Open PDF in Browser: Emma Wolters,* Courting Chaos in Market Competition: Combatting Defendants’ Incentive to Sabotage Divestiture in Antitrust Cases
The purpose of antitrust law is to preserve competition in the market. A merger can threaten that competition. When a merger attracts antitrust scrutiny from government enforcement agencies, the typical remedy is a divestiture, or sale, of assets to a third‑party buyer. This remedy may be the result of settlement negotiations with the agency or litigation. Alternatively, the merging firms may propose a divestiture before antitrust litigation begins as an attempt to mitigate antitrust concerns, referred to as litigating the fix. However, the merging firms are the ones to choose the divestiture buyer after receiving bids. Since companies are handpicking their future competitor, they have an incentive to choose the weakest buyer that they think will pass scrutiny, instead of the strongest buyer. This is evidenced by various failed divestitures where the divestiture buyer declared bankruptcy shortly after taking the assets. There have also been cases where the merging parties presented a divestiture buyer during litigation that was already doomed to fail or where there may have been a much stronger bidder. To combat this incentive, the government agencies that enforce antitrust laws—the Department of Justice (DOJ) or the Federal Trade Commission (FTC)—should promulgate a rule requiring the companies to disclose all divestiture bids that they receive. Subjecting all the bids to agency scrutiny will reduce companies’ incentive to pick a weaker buyer. Increased access to information allows enforcing agencies to more effectively juxtapose weak bidders with stronger bidders. It will also help ensure that merging firms do not succumb to the temptation to select a comparatively weak future competitor. This framework will help preserve competition by decreasing the risk of a subpar buyer while preserving divestiture as a remedy.
Introduction
Antitrust laws aim to preserve “free and unfettered competition as the rule of trade.”[1] Competition is the “process of rivalry that incentivizes businesses to offer lower prices” and improve wages and working conditions.[2] Divestiture—the sale of a company’s assets to a third party[3]—is the golden child of antitrust merger remedies.[4] But right now, it is a weak remedy.[5] The Supreme Court described divestiture as the “most effective” of antitrust remedies and an “equitable remedy designed to protect the public interest.”[6] However, merging firms are not required to pick the best divestiture buyer, and they have an obvious incentive to pick a weak one because they are picking their future competitor.[7] In antitrust cases involving mergers, and particularly horizontal mergers, divestiture is the most common remedy.[8]
But divestiture is no longer just a remedy that government antitrust enforcers and courts impose on merging firms. It is increasingly common for the companies hoping to merge to propose a divestiture agreement prior to or during antitrust investigation and antitrust litigation, which is referred to as litigating the fix.[9] Divestitures are also a major component of settlements (referred to as either consent decrees or orders) between government enforcers[10] and companies.[11] They are common in these consent decrees because divestiture is the most common remedy, and most antitrust cases with the Federal Trade Commission (FTC) are settled by a consent decree or order.[12] A consent decree is a voluntary agreement that settles the antitrust concerns raised by the government enforcer.[13] Whether a divestiture is successful “depends on transferring the business to an appropriate buyer.”[14]
Currently, the merging companies are the ones who get to cherry‑pick the divestiture buyer and which assets they divest to it.[15] There is no requirement that merging firms pick the best buyer out of all the bids they receive.[16] Instead, the FTC’s statement on negotiating merger remedies focuses on choosing an “acceptable” buyer.[17] The statement defines an acceptable buyer as “competitively and financially viable.”[18] The divestiture should restore competition lost by the merger.[19] But the acquiring company has an obvious incentive to both pick the weakest divestiture buyer that it reasonably thinks would survive an antitrust investigation and provide this buyer with a weak set of assets so that the divestiture buyer cannot compete as effectively with the merged entity.[20] In an FTC study of divestiture remedies, 25 percent of divestitures post‑merger failed,[21] demonstrating the need for a better system of picking a divestiture buyer to ensure a merger is not anticompetitive.[22]
The divestiture process is currently a weak remedy due to the disproportionate power between the government and companies, as well as the incentives at play.[23] To change these incentives, the FTC should require merging companies to disclose all the divestiture bids that the merging entity receives. The requirement will disincentivize the companies from picking a weak divestiture buyer and increase the likelihood of divesting to the strongest buyer.[24] The court should be the ultimate decision‑maker as to the sufficiency of the divestiture as a remedy, and if it is sufficient, the court may decide whether the proposed buyer will counter the anticompetitive effects of the merger.[25] This, in turn, requires considering a process by which courts and government enforcers evaluate divestiture buyers and whether a divestiture buyer is sufficiently capable during litigation.[26]
This Note proceeds in the following parts accordingly: Part I explains federal and state antitrust law as it relates to mergers. It also explores how courts currently evaluate mergers in antitrust cases brought by the government, including in litigating the fix cases where a divestiture is considered at the outset of trial. This Part also considers arguments for abandoning divestiture as a remedy altogether. Then, the discussion in Part II revolves around how defendants currently pick divestiture buyers. Next, Part III explains why the way defendants currently select divestiture buyers is detrimental to competition and outlines examples of how perverse incentives can lead to disastrous effects on competition when divestiture buyers fail. Finally, Part IV proposes a solution for this problem and describes the mechanics and rationale behind giving courts and government enforcers a say in which company is selected as the divestiture buyer. Specifically, it envisions a new rule requiring defendants to produce all divestiture bids, thereby providing more leverage for the enforcement agency and the court to reject a divestiture.[27]
An Overview of Antitrust Law Governing Horizontal Mergers
Antitrust law is a mix of statutory and caselaw.[28] Consumer welfare—the idea that antitrust law should strive to make people better off—is the prevailing concept of what should guide antitrust law and policy in the modern era.[29] For example, if consumers have to pay more for a product that they want, their welfare is harmed.[30] First, Section I.A will describe the predominant federal statutes covering antitrust. Second, Section I.B covers state antitrust statutes. Third, Section I.C reviews case law in merger antitrust litigation, including how the court determines whether a merger may lessen competition. Finally, Section I.D discusses the value of divestiture as a remedy to an anticompetitive merger.
Federal Antitrust Laws
The original purpose of antitrust laws was to protect competition, which would then protect consumers from noncompetitive pricing as well as preserve open markets and disperse economic and political power.[31] There are two main federal laws that cover antitrust law enforcement: the Sherman Act of 1890 and the Clayton Act of 1914.[32] The Clayton Act addresses anticompetitive mergers and acquisitions.[33] Specifically, section 7 of the Clayton Act prohibits mergers and acquisitions where the effect “may be substantially to lessen competition, or to tend to create a monopoly.”[34] Congress passed the Clayton Act in part to prohibit anticompetitive practices at earlier stages than the Sherman Act—before companies merge.[35] A merger may lessen competition by tending to create a monopoly in a certain market.[36] This can deprive the public of the benefits of competition between the two businesses planning to merge, which may include lower prices, better wages for employees, innovation, and other benefits.[37] By stopping a merger before it happens, the government can ensure that these benefits of competition are protected.[38]
The FTC and the Department of Justice (DOJ) enforce these federal antitrust laws.[39] The FTC may first attempt to enter into a consent order with the company, where the company agrees to voluntarily take actions to address the anticompetitive effect.[40] If the FTC and the merging firms cannot reach an agreement, the FTC can initiate an administrative complaint or file a suit for injunctive relief.[41] The DOJ similarly may choose to enter into a consent order or bring a lawsuit against the merging parties.[42]
The Clayton Act was amended by the Hart‑Scott‑Rodino Antitrust Improvements Act of 1976 (HSR), which requires merging entities of a certain size to notify the government of their plans to merge.[43] The Premerger Notification Office of the FTC administers this process for both the FTC and DOJ.[44] This premerger notification is crucial in antitrust law enforcement because mergers are difficult to undo.[45] In 2024, after undergoing the rulemaking process, the FTC, with the concurrence of the DOJ, issued a final rule amending the Premerger Notification Rules under HSR.[46] This rule required companies to provide additional information to the enforcing agency, such as business plans, existing competition between the merging firms, and investors in the buyer.[47] In litigating the fix cases, companies may either need to disclose details about the proposed divestiture in their original HSR filing, or the FTC may even require a separate filing.[48]
After the parties file their notice, either the DOJ or FTC will handle the matter based on respective experience with the industry.[49] The DOJ and FTC determine which agency will investigate the merger through a process called clearance.[50] The predominant factor considered during clearance is agency expertise.[51] For example, the DOJ has sole jurisdiction in telecommunications, banks, railroads, and airlines[52] whereas the FTC often handles mergers involving health care, pharmaceuticals, professional services, food, and energy.[53] This clearance process, or waiting period, is typically thirty days.[54] If the enforcing agency still has concerns at the end of the waiting period, it will issue a second request[55] and will initiate further investigation.[56] At this stage, the companies attempting to merge must produce extensive documentation and data.[57] This may include price lists, costs involved in production and sale of relevant products, and all promotional materials for relevant products.[58]
After this investigation, the government will likely either enter into a negotiated consent agreement or file for a preliminary injunction in federal court pending an administrative trial on the merits.[59] If the merging company proposes a divestiture to a certain company, the agency does not receive information about any third‑party companies that may have bid on the divestiture.[60] This creates information asymmetry between the merging company and the agency.[61]
State Antitrust Laws
In addition to the federal laws, many states have their own antitrust statutes. Often, these statutes are substantially similar to their federal counterparts.[62] For example, section 7 of the Clayton Act specifies that it is prohibited for a person to:
acquire, directly or indirectly, the whole or any part of the stock or other share . . . of the assets of another person engaged also in commerce or in any activity affecting commerce . . . [where] the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly.[63]
Colorado’s comparable antitrust statute specifies:
It is illegal for any person engaged in trade or commerce to acquire, directly or indirectly, the whole or any part of the stock, other share capital, or assets of another person engaged in trade or commerce if the effect of the acquisition may substantially lessen competition or tend to create a monopoly.[64]
A state government can enforce both the state’s own antitrust statute and the federal antitrust statutes through its attorney general.[65] State attorneys general also may coordinate with the FTC or DOJ in antitrust suits and investigations.[66] For example, the state attorney general might share information with the federal agencies while both agencies conduct an investigation into a transaction.[67] This maximizes efficiency by ensuring that both the federal and state agency receive the information without duplicating work.[68] Historically, it has been uncommon for states to challenge mergers, as it can cost millions of dollars to challenge a transaction and agencies are commonly constrained by budget and resource issues.[69] But there are indications that this is changing.[70] For example, in 2024, the Colorado Attorney General and Washington Attorney General filed separate suits in their respective state courts challenging the merger of supermarket chain giants Kroger and Albertsons under state antitrust law.[71]
Courts’ Interpretations of Antitrust Law
