United States: The Guide To Merger Remedies: Giving Effect To The Remedy

Introduction

Remedies are an important aspect of merger control because a large proportion of mergers where competition concerns are identified are cleared with remedies. For example, in the past year, the Federal Trade Commission (FTC) and the Antitrust Division of the Department of Justice (DOJ) (together, 'the US agencies') resolved 23 of the 39 merger challenges using negotiated settlements. Similarly, in the EU, half of the Phase II cases in the past year were cleared with remedies.

An effective remedy is one that fixes the competition concern caused by the transaction, while at the same time preserving the efficiencies generated by the deal. There are two main categories of risk that can undermine the ability of a remedy to achieve this goal: composition risk and implementation risk. Composition risk refers to the risk that a remedy is not designed in a way that is appropriate or broad enough in scope to address the likely competitive harm that has been identified, or to attract a suitable purchaser that can operate as an effective competitor in the market. Implementation risk relates to the potential failure to effectively and efficiently implement the remedy.

In October 2005, the European Commission (EC) provided a mixed view on the effectiveness of remedies and identified a series of 'serious design and implementation issues affecting the effectiveness of remedies'.2 The EC identified composition risk in terms of the divestment business being inadequate in scope as the most common issue. Since then, the EC has developed a remedies policy that is designed to minimise both composition and implementation risks. Any remedy package will be tested against these two concerns. The US agencies' approach to remedies as developed over the years is very similar to that of the EC.

Crafting an effective remedy can be challenging and often depends on the competition concerns that need to be addressed, as well as timing (i.e., whether the parties have the time to fight the case on the merits or prefer to give a broader remedy early on in order to secure a quick clearance).

This chapter focuses on designing an effective remedy and then identifies guide posts for dealing with composition risk and implementation risk in the United States and the European Union.

Designing an effective remedy

US

The US agencies' view is that horizontal mergers will typically require a structural remedy to resolve any anticompetitive concerns.3 This often takes the form of divestitures of existing business entities.4

The US agencies can also employ non-structural conduct (or behavioural) remedies. These often take the form of binding commitments designed to constrain the future conduct of the merged firm. While behavioural relief may sometimes supplement a required divestiture to fully achieve the remedial purpose, the US agencies generally consider behavioural remedies to be far inferior because of the difficulty and costs associated with constructing, implementing, monitoring and enforcing such remedies.5 Under the current administration, the DOJ and FTC have both stressed a strong preference for structural remedies relative to behavioural remedies.6

The US agencies' preference for structural remedies can extend to vertical mergers as well,7 although behavioural remedies can often effectively address the anticompetitive issues raised by vertical mergers. Indeed, Live Nation/Ticketmaster, Comcast/NBC Universal and Google/ITA Software were all vertical mergers that the DOJ cleared, subject to behavioural commitments designed to address competitive concerns.8 However, the US agencies appear less willing to accept behavioural remedies unless there is certainty that the anticompetitive conduct will be remedied.9 In November 2017, the DOJ filed suit against the AT&T/Time Warner transaction, a vertical merger.10 In its complaint, the DOJ argued that were the merger to go through, AT&T would likely raise prices for other pay-TV distributors that pay for rights to Time Warner movies and shows.11 Although AT&T was reportedly willing to accept a behavioural consent decree with restrictions similar to those the DOJ had previously accepted in Comcast/NBC Universal – analytically an almost identical transaction – the DOJ nonetheless found the relief inadequate to ensure the competitive landscape remained intact post-merger.12 In June 2018, following a six-week long bench trial, the court rejected the DOJ's challenge and ruled that the transaction did not violate the antitrust laws.13 It remains to be seen whether the DOJ will become more willing to accept behavioural consent decrees consistent with past practice.

Restoring competition is the 'key to the whole question of an antitrust remedy'.14 Thus, the US agencies will refuse to accept a divestiture buyer or proposed divestiture package where they have determined that the proposed remedies are insufficient to replace the lost competition or quell competitive concerns. For instance, in April 2016, the DOJ filed a suit seeking to block Halliburton Company's proposed acquisition of Baker Hughes Inc.15 Before the lawsuit was filed, Halliburton had offered to divest up to US$7.5 billion in certain assets in an effort to address the department's competitive concerns. According to the DOJ's complaint, the proposal was inadequate because it did not include full business units, withheld many critical assets, involved a number of ongoing entanglements between the merged company and the proposed divestiture buyer, and overall failed to replicate the existing (pre-merger) competition.16

