.ca.gov/news/press-releases/attorney-general-becerra-and-senator-monning-announce-legislation-reduce (quoting Senator Bill Monning: "Physicians are facing severe financial pressures because of the current pandemic and data shows that prices skyrocket when providers consolidate and reduce competition in the marketplace. SB 977 will protect existing services for patients and address the issue of unfair business practices that increase healthcare costs for all Californians.".

^19. See Press Release, Cal. Hosp. Ass’n, Urge Assembly Members to Vote No on AB-2080, Which Would Threaten California’s Access to Care (last visited June 30, 2023) https://calhospital.org/calls-to-action/urge-assembly-members-to-vote-no-on-ab-2080-which-would-threaten-californians-access-to-care/.

^20. HEALTH CARE CONSOLIDATION AND CONTRACTING FAIRNESS ACT OF 2022: Hearing on Assem. 2080 Before the Assemb. Comm. On Judiciary, 2021-2022 Reg. Sess. 14 (Cal. 2022) (List of those in opposition of the bill).

^21. Letter from Amy Durbin, Legis. Advoc., Ctr. for Gov. Rel., Cal. Med. Ass’n, to the Hon. Anthony Portantino, Chair S. Appropriations Comm. (May 27, 2020), https://californiahealthline.org/wp-content/uploads/sites/3/2020/05/SB-977-Monning-Senate-Appropriations-Oppose-Letter.pdf.

^22. Jeff Jaeckel, et al., United States: merger review process, (Sept. 30, 2022) (available at https://globalcompetitionreview.com/review/the-antitrust-review-of-the-americas/2023/download).

^23. Id.

^24. In Washington, the notification requirement applies when at least one party is a Washington entity, and a party that is an out-of-state entity (if applicable) generates $10 million or more in revenue from healthcare services for patients residing in Washington. See Wash. Rev. Code § 19.390, (2019). In Connecticut, transactions between physician group practices and hospitals, captive professional entities, medical foundations, or other group practices which constitute a "material change" trigger the notification requirement. See An Act Concerning Notice of Acquisitions, Joint Ventures, Affiliations of Group Medical Practices and Hospital Admissions, Medical Foundations, and Certificates of Need, (2014), https://www.cga.ct.gov/2014/ACT/pa/pdf/2014PA-00168-R00SB-00035-PA.pdf. See also Barbara Sicalides, Esq., Daniel Anziska, Esq., Megan Morley, Esq. and Dennie Zastrow, Esq., State Enforcers Expanding Premerger And Antitrust Jurisdiction Over Healthcare Transactions: Guidance For This Growing Trend, (Dec. 15, 2020) (available at https://www.americanbar.org/groups/health_law/publications/aba_health_esource/2020-2021/december-2020/sta-enf/).

^25. S.B. S933A, 2021-2022 Leg., Reg. Sess., (N.Y. 2021) (available at https://www.nysenate.gov/node/8295611). N.Y. City Bar, Report on Legislation by the Antitrust and Trade Regulation Committee (June 2022), https://s3.amazonaws.com/documents.nycbar.org/files/20221055-21cAntitrustAct.pdf.

^26. Senate Bill S933C (last accessed Mar. 22, 2023), https://www.nysenate.gov/legislation/bills/2021/S933.

^27. See Assem. 1812A, 2021-2022 Leg, Reg. Sess. (N.Y. 2021); S.B. S933A, 2021-2022 Leg., Reg. Sess. (N.Y. 2021). See also Daniel Vitelli, New York State Amends Groundbreaking Antitrust Bill (May 19, 2022) (available at https://constantinecannon.com/antitrust-group/new-york-senate-amends-groundbreaking-antitrust-bill/).

^28. Vitelli, supra note 27; see N.Y. City Bar, supra note 25.

^29. See § 340, 10(A) of S.B. S933C, 2021-2022 Leg., Reg. Sess. (N.Y. 2022).

^30. See Vitelli, supra note 27; N.Y. City Bar, supra note 25.

^31. 15 U.S.C. § 18.

^32. The DOJ’s authority is provided in 15 U.S.C. § 25, while the FTC has authority under Section 13(b) of the FTC Act codified at 15 U.S.C § 53(b). See also 1 ABA Antitrust Law Section, Antitrust Law Developments 432 (9th ed. 2022). State AGs and private parties have similar authority under 15 U.S.C. § 26. See id. at 455.

^33. See Premerger Notification Program, Fed. Trade Comm’n, https://www.ftc.gov/enforcement/premerger-notification-program.

^34. 15 U.S.C. § 18a.

^35. See Fed. Trade Comm’n, Introductory Guide I: What is the Premerger Notification Program? An Overview (March 2009) at 1.

^36. Fed. Trade Comm’n & Dep’t of Just., Hart-Scott-Rodino Annual Report: Fiscal Year 2021, App’x A, https://www.ftc.gov/system/files/ftc_gov/pdf/p110014fy2021hsrannualreport.pdf.