Courts have developed standards and tests for interpreting the antitrust laws.[72] The Supreme Court has found that the legislative history of the Clayton Act “illuminate[d] congressional concern with the protection of competition, not competitors.”[73] Given the future nature of a proposed merger, a court’s antitrust analysis “requires a prognosis of the probable future effect of the merger.”[74] The Court’s analysis of the future effect of a merger necessitates an evaluation of the “probabilities, not certainties” that the effect of the merger “may . . . substantially . . . lessen competition.”[75] This standard creates a “difficult puzzle” for courts to determine what may affect competition, made more difficult by the need to determine how the plaintiff meets the burden of proving this effect by a preponderance of the evidence.[76] While most litigation considers past harm, a court hearing a merger case must consider what might happen in the future.[77]
Before considering whether the effect of the merger may substantially lessen competition, the court must consider where that competitive harm may occur. Thus, an analysis of a merger starts with defining the relevant market.[78] There are two markets that make up the relevant market: the product market and the geographic market.[79]
The product market is the products and services that the two merging companies compete over.[80] Whether the two companies compete with these products is based on whether these products are “reasonable substitutes.”[81] The case Brown Shoe Co. v. United States articulated how courts may conduct a qualitative assessment of the product market.[82] Courts look to factors referred to as the “Brown Shoe indicia” in determining the relevant product market, which include “industry or public recognition of the submarket as a separate economic entity, the product’s peculiar characteristics and uses, unique production facilities, distinct customers, distinct prices, sensitivity to price changes, and specialized vendors.”[83] For example, while assessing the “industry or public recognition” factor, the district court in United States v. Google LLC looked at how other industry players, like advertisers, viewed Google’s search engine compared to other products, such as social media platforms.[84] In part because the industry viewed general search services as a distinct product, the court found that that the product market was general search engines.[85] As the opinion here noted, courts assume that “economic actors usually have accurate perceptions of economic realities” and thus industry players treating products as distinct is evidence that narrows the product market.[86]
The geographic market is the geographic area in which defendants compete.[87] The importance of the geographic market depends on the product, such as if the product is hard to transport or requires the customer to travel to obtain it.[88] For example, in Justice Harlan’s concurring opinion in United States v. Pabst Brewing Co.—which considered the Pabst’s acquisition of Blatz Brewing—he described how the State of Wisconsin was the relevant geographic market, instead of a three state area around Wisconsin, considering that competition between breweries was dominated by local suppliers and it would take Wisconsin‑specific investment to enter into the state.[89]
How the relevant market is defined is a vital aspect of the antitrust analysis because the legality of the proposed merger “almost always depends upon the market power of the parties involved.”[90] Thus, in any cases considering a divestiture, the market share that the divestiture buyer brings to the table is necessarily important in their ability to counter the anticompetitive effects of the merger.[91]
Next, courts utilize a burden‑shifting framework to decide whether the effect of the merger may substantially lessen competition in the defined product and geographic market. Courts approach the ultimate determination of whether a merger may substantially lessen competition under the burden‑shifting framework described in United States v. Baker Hughes.[92] In this case, the court considered a potential merger between two companies that were involved in the hardrock hydraulic underground drilling rig market.[93] To determine whether the effect of the merger may substantially lessen competition, the burden starts with the plaintiff.[94] When a government enforcement agency, such as the FTC, DOJ, or state attorney general, challenges a proposed merger in court, it first must establish the prima facie case that there is a reasonable probability that the merger will be anticompetitive.[95] That requires the government showing a probability of “undue concentration in the market for a particular product in a particular geographic area.”[96] It must show undue concentration in the product market and the geographic market.[97] If it establishes the prima facie case, then there is a “presumption that the merger will substantially lessen competition”[98] and the burden then shifts to the defendant to produce evidence to rebut this presumption.[99] If the defendant rebuts the presumption, then the burden shifts back to the government to produce additional evidence of anticompetitive effects.[100] The burden of persuasion remains with the government throughout the burden shifting.[101]
In litigating the fix cases, however, courts have not definitively established whether the government, at the prima facie case stage of burden shifting, must show a reasonable probability that the merger will be anticompetitive with the divestiture or without the divestiture.[102] In some cases, courts found that the government could establish its prima facie case based on the original merger that the defendants proposed pre‑divestiture.[103] If the government establishes its prima facie case, it is then up to the defendants to rebut this presumption that the merger will substantially lessen competition with evidence that the divestiture will counter the anticompetitive effects.[104] “The more compelling the prima facie case, the more evidence the defendant must present to rebut it successfully.”[105] If the divestiture successfully rebuts this presumption, then the burden shifts back to the government to produce additional evidence of the anticompetitive effects even with the divestiture.[106]
In United States v. UnitedHealth Group. Inc., the federal district court adopted this framework of analyzing the divestiture as part of the defendant’s rebuttal but also critiqued it as inconsistent with Baker Hughes.[107] There, the court found that analyzing the divestiture as part of the rebuttal shifts the burden of persuasion to defendants to prove that there will be no competitive harm with the divestiture, which would run afoul of section 7 of the Clayton Act and Baker Hughes.[108] By evaluating the divestiture as rebuttal evidence, the court reasoned that this required the defendant to prove that the divestiture would preserve the same level of competition premerger, which would effectively erase the word “substantially” from section 7.[109] The court only adopted the government’s framework because the end result in this particular case—that the divestiture would restore the lost competitive intensity—was the same whether it accounted for the divestiture during the prima facie case or considered it first at the rebuttal stage.[110] Although there is not a consensus among district courts on where to factor the proposed divestiture into the burden‑shifting framework, antitrust scholars Steven Salop and Jennifer Sturiale recommend allowing the government to establish its prima facie case without considering the divestiture and then placing the burden on the defendant to show that the divestiture rebuts the government’s prima facie case.[111] Adopting this version of the burden shifting accounts for concerns about false negatives (allowing a merger that violates the Clayton Act to proceed) and reflects the reality that merging parties have an incentive to choose divestiture buyers that will compete less intensely than the two companies competed premerger.[112]
The Viability of Divestitures as a Remedy
Given the issues with past divestitures in merger cases, including the concern about the incentive mentioned above, there remains a debate over whether divestiture should be considered a remedy altogether, and if courts and government enforcers should instead strive to enjoin mergers.[113] Excessive market power is a current and serious problem in the United States.[114] While the original purposes of antitrust laws were to protect consumers and small businesses, preserve open markets, and disperse economic and political power, that changed in the mid‑ to late 1900s.[115] The Reagan Administration reframed the goals of antitrust to instead focus on economic efficiency[116] and promote increasing corporations’ market power as opposed to encouraging competitive markets.[117] In this era, the DOJ, FTC, and the Supreme Court abandoned stricter rules for evaluating antitrust cases and instead adopted defendant‑friendly, open‑ended standards.[118] For mergers specifically, this included the view that as long as the conduct did not impair efficiency or increase prices, it was not an antitrust violation, regardless of the effects on consumers or competitors.[119] In the Reagan era, the head of the DOJ’s Antitrust Division and the FTC, as well as newly appointed federal judges, subscribed to this ahistorical view of antitrust law.[120] Given the shift toward favoring defendants in antitrust matters and the popularity of divestiture as a remedy, it is clear that courts and government enforcers should seriously consider whether to agree to a divestiture as a remedy in a given case, or if the merger should be enjoined altogether.[121] However, given the popularity of divestiture as a remedy in antitrust cases, and the increasing number of litigating the fix cases, divestiture is likely not going away anytime soon.[122] As the Supreme Court put it: “Divestiture has been called the most important of antitrust remedies. It is simple, relatively easy to administer, and sure. It should be in the forefront of a court’s mind when a violation of [section] 7 has been found.”[123]
Moreover, divestitures can keep another competitor in the marketplace that would have been lost.[124] Successful divestitures have had one thing in common: a strong buyer.[125] For example, in the merger between beer powerhouses Anheuser‑Busch InBev and Grupo Modelo, the DOJ required the companies to divest Modelo’s entire U.S. business to Constellation Brands, Inc. Constellation had a portfolio of over one hundred products, including SVEDKA Vodka—showing that Constellation had successful operations in the alcohol market and the capability to add another major brand name to their portfolio.[126] Today, Constellation still sells the brands that it received in this divestiture, including Modelo, which is the best selling beer in the United States.[127] Because of this divestiture, the companies were able to merge, while still preserving a strong competitor.[128] This likely would not have been the case if the companies selected a weaker buyer that did not have Constellation’s capabilities. A weaker buyer may have failed, leaving only one competitor in the marketplace—the merged Anheuser‑Busch InBev and Grupo Modelo firm—and less competition among alcohol and beer sellers, and in turn, higher prices for consumers.
Given the potential benefits and popularity of divestiture as a remedy, even if enjoining mergers better serves antitrust goals, it seems unlikely that such a large shift in antitrust remedy approaches will happen anytime soon.[129] Therefore, it is necessary to consider ways in which agencies and courts can reform the divestiture process to serve the original goals of antitrust law. This proposed framework of giving enforcers access to all bids, while maintaining their ability to enjoin mergers altogether, may serve as a more palatable option as opposed to doing away with divestiture as a remedy.
Potential Remedies
When a merger may be anticompetitive, the court or investigating agency can impose remedies.[130] Merger remedies generally fall into two categories: behavioral and structural remedies.[131] Behavioral remedies include any remedy that is an instruction to either affirmatively do something or refrain from doing something.[132] These remedies can come with concerns that they put the onus on the agency to continue monitoring the companies.[133] If a party violates this order, then the agency must bring an enforcement action, which requires the agency to demonstrate that a violation occurred and may take extensive time and resources to litigate.[134] Therefore, structural remedies are the starting point.[135]
Structural remedies are orders to spin off or divest a certain part of the business.[136] This is the default remedy in merger cases because it is a “surer, cleaner” solution.[137] Agencies consider divestiture cleaner because it is safer to eliminate the company’s ability to engage in harmful conduct by ensuring that it does not have too much market power rather than attempt to police its behavior by threatening penalties.[138] The monitoring involved with behavioral remedies is also expensive and takes continued resources.[139]
Sometimes, courts and agencies combine structural and behavioral remedies to ensure the effectiveness of a divestiture.[140] For example, the government or court may require an entity to divest and also provide transitional support for the divestiture buyer.[141] This can include services and support related to information technology systems, supply chain management, marketing, and use of trademarks or trade names for transitional purpose.[142] Ultimately, divestiture is still the strongest remedy available in merger cases and the preferred remedy of courts and government agencies alike.[143]
Despite valid concerns about divestitures, this remedy remains a powerful tool for courts and the antitrust enforcement agencies in anticompetitive mergers. Even though the divestiture is the most common remedy, there are still considerations for how the agencies and courts analyze divestitures.[144] This includes how courts apply the burden‑shifting framework in litigating the fix cases and, as discussed below, how to empower agencies to require a better divestiture buyer.