Similarly, the FTC found that the proposal by Staples Inc and Office Depot Inc to divest more than US$1.25 billion in large corporate customer contracts to the wholesaler Essendant was insufficient to remedy the significant competitive concerns caused by the transaction.17 The FTC indicated that: (1) many of the contracts Staples proposed to transfer to Essendant were short-term, allowing customers the option to return to Staples/Office Depot when the contracts expired; (2) the proposed divestiture buyer did not currently serve any business-to-business (B2B) customers; and (3) wholesalers like Essendant were historically unsuccessful competitors for B2B business. Given these inadequacies, the FTC concluded that Essendant would be unable to compete with the combined Staples/Office Depot on day one, thus rejecting the proposed divestiture remedy.

EU

In the 2005 Remedies Study, the EC identified that too much weight had been given to market shares rather than the ability of the divested business to restore effective competition. The EC has since made significant efforts to refocus this approach stressing that 'the basic aim of commitments is to ensure competitive market structures.'18 This is why commitments that are structural in nature, such as selling a business unit, are preferred; they provide a clear-cut, immediate and permanent way to restore effective competition and are therefore more suited to deal with remedy composition risks. Like the US, the EC considers that divestiture commitments are the best way to eliminate competition concerns resulting from horizontal overlaps. Additionally, empirically speaking, remedies involving divestitures are considered to be more effective, as it is estimated that such remedies can cut in half the average price increase resulting from mergers.19

For structural remedies to effectively deal with composition (as well as remedy implementation) risk, the parties need to ensure that the divested assets can operate a stand-alone viable business on a long-term basis. For example, in Dow/DuPont, the parties offered remedies that would ensure that the purchaser had the capabilities to preserve the viability and competitiveness of the divested products throughout their life cycles.20

The EC accepts that other structural remedies (such as granting access to key infrastructure or inputs on non-discriminatory terms) or, in some cases, behavioural commitments may be considered suitable. However, divestitures are used as the benchmark to measure the effectiveness and efficiency of other remedies. For example, in Huntsman/Rockwood, a know-how divestiture (including the production process and the brand) was considered to be sufficient because it would have the same effect as a structural remedy.21

In horizontal mergers, structural remedies can also be combined with behavioural remedies.22 However, behavioural remedies on their own will rarely be considered suitable in horizontal cases. They will be satisfactory only if the workability is fully ensured by effective implementation and if they do not risk leading to distorting effects on competition. Conversely, the EC is open to non-structural remedies in non-horizontal cases. For example, in vertical mergers the EC is more willing to accept structural and behavioural remedies, or behavioural remedies on their own.23 Behavioural remedies are most frequently used in conglomerate mergers and require effective monitoring mechanisms because, in principle, the parties retain the ability to negatively affect competition, but are simply committing not to make use of that ability.24

When designing the remedy with the aim of reducing composition risk, the EC will require that the remedy is broad enough in scope to ensure that the purchaser can operate as an effective purchaser. Therefore, particular attention must be given to links between the retained business and the divestment business in terms of access to inputs, services from the retained business and access to technology. In relation to inputs, the merged entity may need to assign contracts for critical inputs to be available to the divestment purchaser25 or maintain manufacturing services until the divestment business is ready.26 With regard to transitional agreements, the EC is willing to accept transition agreements for approximately three years.27 Anything that goes beyond this duration risks that the remedy is not broad enough for the purchaser to operate as an effective competitor on a stand-alone basis. A carveout may also be needed where there is a divestiture of a business that has existing links, or is partially integrated with businesses retained by the parties. The EC prefers reverse carveouts in order to maintain viability and competitiveness of the divestment business.28

As in the United States, the key aim of the EC is to ensure that the proposed divestment will allow the restoration of competition in the relevant market that otherwise would be lost as a result of the transaction. Therefore, when looking at what is necessary for the purchaser to operate as an effective purchaser, the divestment may need to go beyond the competition concerns that have been identified. For example, in Solvay/Cytec the commitments gave the purchaser the possibility to acquire other products that were manufactured in the same unit to allow for the divested business to be operated in an effective manner.29

Implementing an effective remedy

Once the remedy has been designed, parties need to ensure that the purchaser is considered suitable, the divestment agreement replicates the agreed remedies and that the divestment business can operate on a stand-alone basis with minimal monitoring. These factors are key when dealing with implementation risk.