^37. See Investigations of Consummated and Non-Notifiable Merger, United States, O.E.C.D. Doc. DAF/COMP/WP3/WD(2014)23, at 2 (2014), https://one.oecd.org/document/DAF/COMP/WP3/WD(2014)23/en/pdf.

^38. Cal. Anti. & Unfair Comp. L. §§ 5.01, 5.03 (Belinda S. Lee ed., 2022) (quoting Cal. Bus. & Prof. Code § 17200).

^39. Jon Sallet, FCC Transaction Review: Competition and the Public Interest, FCC Blog (August 12, 2014 – 12:39 pm) (citing 47 U.S.C. § 310(d)), https://www.fcc.gov/news-events/blog/2014/08/12/fcc-transaction-review-competition-and-public-interest.

^40. Id.

^41. See Mergers and Acquisitions, Dep’t of Transp., https://www.transportation.gov/policy/aviation-policy/competition-data-analysis/mergers-acquisitions (last visited July 1, 2023).

^42. See Statement, Dep’t of Transp., US DOT STATEMENT ON THE JUSTICE DEPARTMENT’S LAWSUIT TO BLOCK PROPOSED JETBLUE-SPIRIT MERGER (Mar. 7, 2023) https://www.transportation.gov/briefing-room/usdot-statement-justice-departments-lawsuit-block-proposed-jetblue-spirit-merger.

^43. Dep’t of Just., Four Additional States Join Justice Department’s Suit to Block JetBlue’s Acquisition of Spirit Airlines (Mar. 31, 2023), https://www.justice.gov/opa/pr/four-additional-states-join-justice-department-s-suit-block-jetblue-s-acquisition-spirit.

^44. See Fed. Commc’n Comm., AT&T And T-Mobile, https://www.fcc.gov/proceedings-actions/mergers-transactions/att-and-t-mobile.

^45. See Tony Romm, et. Al., 7 states join AT&T/T-Mobile suit, POLITICO, Sept. 16, 2011, https://www.politico.com/story/2011/09/7-states-join-at-t-t-mobile-suit-063709.

^46. See id.

^47. See Reuters Staff, 11 state AGs show support for AT&T/T-Mobile merger, Reuters, Jul. 27, 2011, https://www.reuters.com/article/ctech-us-tmobile-att-states-idCATRE76Q6P020110727.

^48. See Press Release, U.S. Dept. of Just., Justice Department Settles with T-Mobile and Sprint in Their Proposed Merger by Requiring a Package of Divestitures to Dish (Jul. 26, 2019) (available at https://www.justice. gov/opa/pr/justice-department-settles-t-mobile-and-sprint-their-proposed-merger-requiring-package).

^49. See id.

^50. See Press Release, State of Calif. Dept. of Just., Attorney General Becerra: States Remain Opposed to T-Mobile/Sprint Megamerger, https://oag.ca.gov/news/press-releases/attorney-general-becerra-states-remain-opposed-t-mobilesprint-megamerger; see also New York v. Deutsche Telekom AG, 439 F. Supp. 3d 179 (S.D.N.Y. 2020).

^51. See Press Release, State of Calif. Dept. of Just., Attorney General Becerra Announces Settlement Ending the State’s Challenge to T-Mobile, Sprint Merger, https://oag.ca.gov/news/press-releases/attorney-general-becerra-announces-settlement-ending-state%E2%80%99s-challenge-t-mobile#.

^52. See Fed. Trade. Comm’n and Dept. of Just., PROTOCOL FOR COORDINATION IN MERGER INVESTIGATIONS BETWEEN THE FEDERAL ENFORCEMENT AGENCIES AND STATE ATTORNEYS GENERAL (available at https://www.justice.gov/sites/default/files/atr/legacy/2011/12/21/1773.pdf).

^53. John O. McGinnis, The Political Economy Of International Antitrust Harmonization, 45, Wm. & Mary L.R. 551, 551 (2003).

^54. See Id. (discussion of costs with industry compliance).

^55. See Anu Bradford, International Antitrust Cooperation and the Preference for Nonbinding Regimes, 16, 319, 319 (Andrew T. Guzman ed., 2011).

^56. Int’l Competition Network, https://www.internationalcompetitionnetwork.org/working-groups/merger/ (last visited July 1, 2023) (emphasis added).

^57. Int’l Competition Policy Advisory Comm. To the Attorney Gen. and Assistant Attorney Gen. for Antitrust, Multijurisdictional Mergers: Rationalizing the Merger Review Process Through Targeted Reform, Final Report 87 (2000) [hereinafter Multijurisdictional Mergers] https://www.justice.gov/sites/default/files/atr/legacy/2006/06/01/chapter3.PDF) (citing J. William Rowley, QC & A. Neil Campbell, Multi-jurisdictional Merger Review—Is It Time for A Common Form Filing Treaty? in Policy Directions for Global Merger Review: A Special Report by the Global Forum for Competition and Trade Policy (1999)).

^58. Multijurisdictional Mergers, supra note 58, at 94 (quoting Testimony of Luis de Guindos Jurado, Director General de Politica Economica y Defensa de la Competencia, ICPAC Hearings (Nov. 2, 1998), at 100).