How Defendants Pick Divestiture Buyers
The structural remedy of divestiture involves a defendant‑friendly framework.[145] Under the current framework, the defendants pick the company or entity that they propose to divest certain assets to.[146] Companies find divestiture buyers by hiring investment banks or by conducting a search in‑house.[147] During this search, a company may look at “competitors, suppliers, or anyone else within [its] ecosystem.”[148] This often happens through a bidding process, where the companies have a chance to evaluate different buyers and packages proposed by interested buyers.[149]
Once the search concludes, there is no requirement that merging entities pick the strongest divestiture buyer.[150] During the trial of State v. Kroger, in which the Colorado Attorney General initiated a lawsuit under the Colorado antitrust statute to challenge Kroger’s proposed merger with Albertsons, Kroger CEO Rodney McMullen testified that he would be “shocked” if Kroger’s chosen divestiture buyer, C&S, was a weaker competitor than Albertsons.[151] While McMullen may have believed that C&S would compete at the same level as Albertsons, he also admitted that “technically” Kroger had an incentive to pick a weak divestiture buyer to compete with Kroger in the future.[152] Leaning into that incentive and picking a weaker buyer results in weaker competition in the given market, which cuts against the purpose of antitrust law—to protect consumers from noncompetitive pricing and preserve open markets.[153]
This Part will discuss how merging companies have an incentive to pick a weak divestiture buyer. Then, the Part considers a case study—the proposed Kroger and Albertsons merger. This merger case exemplifies the incentive to pick a weaker buyer, even when agencies are investigating the merger.
Incentive to Pick a Weak Buyer
It is a “common sense assumption” that merging companies attempting to mitigate antitrust concerns “tend to choose the most marginally acceptable buyer.”[154] This common sense assumption is supported by the FTC’s study evaluating divestiture remedies in merger cases.[155] In this study, the FTC conducted interviews with both divestiture buyers and the sellers from the Commission’s divestiture orders between 1990 and 1994.[156] These divestitures were not from litigating the fix cases (which have gained popularity more recently) but rather stemmed from the Commission’s orders to divest as a remedy to an otherwise anticompetitive merger.[157] However, in both litigating the fix cases and divestitures stemming from an order, the merging company picks the divestiture buyer.[158] The FTC found that its interviews with buyers supported the assumption that merging firms do not choose the strongest buyer.[159] Buyers cited concerns that the merging entity chose them in part because of their weakness.[160] As such, in this process of picking a divestiture buyer, the buyers were at a substantial disadvantage even when the seller was forced to divest.[161] Tellingly, the interview results suggested that the merging entities hoped that the buyers would fail, and they could in turn exploit their assets.[162] This exploitation could look like buying back the assets originally divested, such as in the Albertsons and Safeway merger.[163]
The study also bore out the FTC’s assumption that the merging firms may take actions to make the divested assets less competitive or choose a buyer that will struggle to compete—whether that be because of a more malicious strategy to sabotage their newly handpicked competitor or because of simple indifference.[164] For example, in one case that the FTC reviewed, the merging firm chose a startup company as the buyer.[165] The startup reported to the FTC that it believed it was chosen because it had no operational experience.[166]
The FTC changed some of its practices to address the concerns found in this study, including shortening the divestiture period[167] and requiring upfront buyers[168] more frequently.[169] A subsequent FTC study following these changes still found potential gaps and risks that had the ability to adversely affect merger remedies.[170] Despite attempts to address the incentive that undercuts the purpose of divesting (to restore competition), companies continue to have an incentive to pick a weak buyer.[171] As a July 2024 Financier Worldwide article noted, a “buyer that is willing to commit to non‑competition with the seller’s primary market rivals may be preferable”—indicating that companies strive to undermine competition from their divestiture buyer.[172]
It is of particular note that the FTC studies on divestitures found significant weaknesses in the divestiture process even when the seller was forced to divest via order.[173] In fact, the FTC assumed in its study that divestiture buyers had the specific “advantage of bidding on a compulsory divestiture that must be accomplished within a stated period of time at no minimum price.”[174] It follows that in litigating the fix cases—when the seller, on its own volition, chooses a divestiture buyer without a direct order from government enforcers to do so—this divestiture bidding and subsequent negotiations would be even more uneven. In these cases, the seller has more leeway in terms of timing and does not actively have a government enforcer reviewing the transaction at that time.[175] One might argue that the threat of an antitrust suit and the FTC merger process balances this out, because this process encourages merging firms to choose the best buyer regardless of when they choose this buyer.[176] However, even though there might be some incentive to choose a better buyer, merging firms may still prioritize choosing a buyer that will not be the most effective competitor.[177] Such prioritization suggests that combating this incentive structure calls for a more drastic change in the divestiture buyer selection process.
A Case Study: The Problematic Divestiture Buyer in the Kroger and Albertsons Proposed Merger
On October 14, 2022, the supermarket chains Kroger and Albertsons announced their proposed merger for $24.6 billion, with Albertsons merging into Kroger.[178] Both companies had amassed market share in prior years by acquiring competitors, including store banners such as Safeway,[179] Ralphs, and King Soopers.[180] Kroger and Albertsons, likely anticipating an uphill battle for government approval, took a litigating the fix approach.[181] Kroger selected C&S Wholesale Grocers as a divestiture buyer following a competitive bidding process.[182] C&S was predominantly a wholesaler but had some experience in operating retail stores.[183] Beginning in 2001, C&S acquired approximately 220 grocery stores, but by 2005, it had sold around 190 of those stores.[184] It then purchased another 105 grocery stores, but by 2006, nearly half of these were closed down.[185] In 2012, C&S sold all but three of its remaining stores.[186] Its business model seemingly shifted again in 2021 when it began acquiring more stores, and by the time of the Kroger and Albertsons merger case, C&S operated roughly twenty‑five grocery stores.[187] However, at the time of the proposed divestiture, the stores C&S owned were struggling financially.[188]
The divestiture agreement proposed giving C&S a whopping 579 stores, which was a 2,216 percent increase from its twenty‑five current stores.[189] By acquiring these stores, C&S would also take on the responsibility of operating pharmacy and fuel centers common to many Kroger and Albertsons stores, despite only paltry experience running both previously.[190] Unsurprisingly, this attracted the attention of the FTC and states’ attorneys general after Kroger submitted HSR filings.[191] The FTC (in federal court), the State of Washington (in Washington state court), and the State of Colorado (in Colorado state court) all filed separate suits challenging the merger.[192]
The federal district court in Oregon granted the FTC’s request for a preliminary injunction of the merger.[193] The court found that the divestiture to C&S would not mitigate the merger’s anticompetitive effects, relying in part on “serious concerns” with C&S’s capabilities.[194] In so finding, the court cited C&S’s various red flags, including poor performance at its current stores, weak private label sales, and lack of sufficient manufacturing facilities.[195] In addition to the concerns about C&S’s ability to effectively compete in the supermarket business, the court also discussed issues with the package of assets that Kroger and Albertsons were divesting—which included a mix of stores, banners, and private labels and did not represent a standalone, fully functioning company.[196] Additionally, the court noted that C&S’s dependence on the merged firm for support for years following the merger’s consummation was a red flag.[197]
Meanwhile, in Washington state court, the judge ruled on the merits of the case, finding that the merger violated Washington state antitrust law.[198] Colorado state court dismissed the case after the federal court and Washington state court orders, finding the issue moot by that point.[199] Following the court orders blocking the proposed merger, Kroger and Albertsons terminated the merger agreement.[200] Albertsons then filed suit against Kroger, claiming that Kroger “refused to divest assets necessary for antitrust approval, ignored regulators’ feedback and rejected strong buyers of stores it had planned to divest.”[201] Ninety‑two parties originally expressed interest in purchasing divested stores, including potentially Aldi and Save‑Mart.[202] If Aldi was a bidder, this begs the question of why Kroger and Albertsons chose C&S, which operates just a few dozen stores with a track record of store closures,[203] over Aldi, which operates about 2,400 stores.[204]
This failed merger is an example of companies picking a buyer that may not have been the strongest option, potentially for fear of creating too strong a competitor. In this case, the gamble of picking a weaker buyer did not pay off because the court rejected the merger.[205] However, if Kroger and Albertsons had their way, C&S would have taken over 579 grocery stores across the country.[206] Because the court found significant concerns with C&S’s ability to operate these stores effectively, this could have had disastrous effects on competition and consumers.[207] Specifically, if C&S shuttered stores because it was not able to manage this level of expansion, this would have taken a supermarket competitor out of the market, leaving consumers with less options and potentially emboldening the remaining stores to raise prices.[208] In fact, the federal court found that the plaintiffs showed that a loss of the head‑to‑head competition between Kroger and Albertsons would incentivize price increases in the market.[209] Whereas a strong buyer may have created a competent market competitor, the buyer handpicked by Kroger here could have caused chaos in the market, contrary to the purpose of antitrust laws—to foster competition and protect consumers.[210] The Kroger and Albertsons case is a recent example of how companies often cannot resist the temptation to pick a subpar buyer because of the incentives at play.
Detrimental Effects of Unilateral Selection of a Divestiture Buyer on the Remedy
The merging firms have an incentive to choose a subpar buyer, and their choice of buyer causes massive issues in creating an antitrust remedy that will restore competition lost by a merger.[211] Merging firms’ choice of a weak buyer is detrimental because the identity of the divestiture buyer is of paramount importance in an antitrust remedy.[212] This Part discusses how antitrust authorities, including the Director of the Bureau of Competition and FTC Commissioners, highlight the importance of divestiture buyers and the weaknesses of the current divestiture framework. To expand upon that point, Sections III.A through III.C cover three examples of disastrous, or potentially disastrous, divestitures.