Acceptable purchasers

The viability of the remedy depends on the suitability of the purchaser, and therefore agencies will pay particular attention to the profile of the purchaser. The US and the EU are largely aligned in their approach in this regard. In both the US and the EU, the relevant agency must in all cases give prior approval to the divestiture buyer. The US agencies will scrutinise the financial and competitive viability of the prospective purchaser and will insist that the purchaser have both the ability and the intention to compete effectively in the relevant market.

Similarly, in the EU, the purchaser must 'possess the financial resources, proven relevant expertise and have the incentive and ability to maintain and develop the divested business as a viable and active competitive force in competition with the parties and other competitors'.30 In this regard, the EU prefers the divestment business going to an established firm with an existing presence in the market or in a vertical market. This approach ensures that the purchaser's activities can be scaled up as quickly as possible to replicate the competitive force of the parties pre-merger. Consequently, private equity buyers or tollers are often considered not to be suitable purchasers. In cases where the EC has doubts as to the ability of a purchaser to replicate on a long-lasting basis the pre-merger competitive constraints imposed by the parties on the market, it will specifically set out what features the purchaser must have in order to be considered suitable. For example, in Huntsman/Rockwood, the EC acknowledged that divesting a production plant would have been disproportionate because the competition concern was that the other suppliers had the capacity, but lacked the relevant know-how to become viable competitive forces. Therefore, the purchaser had to meet more stringent criteria in order to be considered suitable and had to be a '[s]ulphate based TiO2 producer with sufficient capacity to meet the current and reasonably foreseeable TR52 demand worldwide'.31

Most importantly, the divestiture buyer must be able to replicate and replace the competition lost through the transaction. In the US and the EU, the purchaser will have to provide detailed financial documentation and demonstrate that it has the necessary financial resources to fund the acquisition (explaining all sources of funding), satisfy any immediate capital needs, and operate the divested assets on a going-forward basis (including any contingency plans if financial projections are not met). The purchaser will also have to prepare and present a business plan to the relevant agency to establish that the purchaser has adequate experience, incentives and commitment to compete. Parties should bear all these criteria in mind when selecting a prospective purchaser because they ultimately have the burden of convincing the authorities that the purchaser is suitable.32

In the US, the need for a buyer with strong financial resources is particularly important given recent divestitures that have resulted in failures after the buyer declared bankruptcy. For instance, in Hertz Global Holding Inc/Dollar Thrifty Automotive Group Inc, the divestiture buyer declared bankruptcy and the FTC had no choice but to allow Hertz to buy back some of the auto rental locations it had divested so that these locations could continue to operate.33 The FTC was faced with a similar outcome in Albertsons LLC's acquisition of Safeway Inc, where Haggen Holdings LLC, the divestiture buyer of the grocery stores, also declared bankruptcy. Albertsons was allowed to reacquire the divested stores and the consent decree was modified to permit Albertsons to rehire employees.34

Both the US and EU agencies are unlikely to permit divestitures involving seller financing apart from in exceptional circumstances. For example, the US agencies may approve staggered payments to the seller, provided such payments are not tied to any performance-based benchmarks. The EC also sets out that it will not provide any seller financing if this were to give the seller a share in the future profits of the divested business.35 The US agencies will also not accept a divestiture to a buyer that intends to redeploy the assets elsewhere. That said, while the prospective purchaser must have the ability and intent to compete in the relevant market for the foreseeable future, the US agencies will not insist that the buyer maintain the divested assets – or continue to employ them in the market – indefinitely.36

In the US and the EU, the divestiture buyer cannot be approved if the divestment would create competitive concerns. Thus, the buyer should not already be a significant participant or poised entrant in the relevant market pre-divestiture. It is notable in this regard that the former Director of the FTC's Bureau of Competition recently acknowledged that consolidation in some industries has made it more challenging to find qualified buyers for divestiture assets.37

How to ensure expeditious and successful divestiture

US

The US antitrust enforcement agencies have a strong preference for an 'upfront' divestiture buyer, meaning that the parties must identify an acceptable buyer, and finalise and execute the purchase agreement with that buyer, before a consent order is issued. The US agencies are particularly likely to require the merging parties to identify an upfront buyer if the parties propose to divest less than a stand-alone business or a 'mix-and-match' package of assets.38 An upfront buyer ensures that the divestiture package results in a purchaser that will preserve competition in the market, and it reduces the risk that the remedy will be ineffective or that harm to competition will occur in the interim period between the closing of the primary transaction and the implementation of the remedy. While there are instances where an up-front buyer is not required, this is generally the exception rather than the rule.39 Indeed, the DOJ has demanded an upfront buyer in more than half of its merger challenges in the past several years.40