^59. Multijurisdictional Mergers, supra note 58, at 92.

^60. See HSR threshold adjustments and reportability for 2023, Fed. Trade Comm’n (Feb. 16, 2023), https://www.ftc.gov/enforcement/competition-matters/2023/02/hsr-threshold-adjustments-reportability-2023.

^61. Multijurisdictional Mergers, supra note 58, at 93.

^62. See Competition and Mkts. Auth., Mergers: Guidance on the CMA’s jurisdiction and procedures (2022), https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1044636/CMA2_guidance.pdf.

^63. Merger procedures Eur. Comm’n., https://competition-policy.ec.europa.eu/mergers/procedures_en#:~:text=From%20the%20opening%20of%20a,working%20days%20can%20be%20granted (last visited July 1, 2023).

^64. See D. Daniel Sokol et al., Antitrust Mergers and Regulatory Uncertainty, (December 6, 2022) (unpublished article, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4295283).

^65. See Id. at 27.

^66. Multijurisdictional Mergers, supra note 58, at 92.

^67. See Id. at 92-93.

^68. See Id. at 93-94. "Companies in a number of recent mergers have been waiting upward of a year or longer for a final verdict, and some deals have fallen apart because of government concerns. . . As time passes, merging firms can become increasingly worried about completing a deal. They have to ensure financing remains in place, and that can cost money. They can begin to lose employees nervous about the future, as well as customers." Brett Kendall, U.S. Antitrust Reviews of Mergers Get Longer, WSJ, June 7, 2015.

^69. See N.Y. City Bar, supra note 25 at 7.

^70. See Budget and Strategy, https://www.ftc.gov/about-ftc/budget-strategy.

^71. See Sokol et al., supra note 65 at 11. See U.S. Dept. of Just., Appropriation Figures for the Antitrust Division, https://www.justice.gov/atr/appropriation-figures-antitrust-division.

^72. Multijurisdictional Mergers, supra note 58, at 94.

^73. See Bradford, supra note 56, at 319-20; Sokol et al., supra note 65, at 25-28.

^74. See Sokol et al., supra note 65.

^75. See Sokol et al., supra note 65, at 27.

^76. The CMA can review deals where the target turnover in the UK exceeds GBP 70m or where parties together supply or acquire at least 25% of a particular good or service supplied in the UK (as long as there is an increment). Importantly the share of supply test does not look at markets in the traditional sense. The CMA emphasizes that it could define the share of supply using metrics such as: "value, cost, price, quantity, capacity, number of workers employed or some other criterion." See Enterprise Act 2002, ch. 40 § 23 (UK), https://www.legislation.gov.uk/ukpga/2002/40. The CMA’s broad approach to this jurisdictional test was recently approved by the Competition Appeal Tribunal in Sabre Corporation v. Competition & Markets Authority [2021] CAT 11.

^77. Article 22 is an existing article in the EU Merger Regulation (EUMR) which allows EU member states to refer deals that did not meet European Commission or national authority merger control thresholds to the European Commission for review. This shift in the policy approach to Article 22 to allow for referrals of certain categories of transactions was revived in a European Commission policy statement in 2021 (Commission Guidance on the application of the referral mechanism set out in Article 22 of the Merger Regulation to certain categories of cases, Brussels, 26.3.2021 C(2021) 1959 final, https://ec.europa.eu/competition/consultations/2021_merger_control/guidance_article_22_referrals.pdf).

^78. See Donna E. Patterson & Carl Shapiro, Transatlantic Divergence in GE/Honeywell: Causes and Lessons, 25, UC Berkeley Cover Stories 18, 18-26 (2001); Bradford, supra note 56, at 324 n.15.

^79. Martha Samuelson, Ishita Rajani and Alex Robinson, Economic Analysis of Merger Remedies (Nov. 8, 2021), https://globalcompetitionreview.com/guide/the-guide-merger-remedies/fourth-edition/article/economic-analysis-of-merger-remedies#footnote-074. See Merger Remedies Manual, DOJ Antitrust Division, September 2020, https://www.justice.gov/atr/page/file/1312416/download [hereinafter DOJ Merger Remedies Manual].

^80. Noah Joshua Phillips, Commissioner, Fed. Trade Comm’n, Opening Keynote at the Global Antitrust Economics Conference (May 31, 2019), at 17-18.

^81. Devin Reilly et. al., The Importance of Exit via Acquisition to Venture Capital, Entrepreneurship, and Innovation 32 Minn. J. In’l L. 159, 162 (Dec. 9, 2021), https://www.analysisgroup.com/globalassets/insights/publishing/2022_exit_via_acquisition_reilly_sokol_toniatti.pdf.

^82. Fed. Trade Comm’n, Entry and Efficiencies (available at https://www.ftc.gov/advice-guidance/competition-guidance/guide-antitrust-laws/mergers/entry-efficiencies).

^83. David Crawford & Michael Schallehn, Regulate with Care: The Case for Big Tech M&A (Sept. 20, 2021), https://www.bain.com/insights/big-tech-mergers-and-acquisitions-regulate-with-care-tech-report-2021.

^84. Id.

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