The Director of the Bureau of Competition, in a speech to the Global Competition Review, identified the important aspects of “maintaining or restoring competition”: who the divestiture buyer is, the circumstances of the acquisition, and the assets divested.[213] Antitrust literature indicates that there is a need for more effective remedies to restore competition, and the current structural remedies fail to effectively preserve competition after a merger goes through.[214] In fact, in a paper authored by former FTC Commissioner Lina Khan, she suggested that divestitures are not a strong enough remedy and anticompetitive mergers should be enjoined altogether.[215] Two cases specifically demonstrate the weakness of divestiture as a remedy currently: the Albertsons and Safeway merger and the Hertz and Dollar Thrifty merger.[216] Additionally, the United States v. Aetna case serves as an example of divestiture in a litigating the fix scenario where there were clear red flags with the divestiture buyer (that fortunately the court caught) but the seller proceeded with them anyway.[217] Given the failure of the current divestiture framework, and as outlined in the following three examples, significant change is warranted to preserve it as an effective remedy.[218]
The Albertsons and Safeway Merger
The merger between Albertsons and Safeway is a prime example of a failed divestiture and shows why the current divestiture process in mergers subject to antitrust investigations needs a shift. In 2014, Albertsons announced that it planned to buy Safeway, a fellow major supermarket chain.[219] In the initial deal announcement, the Albertsons CEO said the company did not expect to close any stores.[220] The FTC initiated an investigation into this merger, and the parties later entered into a settlement agreement to resolve the case.[221] As part of this settlement agreement, the parties agreed to divest 168 stores in certain anticompetitive markets.[222] Of these 168, Haggen Holdings, LLC (Haggen) acquired 146 stores in Arizona, California, Nevada, Oregon, and Washington.[223] Before the merger, Haggen was a regional grocery chain that operated only eighteen stores.[224] A private equity firm had a majority stake in the company.[225] Private equity refers to a private organization that buys out companies that are struggling or have growth potential.[226] Private equity generally prioritizes its own profits over the long‑term health of the company it buys.[227] “The controversy surrounding private equity is that whatever happens to the company acquired, private equity makes money anyway.”[228]
Even though this was a rapid expansion for Haggen, the FTC approved this divestiture scheme.[229] This turned out to be a mistake. Haggen went bankrupt less than a year after the merger.[230] The bankruptcy court found that Haggen was a weak buyer, citing the lack of preparedness and capability to take on so many stores.[231] The court also specifically noted that Haggen originally only bid on twenty‑two stores in Washington state and Oregon, where the company already operated.[232] The number of stores Haggen acquired only drastically increased at the urging of Albertsons and Safeway, who told Haggen that it would need to bid on more stores in more states to remain competitive.[233]
The perplexing question of why a firm with eighteen stores thought that it could successfully expand to a multistate firm operating 168 stores is answered by taking a closer look at the deal Albertsons offered Haggen.[234] It structured the deal such that Haggen could sell the property of the stores to a separate buyer and rent them from that buyer, known as a sale leaseback.[235] The real estate from the deal was appraised at $118 million.[236] After the deal was consummated, Haggen broke up into ten distinct entities to separate the real estate assets from its liabilities.[237] The intent of this siloing of assets and liabilities was to keep the value of the real estate separate from the company’s operational liabilities—so in the event of bankruptcy, they would keep the value of the real estate regardless.[238] The amount Haggen stood to gain from the real estate value was simply “too juicy” to pass up.[239]
During the negotiating process, Albertsons and Safeway were well aware of the significant risks this transaction posed to Haggen—their own advisors informed them of specific issues with pricing, labor costs, re‑bannering stores, and rewards card programs for Haggen.[240] But the parties were not particularly forthcoming about their knowledge of these risks with the FTC.[241] Rather, Haggen provided the FTC with a business plan and projections that did not include the negatives or analysis of a “downside case” that showed what would happen if Haggen had barely any liquidity.[242] If the FTC had all this information at the outset, along with information on other potential bidders, it may have been able to more readily identify issues with Haggen and this deal. This alone highlights the risk of letting merging firms pick what appears to be a minimally sufficient divestiture buyer.
The divestiture to Haggen went on to fail spectacularly—for employees and consumers, that is.[243] On January 27, 2015, the FTC issued its order directing Albertsons and Safeway to divest stores.[244] In February 2015, Haggen began closing on stores.[245] The bankruptcy court encapsulated the failure: “Haggen’s demise was swift, began immediately, and continued unabated for seven months, ending in its September 2015 bankruptcy filing and complete liquidation.”[246] This resulted in lost jobs for store employees.[247] And consumers in vulnerable areas had a harder time getting groceries after certain stores closed.[248] The impact was so drastic that in one low‑income area, a city changed bus routes so that its residents could access a grocery store in another town.[249] Ultimately, Haggen sued Albertsons after filing for bankruptcy, alleging that with the divestiture “Albertsons sought to eliminate Haggen as a viable competitor.”[250]
Albertsons, after encouraging Haggen to take on this deal, did not suffer repercussions and made out better than it would have if Haggen had succeeded. Out of all of the stores Albertsons divested per the agreement with the FTC, only half of them are still standing and competing with Albertsons.[251] Albertsons actually bought back forty‑four of the stores it originally divested to Haggen[252] in addition to fourteen of Haggen’s original stores—some of which it bought for one dollar.[253] Other locations permanently closed or became hardware stores, gyms, or other stores that do not compete in the grocery industry.[254] Former FTC Commissioner Lina Khan noted that the divestiture, meant to assuage antitrust issues, backfired as Albertsons both received more stores than the FTC originally approved and lost Haggen as a competitor.[255]
From this example, it is clear that the current process of the merging firm selecting the divestiture buyer is an ineffective way to maintain competition after the merger. The FTC likely did not have access to all of the bids, knowledge of other potential buyers, what asset packages were on the table, and the true rationale for picking Haggen.[256] If the FTC had all of this information, there is a possibility that the harms and shortcomings in the Albertsons and Safeway merger could have been prevented by the regulators.
The Hertz and Dollar Thrifty Merger
The Hertz and Dollar Thrifty merger serves as another example of what can go wrong when merging companies pick a subpar divestiture buyer. In 2012, Hertz and Dollar Thrifty, two rental car companies, reached an agreement for Hertz to acquire Dollar Thrifty for $2.3 billion.[257] The FTC claimed that the merger, without a divestiture, would have harmed competition at over seventy airports in the United States by “reducing the number of competitors, diminishing future competition, and enabling the combined firm to raise rental car prices for consumers.”[258] At the time of the merger, Hertz had a market share of 26 percent of airport car rentals, and Dollar Thrifty had a market share of 12 percent.[259] Hertz, Dollar Thrifty, and only two other rental car companies dominated the U.S. airport car rental market, accounting for 98 percent of total airport car rentals in the country.[260] This complaint by the FTC claimed violations of section 5 of the Federal Trade Commission Act of 1914 (FTC Act)[261] and section 7 of the Clayton Act in certain airport rental car markets.[262]
Because of the anticipated anticompetitive effects of the proposed merger, the FTC required that Hertz divest its Advantage Rent A Car business and the rights to operate twenty‑nine Dollar Thrifty airport locations.[263] Hertz divested Advantage Rent a Car to Franchise Services of North America, which was a small rental car operator, and Macquarie Capital, a private equity company that provided funding for the purchase.[264] The divestiture business, Advantage Rent a Car, then became the company Simply Wheelz.[265] The FTC approved this divestiture, citing that the new Advantage company would replace current and future competition that was lost and that the new company would become the fourth‑largest car rental competitor in the United States.[266]
It was unclear how much the FTC knew about potential problems with the divestiture prior to approving the settlement.[267] Although an executive from Advantage, following bankruptcy, claimed that he told the FTC that there were financial troubles with the company, the Wall Street Journal reported that FTC officials received contrary, positive information about the financial situation at Advantage.[268] As a result, only one FTC Commissioner, J. Thomas Rosch, voted against the settlement, expressing concerns that the divestiture was inadequate to resolve the anticompetitive effects.[269] If the Commission had access to more information about the potential bidders, it is possible that more commissioners would have joined Commissioner Rosch in voting against the settlement and requiring the companies to choose a stronger divestiture buyer.[270] For example, if the FTC knew that there was another, stronger bidder, it could have used that information as leverage during negotiations with Hertz or as evidence against the chosen buyer during litigation.[271] Hertz may not have chosen the company that became Simply Wheelz, knowing that the FTC would be able to identify a more competitive buyer.[272] Instead, based on the information provided about Simply Wheelz, the FTC placed its faith in Hertz’s cherry‑picked future competitor.[273]
It would indeed turn out that the FTC’s hopes for the divestiture were misplaced, and it all came crashing down just months after the deal went through.[274] Four months after the FTC‑approved deal went through in July 2013, Simply Wheelz filed for chapter 11 bankruptcy.[275] In bankruptcy filings, similar to how Haggen blamed Albertsons for causing the divestiture failure, Simply Wheelz blamed Hertz.[276] Specifically, Simply Wheelz alleged that Hertz overvalued the fleet of 24,000 vehicles it leased to Simply Wheelz as part of the divestiture agreement.[277] This lease agreement required Simply Wheelz to sell the cars at auction and, if the cars were sold for less than expected, Simply Wheelz had to pay Hertz the difference between the sale price and expected value.[278] Simply Wheelz claimed that it lost approximately $1,600 on each sale.[279] This new company lost cars as well as the structural support that comes with an established rental car business, which Advantage had while under Hertz.[280] The business and its private equity funders did not have the experience, management, or capability to effectively compete in the rental car market.[281] This failure was not necessarily a shock: Antitrust experts claimed that this divestiture was not viable from the beginning.[282]
Also like the Haggen failure, the FTC approved Hertz buying back twenty‑two of the Simply Wheelz’s Advantage Rent a Car locations after Simply Wheelz declared bankruptcy.[283] The fact that Hertz ended up buying back some of the assets it was originally required to sell off in the settlement is particularly egregious.[284]
Several antitrust scholars subsequently critiqued this divestiture. An article co‑authored by current Columbia Law School professor Lina Khan referred to this fantastic failure (as well as the Haggen failure) as the “cruelest of ironies and a stinging rebuke to the FTC.”[285] After the failure, law professor Maurice Stucke called for changes in the current system of divestiture settlements, stating that it should “prompt some soul‑searching by the FTC and the Justice Department” and recommending that agencies “spend more time examining how their remedies work out over the long haul.”[286] Specifically, Stucke questioned why there were not additional safeguards in place that would have prevented a failed divestiture.[287]
After Advantage went under, the three remaining companies that controlled the vast majority of the rental car market raised prices to the highest rate since the start of the Great Recession.[288] The failed Advantage divestiture to Simply Wheelz was directly at odds with the purpose of divestiture in this context, as the buyer should “replace the competition lost as a result of a merger.”[289] Simply Wheelz did not do that.
United States v. Aetna Inc.
In some cases, courts have recognized issues with divestiture buyers and rejected divestitures as a solution to the potential anticompetitive effects of a merger.[290] In July of 2015, two of the United States’ largest health insurance companies, Aetna and Humana, entered into an agreement to merge for $37 billion.[291] After an investigation, the DOJ, eight states, and the District of Columbia filed a suit in federal district court, alleging violations of section 7 of the Clayton Act.[292] The defendants claimed that the merger would not substantially lessen competition and argued that the efficiencies resulting from the merger would counter any price increases from the loss of competition.[293]
After the DOJ, states, and D.C. filed their complaint, Aetna and Humana agreed to sell some of their Medicare Advantage plans to the company Molina in the event the merger was consummated and if the court found that a divestiture was necessary to counteract the merger’s anticompetitive effects.[294] At the time Aetna and Humana selected Molina as the divestiture buyer, Molina provided (mostly Medicaid) health insurance plans in twelve states and Puerto Rico.[295] Molina had attempted to expand into the Medicare Advantage market prior to the merger but never succeeded.[296]
The record at trial bore out that Molina was not a competent divestiture buyer for many reasons: (1) contemporaneous evidence suggesting that Molina was not confident in its ability to effectively compete, (2) weaknesses with Molina and the deal, (3) the low purchase price, and (4) its history in the Medicare market.[297] First, the court relied on e‑mails from executives showing that they were unaware of the types of plans that the company was receiving as well as multiple contemporaneous e‑mails expressing trepidation about the deal and Molina’s ability to execute it.[298] Second, there were also issues with how the companies structured the divestiture, including the fact that Molina was not acquiring Aetna’s or Humana’s provider contracts.[299] Testimony about how long it can take to establish provider contracts reflected the risk posed by this aspect of the deal.[300] One Aetna president testified that it could take eighteen months to build up a provider network that met requirements.[301] The court also found that the support Aetna and Humana committed to providing Molina during the transition period did not remedy the deficiencies because the companies had “no incentive to provide any assistance beyond the bare minimum during this period, lest they create too powerful a competitor.”[302] The court here flagged a concern that underpins the incentives at play while choosing a divestiture buyer—the incentive to avoid creating a strong competitor.[303] This explains why companies choose suboptimal buyers like Molina: their motive to undercut this future competitor.