Notably, the FTC's recent study on merger remedies found that all prior remedies involving divestitures of stand-alone businesses succeeded in maintaining or restoring competition, but that divestiture packages comprising less than an ongoing business sometimes did not succeed in remedying the competition lost as a result of the merger – even where there was an upfront buyer. The FTC thus announced that:

Going forward, respondents and buyers can expect that proposals to divest selected assets, even when the proposal includes an upfront buyer, will undergo more detailed scrutiny to reduce further the risk that the buyer won't get what it needs to be an effective competitor.41

EU

Unlike the US agencies, the EC is bound by a strict and complex timetable for Phase I and Phase II merger reviews. This factor can have a far-reaching effect on the substance of the remedies and there have even been cases where parties pull and refile to have enough time to prepare a suitable remedy and avoid going to a Phase II review.42

In a normal scenario, which involves the sale of a divestment business after the EC's conditional clearance decision, the EC considers that a short divestiture period significantly contributes to the success of the divestiture since it reduces exposing the divestment business to uncertainty. Typically, a period of approximately six months is considered acceptable for the first divestiture period with an additional period of three months for the trustee divestiture period. In practice, parties often consider starting negotiations with a potential upfront buyer during the merger review timeline so that they are better positioned in terms of timing to find a buyer that is appropriate and terms that are acceptable to the EC. In a fix-it-first scenario, the risk for the merging parties is that their bargaining power is significantly reduced, especially in terms of getting the best price. This is owing to the fact that, because all necessary approvals need to be obtained within the strict merger review timelines, there is little margin for negotiation.

In practice, the EC has taken a flexible approach by allowing the parties' planned fix-it-first remedy to evolve into an upfront buyer scenario43 or allowing a fix-it-first to be combined with other remedy packages in order to secure Phase I clearance. For example, in AB InBev/SabMiller, the parties identified a fix-it-first solution early on, but later in the review additional competition concerns were identified. The EC allowed a dual remedy involving a fix-it-first solution and another remedy package to deal with the other competition concerns in order to secure a Phase I clearance.44 While parties can have a 'pure' fix-it-first solution in Phase I, this is rare.45 From a commercial point of view, parties would have to be willing to provide a broader remedy and identify a purchaser in (or even before) pre-notification discussions with the EC.

As a last resort, parties may also be willing to divest the 'crown jewels' to ensure a timely divestment. This involves structures in which the parties commit to divest a very attractive business if they have not divested the originally proposed business by the end of a period fixed in the commitments.

Divestiture agreement

US

Where there is an upfront buyer, merging parties will execute the transaction (divestiture) agreement with the proposed purchaser before entering into a final consent decree with the FTC or the DOJ. By contrast, where there is a 'post-order buyer', the buyer is identified, and the divestiture agreement executed, only after a final consent decree has been issued.

In either case, whether the purchaser is upfront or post-order, the US agencies will carefully review the commercial agreements giving effect to the divestiture to ensure that they conform to the consent decree and its remedial objectives. The transaction documents should provide for the effective transfer of all necessary assets and detail any additional obligations, such as transitional services. The US agencies will not participate in negotiations between the merging parties and the divestiture buyer, but they will provide comments and guidance relating to commercial agreement provisions.46

Consent decrees almost always stipulate that if parties fail to divest in a timely manner (within a certain specified period of time), the agency reserves the right to appoint a trustee to effect a divestiture of the same assets or a different 'crown jewel' package of assets.47

The US agencies are generally not concerned with the purchase price for the acquisition of the divested assets and there is no purchase price minimum.48

EU

The EC, like the US, also carries out a detailed analysis of the commercial agreements to ensure that the remedy is effective and that the divestiture has a lasting impact on the market. In particular, it checks whether in the divestiture agreement the purchaser has obtained all elements necessary to allow it to be a viable stand-alone player on the market. For example, in GE/Alstom the EC took into account the existing assets already owned by Ansaldo when looking at whether the remedy was broad enough in scope.49 In the case of an upfront buyer or fix-it-first solution, the parties should be prepared for the EC to take a hands-on approach to check in on the progress of negotiations with the purchaser and the divestiture agreement. This becomes less relevant in the case of normal remedies where clearance has occurred and the monitoring trustee will step in to ensure that the remedy is correctly implemented.