Third, the purchase price in this case was also a red flag for the court.[304] Testimony showed that the usual purchase price for an individual Medicare Advantage plan was $7,000 to $10,000 (with statutory capital) and $3,000 to $5,000 (without statutory capital).[305] Molina only paid $1,400 per member (with statutory capital) and $401 (without statutory capital).[306] This shockingly low purchase price gave the court pause because a low purchase price can indicate that a divestiture buyer will still obtain something of value (such as the assets) without needing to become a significant competitor to make a profit off of the deal.[307] In this case, there was evidence that Molina was already considering withdrawing from certain markets after the divestiture went through.[308] Fourth, the court discussed how Molina’s history in the Medicare market raised concerns.[309] Specifically, since Molina repeatedly tried to enter the Medicare Advantage market but was unsuccessful in every prior attempt, this cast doubt on its ability to effectively compete in the market after the divestiture.[310]
Ultimately, the court found that the divestiture to Molina would not restore the competition lost in a merger between Aetna and Humana.[311] The court indicated that the other bidders on the divestiture were not particularly strong—one had issues with law enforcement, one only operated in Puerto Rico, and two did not bid on the entire package.[312] But given all of the apparent issues with Molina—including insufficient operational capabilities, past failures in attempting to enter the market, and evidence indicating a lackluster desire to fully compete—this begs the question of why Aetna and Humana chose Molina instead of accepting more bids.[313] The court acknowledged in its opinion that the companies had no incentive to help a future competitor.[314] It follows that these companies also lack sufficient incentive to choose a strong future competitor. At a minimum, the incentive to pick a weak buyer raises concerns about Aetna and Humana’s judgment in proposing Molina as a divestiture buyer and, at a maximum, suggests that it was potentially a nefarious choice. Whichever the reason, it is clear that something is inherently wrong with divestiture as a remedy with the current incentive structure.
The Albertsons/Safeway and Hertz/Dollar Thrifty mergers demonstrate that in recent years massive companies handpicked divestiture buyers that ultimately went bankrupt.[315] These buyers were chosen by the companies themselves, and although the divestitures passed initial regulatory scrutiny, questions remain about how the lack of information contributed to the FTC’s stamp of approval.[316] In the Kroger/Albertsons and Aetna/Humana cases, courts rejected the mergers because the divestiture buyer (chosen by the companies) had issues that indicated that it was not the strongest potential buyer to effectively counter the potential anticompetitive effects.[317] The three cases explored in this Part, along with the Kroger and Albertsons case study in Part II, show that the current framework for divestiture with its adverse incentive structures needs a reevaluation that empowers the antitrust enforcers with more information. This begs the question of how to empower antitrust enforcers.
A Potential Solution
To keep divestiture as a remedy, antitrust law should reexamine the process by which government enforcers evaluate a potential divestiture. This reexamination should start at the beginning: the divestiture bidding process. As it stands now, the merging firms choose the divestiture buyer, and they have a clear incentive to pick a weaker buyer.[318] The government enforcers should be able to evaluate all of the bids to combat this incentive. If all of the buyer options were subject to scrutiny by the government enforcers, this would help ensure that divestiture as a remedy is not doomed from the outset and that the parties select a stronger buyer. This process may mirror practices and precedents already in place for evaluating mergers and divestitures.[319] There are concerns to weigh with this proposal, such as whether this is an appropriate role for the judiciary and the government enforcers, whether divestiture bidders will hesitate to submit bids that the government will have access to, and whether divestiture should be preserved at all. However, the importance of divestiture as a remedy merits a consideration of how we might strengthen the process.
Granting Government Enforcers Access to All Bids
In light of the clear issues with the divestiture selection and approval process, courts and enforcement agencies should (1) require defendants to produce all divestiture bids, and (2) institute a process by which the court and the government enforcers have a say in who the divestiture buyer is, instead of just reviewing the divestiture buyer that the defendant cherry‑picked. When defendants go about selecting a divestiture buyer, they look to various bids from buyers interested in the asset to be divested.[320] Instead of shrouding this process so the court and regulators only see the one buyer selected by companies during the settlement process or litigation, parties and factfinders should have access to all the bids.[321] This would allow for a more transparent process where the parties can select the best buyer for competition, as opposed to just the best buyer in the defendants’ eyes.[322]
To institute a requirement for companies to share this information, the FTC or DOJ should promulgate a new rule to amend the information included in HSR disclosures to require companies to provide copies of all divestiture bids that they receive. The agencies should also require that the companies disclose any additional bids received throughout the process to ensure that they have access to all divestiture bids. Understandably, bidders will have concerns about this information becoming public. To assuage this concern, the rule should also specify that these documents are confidential and that the agencies will not include the names of bidders in any public filings or disclosures.
Within this process, the company will likely identify its chosen buyer for the divestiture. Ideally, because the required disclosure of all bidders will counter the incentive to choose a subpar buyer, the company will identify a strong buyer at the outset that can restore the competition lost. However, there are two possible outcomes here: (1) the agencies and companies agree that the companies’ chosen divestiture buyer is strong and likely to restore competition, and the transaction may proceed via consent decree or the agency’s decision to close the investigation;[323] or (2) the agencies disagree with the companies’ chosen buyer (either because there is a better buyer or because none of the buyers mitigate the concerns) and decide to litigate the merger in court if they cannot negotiate a consent decree. Section IV.A.1 discusses how this may unfold during litigation, including the responsibilities of each party and how this operates with the current burden‑shifting framework. Section IV.A.2 considers how this proposal may operate within a negotiated consent decree between the government enforcer and the merging party.
Litigation
The enforcers may still challenge the merger as they typically would through the courts,[324] with the added ammunition of presenting evidence that the defendants chose a subpar buyer. After having a chance to review all of the proposed buyers, the enforcers may argue that the chosen buyer will not restore competition lost and that the defendants also could have chosen a better buyer, as evidenced by a specific bid. Because of the confidentiality concerns, the court may keep testimony and evidence about the other bidder private according to the court’s confidentiality procedures.[325]
The defendants can then present arguments that their chosen buyer sufficiently addresses anticompetitive concerns. Based on the evidence presented at trial and in briefs about the potential buyers, the factfinder can decide whether the merger—considering the defendants’ chosen buyer and the agency’s arguments about better buyers—may substantially lessen competition. If the court decides that divestiture is not sufficient, then it would also necessarily decide that the merger without the divestiture substantially lessens competition. It is also possible for the court to find that the merger overall is not anticompetitive. Similarly, if the court finds that the proposed buyer will be a strong competitor and sufficient to counter the anticompetitive effects of the merger, then the court will effectively approve the merger with the divestiture.
The Role of Each Party
The government, during litigation, may use a stronger bidder as comparative evidence for how the merger with the defendant’s chosen buyer remains anticompetitive. If the government enforcer decides that none of the open bids would effectively “redress the violations and . . . restore competition,” it can simply argue that none of the proposed buyers were satisfactory and that the court should still enjoin the merger.[326]
The defendants’ argument can root itself in current case law, particularly in litigating the fix cases, where the court considers the divestiture during litigation.[327] To prevail, defendants still must affirmatively show that the merger with its proposed divestiture buyer is unlikely to substantially lessen competition.[328] The government can then use evidence of a stronger buyer to rebut the defendant’s showing that the divestiture will restore competition.[329]
The court’s analysis would be substantially similar to what it does now by evaluating which parties’ arguments win the day.[330] The court’s assessment should mirror how it currently evaluates a divestiture buyer and package during litigation and includes considerations such as whether the buyer is qualified, whether it will be competitive, and whether the buyer is independent.[331] However, with this approach, there is the possibility that the merger challenge will no longer be a zero‑sum game, with either the government winning or the companies winning. This way, the court could decide that the companies may still be able to merge, but that the government identified a stronger, more competitive buyer that has a greater chance of continuing competition in the marketplace. For example, the court could find that the merger is anticompetitive with the defendants’ chosen buyer but that it passes muster with another. The defendants may then decide, if the court rules against them, to pursue the merger with the other buyer.
Burden Shifting
The burden shifting under Baker Hughes largely stays the same under this framework. The burden of persuasion remains on the government for the duration of the trial.[332] The government would carry the ultimate burden of showing that either (1) the entire merger should be enjoined because it stands to substantially lessen competition regardless of the divestiture options, or (2) another divestiture buyer is better positioned to effectively compete and counter the merger’s anticompetitive effects, and the defendants’ chosen buyer is inadequate.[333] Evidence showing a better divestiture bidder can support the government’s ultimate burden of persuasion and rebut the defendant’s arguments that its handpicked divestiture buyer will restore competition.
At the outset, the government would also need to establish its prima facie case.[334] The prima facie case to enjoin the merger stays the same as it is now, and courts should allow the government to prove its prima facie case without considering any potential divestiture.[335] Here, the government must show that the transaction (without the divestiture buyer) “will lead to undue concentration in the market for a particular product in a particular geographic area.”[336] The government prevailing on the prima facie case establishes a presumption in its favor.[337] The burden would then shift to the defendants to rebut this presumption and produce evidence showing that their preferred divestiture buyer is sufficient to mitigate the anticompetitive effects of the merger.[338] If they are successful, then the burden shifts back to the government to produce additional evidence that the defendants’ chosen divestiture buyer will not sufficiently mitigate the anticompetitive effects.[339] Here, the government could also choose to argue that another divestiture buyer is stronger to combat the defendants’ evidence that their divestiture buyer is strong. While not explicitly part of the burden‑shifting framework, the government can also use this evidence to show that the defendants did not pick the divestiture buyer in good faith and are trying to undermine competition, and thus the purpose of antitrust law.[340] The final burden shifts back to the government and merges with the government’s ultimate burden of persuasion that the merger as proposed is anticompetitive.[341]
Settlements
Providing the government with information about other bidders also levels the playing field during consent decree negotiations. The current system—allowing the defendants to cherry‑pick the divestiture buyer—“reduce[s] the agency’s bargaining leverage in consent decree negotiations” and “reduce[s] deterrence of proposals for mergers with significant anticompetitive risks.”[342] Consent orders remain a valuable avenue to address antitrust concerns, and as such, the government enforcer should be able to evaluate all potential buyers during the settlement negotiation process.[343] A consent order is one option, along with challenging the merger via litigation or closing the investigation, available to the government enforcer after a merger investigation.[344] The settlement process already involves a close evaluation of a proposed divestiture buyer chosen by defendants, so the government enforcers are already comfortable and familiar with evaluating the strength of a divestiture buyer.[345] Therefore, government enforcers are well‑positioned during the settlement process to evaluate multiple proposed buyers and determine which ones are viable and which are not. Allowing the government access to bids during the negotiation process will not fundamentally alter the negotiation process but will add another dimension for the parties to consider during this negotiation. This additional dimension will give the agency more leverage in these negotiations. The defendants, hearing the government’s concerns or preferences for a certain buyer, may decide that they will choose the best buyer in order to allow the transaction to proceed.