Monitoring

US

In cases where the remedy imposes an obligation that requires a continuing ongoing relationship between the parties and the divestiture buyer, the US agencies often appoint an independent third party to monitor the parties' compliance with the consent order obligations.50 The FTC's Compliance Division, among other tasks, monitors consent decrees, including evaluating requests to reopen, modify, or set aside orders and seek penalties for order violations. Recently, the DOJ announced that it has created a similar office solely dedicated to ensuring compliance and enforcement of the Antitrust Division's consent decrees.51

EU

In the EU, the parties must preserve the divestment business by ring-fencing it and not carrying out any acts that might have significant negative impacts on its value, management or competitiveness. Parties may also have to continue to finance the divested business to allow its ongoing development on the basis of the existing business plans and to retain key personnel by offering incentive schemes.

The supervision process is carried out by the monitoring trustee, which acts as the 'eyes and ears' of the EC in order to hold separate the divestment business, oversee carve­outs, verify the sale process and review the proposed purchasers. The monitoring trustee is also obliged to report to the EC at regular intervals and can intervene in matters at the EC's request.

Conclusion

While there are differences in the merger procedure in the EU and United States, there is a clear convergence in their approaches. Over time, authorities in both jurisdictions have increasingly taken a hands-on approach to ensure that remedies address both composition and implementation risk. They have worked to craft remedies that are broad enough to effectively address the competition concerns and are implemented in a way that creates a meaningful and lasting change in the market. The authorities have also shown willingness to take flexible approaches to merger remedies. For example, the EC has been willing to consider blended remedy packages to address different competition concerns in a proportionate way and is willing to allow fix-it-first solutions that are not workable to evolve into upfront buyer solutions to ensure that there is an effective remedy. From experience, merging parties are also becoming more pragmatic and engage in remedy discussions with the authorities from the outset. For example, at the EC level, parties are routinely engaging in a longer pre-notification discussion as a means of paving the way for a Phase I clearance with remedies.

One factor that has increased significantly since the EC remedy study is the international cooperation between the EC, US and competition authorities in other jurisdictions such as Brazil, China and Korea. In a speech in 2016, Competition Commissioner Vestager stated that the EC cooperates with agencies outside of the EU in approximately 60 per cent of complex merger investigations.52 In cases where the competition concerns in the two jurisdictions were different, such as GE/Alstom, the EU and the US collaborated on overlapping, non-conflicting divestiture packages across the Atlantic to the same purchaser. Even in cases where the same outcome has not been reached, the authorities have been keen to stress that international cooperation in mergers (and therefore merger remedies) remains key. This can be seen in Commissioner Vestager's comments when the EU approved the Staples/Office Depot merger, which had been blocked by the FTC. This difference in approach was not a result of a lack of coordination, but rather, '[i]t only reminds us that however closely we coordinate, there will always be times when we come to different answers simply because the markets – or the remedies the companies offer to address our concerns – are different.'53 Therefore, parties should take a global approach in order to design and implement effective remedies across the various jurisdictions in which they file. Indeed, in practice, the 'younger' authorities often wait for the EU and US processes to conclude in order to mirror the remedies imposed and give effect to the remedy in a consistent manner.

Originally published by GCR

Footnotes

1 David Higbee, Djordje Petkoski and Geert Goeteyn are partners, Özlem Fidanboylu is a senior associate, and Stephanie Greco, Aleksandra Petkovic and Caroline Préel are associates, at Shearman & Sterling LLP.

2 Merger Remedies Study, dated October 2005 (The 2005 Remedies Study), p. 139, http://ec.europa.eu/competition/mergers/legislation/remedies_study.pdf.

3 For example, Dep't of Justice, Antitrust Division Policy Guide to Merger Remedies (June 2011),
www.justice.gov/sites/default/files/atr/legacy/2011/06/17/272350.pdf (DOJ Policy Guide); see also Fed Trade Comm'n, Bureau of Competition, Negotiating Merger Remedies (January 2012), www.ftc.gov/system/files/attachments/negotiating-merger-remedies/merger-remediesstmt.pdf (FTC Guidelines).

4 See, for example, DOJ Policy Guide, p. 7; FTC Guidelines, p. 6.

5 See, for example, Dep't of Justice, 'Assistant Attorney General Makan Delrahim Delivers Keynote Address at American Bar Association's Antitrust Fall Forum' (16 November 2017), www.justice.gov/opa/speech/file/1012086/download, pp. 5–9 (Delrahim Remarks).

6 Id. See also Steves & Sons Inc v. JELD-WEN Inc, No. 3:16-CV-00545-REP, Statement of Interest of the United States of America Regarding Equitable Relief (EDVa 2018), www.justice.gov/atr/case-document/file/1069011/download; Fed Trade Comm'n, 'Vertical Merger Enforcement at the FTC', Remarks of D Bruce Hoffman, Acting Dir, Bureau of Competition, Credit Suisse 2018 Washington Perspectives Conference, Washington, DC (10 January 2018), www.ftc.gov/system/files/documents/public_statements/1304213/hoffman_vertical_merger_speech_final.pdf (Hoffman Remarks) ('the FTC prefers structural remedies to structural problems'). See also Fed Trade Comm'n, 'Prepared Remarks of Chairman Simons Announcing the Competition and Consumer Protection Hearings' (20 June 2018), www.ftc.gov/system/files/documents/public_statements/1385308/prepared_remarks_of_joe_simons_announcing_the_hearings_6-20-18_0.pdf.

7 Hoffman Remarks, pp. 7–8 ('[I]t's important to remember that the FTC prefers structural remedies to structural problems, even with vertical mergers. . . . If we have a valid theory of harm, we start by looking at structural remedies for most vertical mergers.'); see also Dep't of Justice, 'The Interesting Case of the Vertical Merger', Remarks of Jon Sallet, Deputy Assistant Attorney General of the Antitrust Div, Am Bar Ass'n Fall Forum, Washington, DC (17 November 2016), www.justice.gov/opa/speech/deputy-assistant-attorney-
general-jon-sallet-antitrust-division-delivers-remarks-american ('In vertical transactions, observers sometimes assume that conduct remedies will always be available and sufficient. But that is not the current practice of the division – if it ever was. . . . Some vertical transactions may present sufficiently serious risks of foreclosing rivals' access to critical inputs or customers, or otherwise threaten competitive harm, that they require some form of structural relief or even require that the transaction be blocked.'). But see Fed Trade Comm'n, 'FTC Imposes Conditions on Northrop Grumman's Acquisition of Solid Rocket Motor Supplier Orbital ATK, Inc.' (5 June 2018), www.ftc.gov/news-events/press-releases/2018/06/ftc-imposes-conditions-northrop-grummans-acquisition-solid-rocket.

8 Behavioural remedies included anti-retaliation provisions protecting customers contracting with the firms' competitors, obligations to provide nondiscriminatory access to necessary inputs, requirements to continue to develop upgrades and invest in specific products, the creation of informational firewalls and various reporting requirements including reporting competitors' complaints. See, generally, William F Shughart II and Diana W Thomas, Antitrust Enforcement in the Obama Administration's First Term: A Regulatory Approach, CATO INST POL'Y ANALYSIS No. 739 (22 October 2013), at 14–17, http://object.cato.org/sites/cato.org/files/pubs/pdf/pa739_web.pdf.

9 See Delrahim Remarks pp7–9.

10 Complaint, United States v. AT&T, No. 17-cv-02511 (DDC 20 November 2017).

11 Id.

12 AT&T/Time Warner offered to agree to enter into 'baseball-style' arbitration in any disputes with pay-TV distributors specifically to address the government's concerns. Ted Johnson, 'Judge Will Allow AT&T-Time Warner to Use Arbitration Offer in Defense of Merger,' Variety (13 March 2018), http://variety.com/2018/biz/news/att-time-warner-antitrust-trial-arbitration-offer-1202725268/.

13 United States v. AT&T Inc, No. 1:17-cv-02511 (DDC 12 June 2018).

14 United States v. E I du Pont de Nemours & Co, 366 U.S. 316, 326 (1961). See also Ford Motor Co v. United States, 405 US 562, 573 (1972) ('The relief in an antitrust case must be "effective to redress the violations" and "to restore competition".').

15 Complaint, United States v. Halliburton Corp, No. 16-cv-00233 (DDC 2016).

16 Dep't of Justice, 'Halliburton and Baker Hughes Abandon Merger After Department of Justice Sued to Block Deal' (1 May 2016), www.justice.gov/opa/pr/halliburton-and-baker-hughes-abandon-merger-after-department-justice-sued-block-deal.

17 In the complaint filed in December 2015, the FTC alleged that Staples' acquisition of Office Depot would significantly reduce competition nationwide in the market for consumable office supplies sold to large business-to-business customers (B2B customers) for their own use. See Complaint, FTC v. Staples Inc,
No. 15-cv-02115 (DDC 2015).