Potential Concerns with the Proposed Framework
Although this framework empowers government enforcers in merger cases by providing additional evidence to support their case during litigation and a bargaining chip during settlement negotiations, there are potential concerns to consider. These concerns include whether this is an appropriate role for the judiciary or antitrust enforcement agencies and whether divestiture bidders will have hesitation around submitting bids that the government will have access to. Moreover, given the concerns with divestiture, there are questions as to whether antitrust law should preserve it at all.[346] These concerns are discussed in the following sections. Notwithstanding these concerns, divestiture is a valuable remedy option. Thus, the legal field needs to focus on reforming the current process to maintain divestiture as a remedy.
The Role of the Judiciary and Government Enforcers
One issue to consider when handing the task of evaluating multiple possible buyers to the government enforcers and courts is the expansion of these institutions’ respective roles. The strain on judicial resources, which is something to keep in mind when expanding the role of the court, is not a particularly problematic issue under this framework.[347] Because this framework envisions the government presenting the court with tailored information about another potential buyer, it does not expand the role of the court but simply adds a consideration to a process that would take place regardless.
Another concern is whether the judiciary is the appropriate entity to determine if a company is poised to compete effectively in a market. There is an understandable resistance to putting decisions that can affect large economic markets and companies in the hands of judges, who may not have any prior experience or expertise in economics or business decision‑making.[348] In our legal system, however, judges are consistently asked to make decisions in areas outside of their expertise, as judges are not typically assigned to cases based on their prior experience.[349] In fact, our legal system has a long‑standing tradition of considering judges as generalists in law who are able to make decisions about a wide swath of matters.[350] For example, certain intellectual property cases require judges to evaluate highly technical and nuanced information and make determinations about it.[351]
Nonetheless, judges evaluating antitrust cases necessitates economic determinations of how companies compete in different markets.[352] These decisions rooted in business and economics are not spared from judicial decision‑making, and judges make decisions involving these considerations often.[353] In cases where the merging entity does not identify a divestiture at the outset, courts still must make decisions entangled with economic analysis.[354] For example, in Illumina v. FTC, the Fifth Circuit evaluated the complex business interplays of Illumina risking its profits from its DNA sequencing product for the chance at larger profits by acquiring Grail and its multicancer early detection test.[355] The court here evaluated the potential economic consequences that this acquisition would have on other companies developing early detection tests.[356] Thus, not only are courts required to evaluate business decisions generally, but they have also already done so in section 7 cases.[357]
Courts also already consider whether proposed divestitures counteract the anticompetitive effects of a merger.[358] In United States v. Aetna, as discussed in Part III, the court determined that a divestiture to Molina was not sufficient to replace the competition lost by the merger based on an analysis in part informed by Molina’s business and technical capabilities.[359] There are also established factors that courts look to in assessing the sufficiency of a divestiture, including “the likelihood of the divestiture; the experience of the divestiture buyer; the scope of the divestiture[;] the independence of the divestiture buyer from the merging seller[;] and the purchase price.”[360] Thus, asking courts to evaluate multiple divestiture buyers to determine whether a buyer will replace lost competition is not a stretch from its well‑established capabilities in evaluating divestitures.
The Role of Antitrust Enforcement Agencies
In terms of government involvement, this framework does expand the agencies’ roles and the amount of information they must parse through.[361] This is a concern because agencies already experience resource constraints.[362] However, the increased likelihood of defendants selecting a sufficient buyer at the outset, due to the changes in incentive here, will ideally decrease the number of cases that the agencies need to challenge. If the merging company knows that the government will have access to all of the bids, there is less of an incentive to pick a subpar buyer. This should translate into less work for agencies because if companies pick a buyer that will mitigate antitrust concerns, then the agency does not need to go through time‑consuming and costly litigation. Yet even if this proposal requires more effort by agencies, it is worth the effort. The current state of divestiture led to immense consequences on competition in certain markets,[363] so if the agencies must review more information to stop these consequences, that is time well spent.
Some may raise concerns that this framework heavily regulates merging companies’ autonomy in selecting a buyer. But this proposal still does not require the agencies to mandate that a company select a specific buyer—it just rectifies the information imbalance and enables the agency to either enter litigation or settlement negotiations with all the information.
This analysis also lies within the agencies’ current expertise.[364] Since agencies currently assess the need for or sufficiency of a divestiture,[365] this is well within the agencies’ skill sets. Moreover, they employ experts specializing in economics, mitigating the concern that evaluating economic issues such as the strength of a divestiture buyer would be out of their wheelhouse.[366] For example, the FTC has a Bureau of Economics, where economists advise the agency on various economic issues during the course of the investigation and litigation.[367] While this framework may stretch government agencies, this is not a drastic change. Given that agencies already evaluate divestiture buyers, they are capable of evaluating additional potential buyers.
Concerns for Divestiture Buyers
Another consideration under this framework is whether businesses bidding on divestiture assets are willing to undergo the scrutiny of the litigation and investigation processes when they have not been selected as the divestiture buyer. While divestiture buyers participate in court proceedings after merging companies choose them as the buyer, they have a significant stake in the process at this point, whereas companies that are mere bidders may not have as much incentive to actively participate.[368] However, it is reasonable to assume that companies that choose to stay on as a contender during active litigation are committed to the purchase and the deal. This may even have the positive effect of weeding out bidders that are not as committed and enthusiastic about competing in the marketplace.
The bidders may also have confidentiality concerns. These concerns are effectively addressed by (1) ensuring that the initial disclosure of bidders is a private disclosure to the enforcing agencies and (2) following standard court procedures to keep certain information away from the public.[369] This may include motions for a protective order or asking the judge to seal certain documents.[370] Judges have discretion to balance the need for secrecy against the public’s right of access, and thus, if the government plans to present evidence of other bidders, the judge may decide to close the courtroom during the presentation of this evidence or seal documents.[371] The court can also publish redacted versions of court documents to the public to protect the privacy interests of nonparties, which would include bidders.[372] Although concerns of confidentiality are valid, the court and parties can manage these concerns through court procedures that are already in place.
Addressing Adverse Incentives with Divestitures
Giving government enforcers and courts access to all divestiture bidders will encourage more transparency in the process and help ensure that merging firms are not just picking a minimally acceptable buyer, or worse, succumbing to the temptation to select a firm that they hope will fail and not compete as effectively against them.[373] Even the prospect of having all of the bids available will serve as a deterrent against defendants picking a weaker buyer, since they will be empowered with the knowledge that the court or enforcement agency would uncover their ploy or inadvertent bias.
This proposal also serves to help the success of divestiture remedies in cases that settle before litigation. Although government enforcers often prevail in cases that make it to the end of trial, there is underenforcement in antitrust law due to agency resource constraints.[374] Enforcing agencies must be highly selective in choosing which cases to bring to trial because of these resource constraints.[375] Agencies may feel compelled to settle with defendants and accept a subpar divestiture buyer because going to trial, and risking losing and having a merger with zero remedy, may be worse for maintaining competition than a weak settlement.[376] Between 2001 and 2020, “on average, fewer than two cases per year reached litigated outcomes.”[377] However, armed with information about all the bidders, the agencies have more leverage. With the ability to review all bidders, and the threat of the court seeing through defendants picking a weaker buyer, this will reapportion some of the current favoritism for defendants.[378] This gives the government enforcers more leverage and control over the negotiations.
Conclusion
Antitrust laws are the “Magna Carta of free enterprise. They are as important to the preservation of economic freedom and our free enterprise system as the Bill of Rights is to the protection of our fundamental personal freedoms.”[379] Because of the importance of antitrust law in preserving economic freedom (for both the public and businesses), it is worth considering how processes may be improved to achieve this goal.[380] Divestiture is the preferred remedy.[381] But the cases tell us that it is at best risky and at worst a way for defendants to subvert antitrust enforcement and ultimately increase their market power. Allowing the merging firm to have all the power in choosing who will be its future competitor has clearly harmed competition because of the incentive to pick a weak buyer.[382] If divestiture is to be salvaged as an antitrust remedy, the evaluation of divestiture bidders should be open and subjected to a transparent review process. This way, courts and government enforcers may consider all the possible weaknesses with the buyers and better alternatives. This process may be folded into the current litigation and settlement framework. With additional safeguards and scrutiny surrounding the divestiture process, we can help to both ensure the protection of competition by decreasing the risk of a subpar buyer and preserve divestiture as a remedy. The preservation of divestiture will help protect competition, which will in turn protect consumers and the free market.[383]
* Senior Associate Editor, University of Colorado Law Review, Volume 97; Juris Doctor Candidate at the University of Colorado Law School, 2026; Bachelor of Science in Health: Science, Society, and Policy, Brandeis University, 2020. I am grateful for the editors on the Colorado Law Review for their thoughtful feedback and edits on this Note. Additionally, I would like to thank Professors Ian Papendick and Henry Hauser for their review of this Note in its early stages, which shaped its direction. Finally, I thank the Colorado Office of the Attorney General Kroger/Albertsons antitrust litigation team for introducing me to antitrust law and inspiring this Note
- The Antitrust Laws, Fed. Trade Comm’n, https://www.ftc.gov/advice-guidance/competition-guidance/guide-antitrust-laws/antitrust-laws [https://perma.cc/2GJD-FU7T] (internal quotation marks omitted). ↑
- U.S. Dep’t of Just. & Fed. Trade Comm’n, Merger Guidelines 1 (2023) [hereinafter Merger Guidelines], https://www.ftc.gov/system/files/ftc_gov/pdf/2023_merger_guidelines_final_12.18.2023.pdf [https://perma.cc/H75L-SZ2K]. ↑
- Divestiture, Cornell L. Sch.: Legal Info. Inst., https://www.law.cornell.edu/wex/divestiture [https://perma.cc/GB2A-75W6]. ↑
- See generally United States v. E. I. du Pont de Nemours & Co., 366 U.S. 316, 330–31 (1961) (articulating how divestiture “should always be in the forefront of a court’s mind” when analyzing antitrust violations). ↑
- See Lina Khan & Sandeep Vaheesan, Market Power and Inequality: The Antitrust Counterrevolution and Its Discontents, 11 Harv. L. & Pol’y Rev. 235, 287–88 (2017). ↑
- E. I. du Pont de Nemours & Co., 366 U.S. at 326. ↑
- See infra Part II. ↑
- Richard Feinstein, Bureau of Competition, Fed. Trade Comm’n, Negotiating Merger Remedies 4 (2012) [hereinafter Negotiating Merger Remedies], https://www.ftc.gov/system/files/attachments/negotiating-merger-remedies/merger-remediesstmt.pdf [https://perma.cc/X3N4-ZBVX]; see, e.g., Deborah L. Feinstein, Dir., Bureau of Competition, Fed. Trade Comm’n, Remarks at GCR Live: The Significance of Consent Orders in the Federal Trade Commission’s Competition Enforcement Efforts 12 (Sep. 17, 2013), https://www.ftc.gov/sites/default/files/documents/public_statements/significance-consent-orders-federal-trade-commission%E2%80%99s-competition-enforcement-efforts-gcr-live/130917gcrspeech.pdf [https://perma.cc/6R8N-7GF7]. ↑
- See Steven C. Salop & Jennifer E. Sturiale, Fixing “Litigating the Fix”, 85 Antitrust L.J. 619, 620 (2024). ↑
- This includes the Federal Trade Commission (FTC) and Department of Justice (DOJ), as well as state attorneys general. See infra Sections I.A–I.B. ↑
- See Negotiating Merger Remedies, supra note 8, at 4. ↑
- Id.; Jonathan M. Jacobson, Partner, Wilson Sonsini Goodrich & Rosati, Chair, ABA’s Section of Antitrust L., Issues in Antitrust Consent Decrees, Presentation to the Department of Justice Antitrust Division 2 n.1 (Apr. 26, 2018), https://www.justice.gov/atr/page/file/1057131/dl?inline [https://perma.cc/5J8S-F7GR]. ↑
- J. Dennis Hynes, Comment, The Consent Decree in Antitrust Enforcement— Analysis and Criticism, 32 Rocky Mt. L. Rev. 367, 367 (1960). ↑
- William J. Baer, Bureau of Competition, Fed. Trade Comm’n, A Study of The Commission’s Divestiture Process 33 (1999). ↑
- See Salop & Sturiale, supra note 9, at 660. ↑
- See Negotiating Merger Remedies, supra note 8, at 2, 9–11 (discussing the importance of choosing an “acceptable” divestiture buyer but not noting that defendants must choose their best bidder). ↑
- Id. ↑
- Id. at 2, 10. ↑
- United States v. E. I. du Pont de Nemours & Co., 366 U.S. 316, 326 (1961). ↑
- See Salop & Sturiale, supra note 9, at 660. ↑
- Baer, supra note 14, at iv, 9. A failed divestiture is one that does not meet the objectives of the divestiture—restoring harm to competition. Id. ↑
- See, e.g., id. at 10. Anticompetitive practices are those that “are likely to reduce competition and lead to higher prices, reduced quality or levels of service, or less innovation.” Anticompetitive Practices, Fed. Trade Comm’n, https://www.ftc.gov/enforcement/anticompetitive-practices [https://perma.cc/ZN89-MT57]. ↑
- See infra Parts II–III. ↑
- See infra Part IV. ↑
- See infra Section IV.A.1. ↑
- See infra Part IV. ↑
- See infra Part IV. ↑
- See infra Sections I.A–I.C. ↑
- Daniel Francis & Christopher Jon Sprigman, Antitrust: Principles, Cases, and Materials 4–5 (3d ed. 2025). ↑
- Id. ↑
- Khan & Vaheesan, supra note 5, at 236. ↑
- U.S. Dep’t of Just. & Fed. Trade Comm’n, Horizontal Merger Guidelines 1 (2010), https://www.justice.gov/atr/file/810276/dl?inline= [https://perma.cc/W7GU-RNKT]. ↑
- The Antitrust Laws, supra note 1. The Sherman Act section 1 covers agreements that unreasonably restrain trade and section 2 covers monopolization. Francis & Sprigman, supra note 29, at 8–9. ↑
- 15 U.S.C. § 18. ↑
- Clayton Antitrust Act Enacted, Libr. of Cong.: Rsch. Guides, https://guides.loc.gov/this-month-in-business-history/october/clayton-anitrust-enacted [https://perma.cc/A95S-DC7D]. ↑
- Merger Guidelines, supra note 2, at 1. ↑
- Id. at 5. ↑
- See id. at 1 (“Section 7 was designed to arrest anticompetitive tendencies in their incipiency.”). ↑
- The Antitrust Laws, supra note 1. ↑
- The Enforcers, Fed. Trade Comm’n, https://www.ftc.gov/advice-guidance/competition-guidance/guide-antitrust-laws/enforcers [https://perma.cc/2KFC-DMLR]. ↑
- Id. ↑
- Practical Law Antitrust, The Antitrust Division of the US DOJ: Overview, Thomson Reuters: Prac. L., https://us.practicallaw.thomsonreuters.com/w-034-1549 [https://perma.cc/W4BU-S89J]. ↑
- The Antitrust Laws, supra note 1. ↑
- Francis & Sprigman, supra note 29, at 675. ↑
- See id. For a discussion on the difficulties of undoing a consummated merger, see Menesh S. Patel, Merger Breakups, 2020 Wis. L. Rev. 975, 1005. ↑
- See generally 16 C.F.R. §§ 801, 803 (2024) (amending the Premerger Notification Rules regarding the information required and waiting period); Press Release, Fed. Trade Comm’n, FTC Finalizes Changes to Premerger Notification Form (Oct. 10, 2024), https://www.ftc.gov/news-events/news/press-releases/2024/10/ftc-finalizes-changes-premerger-notification-form [https://perma.cc/MCW8-MNDZ]. ↑
- See supra note 46 and accompanying text. ↑
- David Gelfand & Leah Brannon, A Primer on Litigating the Fix, 31 Antitrust 10, 13 (2016). ↑
- Francis & Sprigman, supra note 29, at 675–76; What You Should Know Before Filing the Hart‑Scott‑Rodino Act, Thomson Reuters (May 31, 2024) [hereinafter Filing the HSR], https://legal.thomsonreuters.com/en/insights/articles/navigating-the-hart-scott-rodino-act- [https://perma.cc/86PH-6WNF]. ↑
- U.S. Gov’t Accountability Off., GAO-23-105790, Antitrust: DOJ and FTC Jurisdictions Overlap, but Conflicts Are Infrequent 5 (2023), https://www.gao.gov/assets/820/814486.pdf [https://perma.cc/VTJ8-C39X]. ↑
- Id. at 6–8. ↑
- The Enforcers, supra note 40. ↑
- Id. ↑
- Filing the HSR, supra note 49. “For most, but not all, transactions, this starts with an initial 30‑day waiting period. For cash tender offers and bankruptcies, the initial waiting period is only 15 days.” Id. ↑
- A second request is an additional request for information and documents, often requiring extensive disclosures that take months for the merging companies to prepare. Francis & Sprigman, supra note 29, at 676, 679. ↑
- Filing the HSR, supra note 49. ↑
- Id. ↑
- Fed. Trade Comm’n, Model Second Request 2–4, https://www.ftc.gov/system/files/ftc_gov/pdf/Final-Rev-Model-Second-Request-01-26-2024.pdf [https://perma.cc/ZQ5F-RCUE] (last updated Jan. 2024). ↑
- Premerger Notification and the Merger Review Process, Fed. Trade Comm’n, https://www.ftc.gov/advice-guidance/competition-guidance/guide-antitrust-laws/mergers/premerger-notification-merger-review-process [https://perma.cc/2LC9-CXXU]. ↑
- See, e.g., Negotiating Merger Remedies, supra note 8, at 10. While the agency will evaluate a proposed buyer, FTC materials do not discuss requiring the companies to submit all bids. Id. ↑
- See infra Part III (discussing why the current framework for divestitures in merger cases is problematic). ↑
- Jean Wegman Burns, Embracing Both Faces of Antitrust Federalism: Parker and Arc America Corp., 68 Antitrust L.J. 29, 35 (2000). ↑
- 15 U.S.C. § 18 (emphasis added). ↑
- Colo. Rev. Stat. § 6‑4‑107(1) (2023) (emphasis added). ↑
- The Antitrust Laws, supra note 1; see, e.g., California v. Am. Stores Co., 495 U.S. 271, 276 (1990) (discussing an example of when the State of California sued under federal antitrust laws). ↑
- For the protocol for coordination in merger investigations, see The Enforcers, supra note 40. ↑
- Fed. Trade Comm’n, Working Together to Protect Consumers: A Study and Recommendations on FTC Collaboration with the State Attorneys General 11 (2024), https://www.ftc.gov/system/files/ftc_gov/pdf/p238400_ftc_collaboration_act_report.pdf [https://perma.cc/QQL7-RKAJ]. ↑
- Id. ↑