18 OECD Policy Roundtables, Remedies in Merger Cases, 2011, p. 235, www.oecd.org/daf/competition/RemediesinMergerCases2011.pdf.

19 Competition policy brief entitled 'Ex post evaluation of competition policy enforcement | Competition policy brief', dated June 2015, http://ec.europa.eu/competition/publications/cpb/2015/004_en.pdf.

20 Commission Decision of 27 March 2017 in Case COMP/M.7932 Dow/DuPont.

21 Competition merger brief Issue 1/2015, 3 March 2015, http://ec.europa.eu/competition/publications/cmb/2015/cmb2015_001_en.pdf. See also Commission Decision of 16 March 2015 in Case COMP /M.7480 Teva/Allergan where the behavioural remedy was also accepted because it would eventually lead to a structural change in the market.

22 For example, Commission Decision of 16 March 2015 in Case COMP/M.7746 Teva/Allergan Generics where the competition concerns related to out-licensing were resolved through both structural and behavioural remedies depending on the situation.

23 For example, in Commission Decision of 16 March 2015 in Case COMP/M.7480 Teva/Allergan, a structural remedy was offered to deal with the vertical relationships in outlicensing involving either the upstream market (the divestment of the dossier and corresponding licensing rights across the EEA) or the downstream market (the divestments of rights and assets to manufacture and sell the molecule in the affected country). See also Commission Decision of 26 January 2011 in Case COMP/M.5984 Intel/McAfee where behavioural remedies and access remedies were considered acceptable because the straight-forward obligations could be easily monitored by the monitoring trustee.

24 For example, in Commission Decision of 25 February 2016 in Case COMP/M.7822 Dentsply/Sirona (para. 160), the EC accepted that:'In the conglomerate case at stake, remedies other than divestiture remedies appear best suited to directly address the concerns raised. Indeed, this is a case where the main concern is that Sirona's dominant position in the market for chairside CAD/CAM systems may lead to foreclosure of CAD/CAM blocks manufacturers which need access to Sirona's system in order to compete effectively on the market. The Combined Entity may withhold access to the chairside system, thus raising competition problems. In these circumstances, Commitments to grant competitors access to the CEREC system may eliminate the competition concerns.'

25 Commission Decision of 16 May 2012 in Case COMP/M.6286 Südzucker/EDFM, where the EC accepted the assignment of a long-term supply contract for raw sugar to the purchaser of a brand-new refinery in order to ensure sufficient input of raw sugar for the divested refinery. Similarly, in Commission Decision of 10 September 2014 in Case COMP/M.7061 Huntsman Corporation/Equity Interests held by Rockwood Holdings, the purchaser would be able to purchase upstream inputs on the basis of a transitional supply agreement.

26 NXP/Freescale, where the commitments maintained transitional manufacturing services for the time necessary for the set-up of the divestment business and the start of front end manufacturing via the third party foundry.

27 Commission Decision of 9 November 2016 in Case COMP/M.7917 Boehringer Ingelheim/Sanofi and Commission Decision of 8 August 2016 in Case COMP/M.7792 Konecranes/Terex.

28 For example, Commission Decision of 19 January 2015 in Case COMP/M.7278, General Electric/Alstom (Thermal Power – Renewable Power & Grid Business) (GE/Alstom).

29 Commission Notice on remedies acceptable under Council Regulation (EC) No. 139/2004 and under Commission Regulation (EC) No. 802/2004, para. 23, http://ec.europa.eu/competition/mergers/legislation/draft_remedies_notice.pdf ; and Commission Decision of 2 December 2015 in Case COMP/M.7777
Solvay/Cytec.

30 Commission Notice on remedies acceptable under Council Regulation (EC) No. 139/2004 and under Commission Regulation (EC) No. 802/2004, para. 48, http://ec.europa.eu/competition/mergers/legislation/draft_remedies_notice.pdf.

31 Competition merger brief Issue 1/2015, 3 March 2015, http://ec.europa.eu/competition/publications/cmb/2015/cmb2015_001_en.pdf.

32 For example, DOJ Policy Guide, pp. 30–33; FTC Guidelines, pp. 10–11. Note that the FTC has recently announced that it intends to give even greater scrutiny on a going-forward basis to buyer financing and any funding limitations that could hamper the buyer. See also Fed Trade Comm'n, 'Looking back (again) at FTC merger remedies' (3 February 2017), www.ftc.gov/news-events/blogs/competition-matters/2017/02/looking-back-again-ftc-merger-remedies.

33 Fed Trade Comm'n, 'FTC Seeks Public Comment on Franchise Services of North America's Application to Sell Assets Related to Simply Wheelz to Hertz and Avis Budget Group' (17 April 2014), www.ftc.gov/news-events/press-releases/2014/04/ftc-seeks-public-comment-franchise-services-north-americas.

34 Fed Trade Comm'n, 'FTC Approves Application for Modification of Divestiture Agreement Between Albertsons and Haggen Holdings, LLC' (25 September 2015), www.ftc.gov/news-events/press-releases/2015/09/ftc-approves-application-modification-divestiture-agreement.

35 Commission Notice on remedies acceptable under Council Regulation (EC) No. 139/2004 and under Commission Regulation (EC) No. 802/2004, para 103, http://ec.europa.eu/competition/mergers/legislation/draft_remedies_notice.pdf.

36 For example, DOJ Policy Guide, pp. 31–32; FTC Guidelines at pp. 10–11.

37 Curtis Eichelberger, 'Comment: Foreign conglomerates among potential acquirers of divested assets of merging agriculture giants', MLex (14 June 2016), (citing comments by former Bureau of Competition Director Debbie Feinstein) www.mlex.com/GlobalAntitrust/DetailView.aspx?cid=803441&siteid=191&rdir=1.

38 For example, DOJ Policy Guide, pp. 9, 23–24 ('In the absence of an upfront buyer, the [DOJ] must be satisfied that the package will be sufficient to attract a purchaser in whose hands the assets will effectively preserve competition.'); FTC Guidelines, p. 7.

39 The FTC has indicated that when the parties have shown that an acceptable 'buyer will emerge, that the asset package is an ongoing, stand-alone business and will maintain or restore competition in the market at issue, and that interim competition and the viability of the assets will be preserved pending divestiture, post-order divestitures have been accepted'. Fed Trade Comm'n, Frequently Asked Questions About Merger Consent Order Provisions, www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/mergers/merger-faq.

40 Flavia Fortes, 'DOJ requires upfront buyer in more than half of divestiture cases, senior official says', MLex (13 April 2018), www.mlex.com/GlobalAntitrust/DetailView.aspx?cid=981452&siteid=191&rdir=1.

41 Fed Trade Comm'n, 'Looking back (again) at FTC merger remedies' (3 February 2017), www.ftc.gov/news-events/blogs/competition-matters/2017/02/looking-back-again-ftc-merger-remedies.

42 For example, in Commission Decision of 13 October 2017 in Case COMP/M.8102 Valeo/FTE Group, Valeo pulled a previous notification one day before a decision was due and refiled it together with the updated remedies to secure Phase I clearance.

43 Competition merger brief Issue 1/2016, 21 March 2016, http://ec.europa.eu/competition/publications/cmb/2016/cmb2016_001_en.pdf.

44 Competition merger brief Issue 4/2016, 12 December 2016, http://ec.europa.eu/competition/publications/cmb/2016/kdal16004enn.pdf. See also Commission Decision of 15 December 2014 in Case COMP/M.7252 Holcim/Lafarge which involved a hybrid FIF and other remedies package.

45 Commission Decision of 9 November 2016 in Case COMP/M.7917 Boehringer Ingelheim/Sanofi Animal Health Business.

46 For example, FTC Guidelines, pp. 7–8, 12, 18.

47 For example, DOJ Policy Guide, pp. 9, 24–25; FTC Guidelines, pp. 7, 21.

48 For example DOJ Policy Guide, pp. 30–31; FTC Guidelines, p. 11.

48 GE/Alstom. This approach was possible because the purchaser was approved during the merger review as an upfront buyer and the commercial agreements were approved after.

50 FTC Guidelines.

51 Dep't of Justice, 'Remarks of Assistant Attorney General Makan Delrahim at Competition and Deregulation Roundtable #2' (26 April 2018), www.justice.gov/opa/speech/file/1057841/download, p. 6.

52 CPI Talks: Interview with Commissioner Margrethe Vestager, Commissioner for Competition of the European Union (Competition Policy International, April 2016), www.competitionpolicyinternational.com/wp-content/uploads/2016/04/Interview-with-Margrethe-Vestager-Supplement.pdf. See also Case Comp/ M.7585 NXP Semiconductors/Freescale Semiconductor.

53 Working together to support fair competition worldwide, UCL Jevons Institute Conference, 3 June 2016, https://ec.europa.eu/commission/commissioners/2014-2019/vestager/announcements/working-together-
support-fair-competition-worldwide_en.

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