- Katie Arcieri, Mergers Get New State Scrutiny as Justice Department Steps Back, Bloomberg: Antitrust (Oct. 8, 2025, at 3:00 AM), https://news.bloomberglaw.com/antitrust/mergers-get-new-state-scrutiny-as-justice-department-steps-back [https://perma.cc/3AQY-FVQL]. ↑
- See Phil Weiser, Prepared Remarks: The Rising Importance of State Antitrust Leadership, Colo. Att’y Gen. (Sep. 25, 2024), https://coag.gov/blog-post/prepared-remarks-9-25-24 [https://perma.cc/6G7L-CNSP] (detailing how state collaboration with their federal counterparts on antitrust matters was “uneven,” but now there is a new normal of state participation). ↑
- Id. ↑
- See, e.g., Brown Shoe Co. v. United States, 370 U.S. 294 (1962). ↑
- Id. at 320. ↑
- Id. at 332. ↑
- Id. at 323 (internal quotation marks omitted). ↑
- Francis & Sprigman, supra note 29, at 407–08. ↑
- See generally id. (discussing incipient harms). ↑
- Fed. Trade Comm’n v. Sysco Corp., 113 F. Supp. 3d 1, 24 (D.D.C. 2015). ↑
- Id. ↑
- Id. at 24–25. ↑
- Id. ↑
- Brown Shoe Co. v. United States, 370 U.S. 294, 325 (1962). ↑
- Id.; see, e.g., United States v. Google LLC, 747 F. Supp. 3d 1, 108–09 (D.D.C. 2024). ↑
- Google LLC, 747 F. Supp. 3d at 112–13. ↑
- Id. at 112. ↑
- Id. (quoting Rothery Storage & Van Co. v. Atlas Van Lines, Inc., 792 F.2d 210, 218 n.4 (D.C. Cir. 1986)). ↑
- Fed. Trade Comm’n v. Sysco Corp., 113 F. Supp. 3d 1, 24 (D.D.C. 2015). ↑
- Francis & Sprigman, supra note 29, at 111. ↑
- United States v. Pabst Brewing Co., 384 U.S. 546, 557–61 (1966) (Harlan, J., concurring). ↑
- Sysco Corp., 113 F. Supp. 3d at 24 (quoting Fed. Trade Comm’n v. Cardinal Health, Inc., 12 F. Supp. 2d 34, 45 (D.D.C. 1998)). ↑
- In litigating the fix cases, the court may evaluate the transaction with the divestiture. Francis & Sprigman, supra note 29, at 517–18. ↑
- See, e.g., United States v. AT&T, Inc., 916 F.3d 1029, 1032 (D.C. Cir. 2019). ↑
- United States v. Baker Hughes, Inc., 908 F.2d 981, 982 (D.C. Cir. 1990). ↑
- Id. at 982–83. ↑
- Id. ↑
- Id. at 982. ↑
- See id. ↑
- Fed. Trade Comm’n v. Sysco Corp., 113 F. Supp. 3d 1, 23 (D.D.C. 2015) (internal quotation marks omitted). ↑
- Baker Hughes, Inc., 908 F.2d at 982–83. ↑
- Id. ↑
- Id. at 983. ↑
- See Salop & Sturiale, supra note 9, at 630–33. ↑
- Id. at 632–33; see also Fed. Trade Comm’n v. Kroger Co., No. 3:24‑CV‑00347, 2024 WL 5053016, at *16, *20 (D. Or. Dec. 10, 2024) (analyzing the proposed divestiture as part of the defendants’ rebuttal evidence). ↑
- Baker Hughes, Inc., 908 F.2d at 982; see also United States v. UnitedHealth Grp. Inc., 630 F. Supp. 3d 118, 134 (D.D.C. 2022); Kroger Co., 2024 WL 5053016, at *10–11; Fed. Trade Comm’n v. Sysco Corp., 113 F. Supp. 3d 1, 23 (D.D.C. 2015). ↑
- Baker Hughes, Inc., 908 F.2d at 991. ↑
- Id. at 982. ↑
- UnitedHealth Grp. Inc., 630 F. Supp. 3d at 135–39, appeal dismissed, No. 22‑5301, 2023 WL 2717667 (D.C. Cir. Mar. 27, 2023); see also Salop & Sturiale, supra note 9, at 629–32. ↑
- UnitedHealth Grp. Inc., 630 F. Supp. 3d at 133. ↑
- Id. ↑
- Id. at 134. ↑
- See Salop & Sturiale, supra note 9, at 643–45. ↑
- See id. at 644. ↑
- See infra Section II.A, Part III (discussing current issues with divestiture remedies). ↑
- Khan & Vaheesan, supra note 5, at 236, 241–45. ↑
- See id. at 236–37, 268–69. ↑
- Francis & Sprigman, supra note 29, at 26. Evidence of efficiency in a merger context focuses on the effects of production cost savings. Id. ↑
- See Khan & Vaheesan, supra note 5, at 236–37, 268–69. ↑
- Id. at 269. ↑
- Id. at 270. ↑
- Id. ↑
- See id. at 287–91 (discussing the issues with divestiture as a remedy and providing an argument for why there should be a strong presumption in favor of enjoining mergers as opposed to the divestiture remedy). ↑
- See supra Part I. ↑
- United States v. E. I. du Pont de Nemours & Co., 366 U.S. 316, 330–31 (1961). ↑
- U.S. Dep’t of Just., Antitrust Division Policy Guide to Merger Remedies 8 (2011), https://www.justice.gov/atr/page/file/1098656/dl?inline= [https://perma.cc/46UX-D4ZR]. ↑
- See, e.g., Press Release, U.S. Dep’t of Just., Justice Department Secures Largest Negotiated Merger Divestiture Ever to Preserve Competition Threatened by Bayer’s Acquisition of Monsanto (May 29, 2018), https://www.justice.gov/archives/opa/pr/justice-department-secures-largest-merger-divestiture-ever-preserve-competition-threatened [https://perma.cc/ZY76-N8X8] (discussing how the divestiture buyer BASF was an experienced chemical company with a substantial crop protection business); Press Release, U.S. Dep’t of Just., Justice Department Requires Divestitures in Merger Between UTC and Raytheon to Address Vertical and Horizontal Antitrust Concerns (Mar. 26, 2020), https://www.justice.gov/archives/opa/pr/justice-department-requires-divestitures-merger-between-utc-and-raytheon-address-vertical-and [https://perma.cc/87DA-9VLU] (explaining how the divestiture buyer BAE was an international defense, aerospace, and security company offering a wide range of defense products). ↑
- Press Release, U.S. Dep’t of Just., Justice Department Reaches Settlement with Anheuser‑Busch InBev and Grupo Modelo in Beer Case (Apr. 19, 2013), https://www.justice.gov/archives/opa/pr/justice-department-reaches-settlement-anheuser-busch-inbev-and-grupo-modelo-beer-case [https://perma.cc/PQG2-J8DN]. ↑
- Don Tse, How Modelo Became the No. 1 Beer Brand in America, Forbes (Nov. 1, 2024, at 7:45 AM), https://www.forbes.com/sites/dontse/2024/11/01/how-modelo-became-the-no-1-beer-brand-in-america [https://perma.cc/KN4Y-WJND]. ↑
- See supra notes 123–124 and accompanying text (describing the importance of divestiture as an antitrust remedy, especially because the remedy keeps other competitors in the market). ↑
- See supra Part I; supra notes 122–123 and accompanying text. ↑
- Francis & Sprigman, supra note 29, at 503. ↑
- Id. ↑
- Id. at 510–11. ↑
- Id. at 511. ↑
- Id. at 510–11. ↑
- Id. ↑
- Id. at 504. ↑
- Id. at 504–05 (quoting United States v. E. I. du Pont de Nemours & Co., 366 U.S. 316, 334 (1961)). ↑
- Id. at 504. ↑
- Id. ↑
- Id. at 510. ↑
- Id. ↑
- See, e.g., Synopsys, Inc., F.T.C. No. C‑4820, at 7 (Oct. 16, 2025). ↑
- See supra notes 130–132 and accompanying text. ↑
- See supra note 7 and accompanying text. ↑
- See infra Part II. ↑
- See Salop & Sturiale, supra note 9, at 660. ↑
- Kison Patel, Divestiture: Definition, High‑Growth Approach (Step‑by‑Step), M&A Sci., https://www.mascience.com/community-blog/what-are-divestitures [https://perma.cc/6DJU-8GRD]. ↑
- Id. ↑
- See Toby Tester, Determining a Divestiture Approach, M&A Sci., https://www.mascience.com/plays/determining-divestiture-approach [https://perma.cc/NWC2-5YK4]. ↑
- Baer, supra note 14, at 17; see also Negotiating Merger Remedies, supra note 8, at 10 (explaining the application and acceptance process including what is and is not required). ↑
- Plaintiff’s Proposed Findings of Fact and Conclusions of Law at 318, State v. Kroger, No. 24CV30459 (Colo. Dist. Ct. Nov. 7, 2024), https://trellis.law/case/8031/2024cv030459/st-colo-v-kroger-co-et-al [https://perma.cc/Z3D6-DU6C]. ↑
- Id. ↑
- See supra Part I. ↑
- Baer, supra note 14, at 15. ↑
- Id. ↑
- Id. at 7. ↑
- See id. ↑
- See Salop & Sturiale, supra note 9, at 660; Baer, supra note 14, at 15. ↑
- See Baer, supra note 14, at 15. ↑
- Id. ↑
- Id. ↑
- Id. ↑
- See infra Section III.A (discussing this merger). ↑
- Baer, supra note 14, at 15. ↑
- Id. at 17. ↑
- Id. ↑
- Id. at 39. The divestiture period is the period by which a required divestiture must be completed. Id. ↑
- An upfront buyer is a buyer that has already negotiated agreement with the merging firm, and the FTC approved both the buyer and the transaction. Fed. Trade Comm’n, The FTC’s Merger Remedies 2006–2012: A Report of the Bureaus of Competition and Economics 3 n.7 (2017). ↑
- Id. at 10–11. ↑
- Id. at 6. Some gaps identified by divestiture buyers included (1) the buyer’s ability to conduct adequate due diligence and the transfer and retention of customers; and (2) the seller’s obligation to provide supply, transition services, and employee access. Id. at 24. ↑
- See supra notes 150–166 and accompanying text. ↑
- Michael Frankel, Choosing the Right Divestiture Partner, Financier Worldwide (July 2024), https://www.financierworldwide.com/choosing-the-right-divestiture-partner [https://perma.cc/C563-G5HQ]. ↑
- Baer, supra note 14, at 15. ↑
- Id. ↑
- See Salop & Sturiale, supra note 9, at 628. This is because in litigating the fix cases, the merging company can choose a divestiture buyer on its own timeline, as long as it provides the agency sufficient time to consider the merger with the divestiture. See id. ↑
- See Plaintiff’s Proposed Findings of Fact and Conclusions of Law, supra note 151, at 318. For example, Kroger CEO McMullen testified that Kroger would not pick a weak buyer because antitrust regulators would not accept a weak buyer. Id. ↑
- See infra Section II.B, Part III (providing examples of a merging company choosing a weak buyer in spite of the incentives to choose a strong one). ↑
- Fed. Trade Comm’n v. Kroger Co., No. 3:24‑CV‑00347, 2024 WL 5053016, at *4 (D. Or. Dec. 10, 2024). ↑
- For a discussion of the Safeway and Albertsons merger, see infra Section III.A. ↑
- Kroger Co., 2024 WL 5053016, at *3. ↑
- See id. at *4 (explaining Kroger and Albertson’s various divestitures). ↑
- Id. ↑
- Id. ↑
- Id. ↑
- Id. ↑
- Id. ↑
- Id. ↑
- Id. at *28. ↑
- Id. ↑
- See id. (describing how, within its grocery retail business, C&S operates one pharmacy and no fuel centers). ↑
- Gail Weinstein et al., Practice Points Arising from Albertsons’ Claims Against Kroger for Breach of Their Merger Agreement, Harv. L. Sch. F. on Corp. Governance (Jan. 21, 2025), https://corpgov.law.harvard.edu/2025/01/21/practice-points-arising-from-albertsons-claims-against-kroger-for-breach-of-their-merger-agreement [https://perma.cc/5N4Z-2YPT]. ↑
- Alexander Coolidge, Kroger Albertson’s Merger: Where the Legal Cases Stand, Cin. Enquirer, https://www.cincinnati.com/story/money/2024/10/28/when-will-a-judge-rule-in-the-kroger-albertsons-merger/75894987007 [https://perma.cc/LBE4-FE7P] (last updated Oct. 30, 2024, at 9:01 AM). ↑
- Kroger Co., 2024 WL 5053016, at *39. ↑
- Id. at *26, 28. ↑
- Id. at *28–29. ↑
- Id. at *26–36. ↑
- Id. at *107–08. ↑
- Press Release, Wash. State Off. of the Att’y Gen., Judge Blocks Kroger‑Albertsons Merger Following AG Ferguson Challenge (Dec. 10, 2024), https://www.atg.wa.gov/news/news-releases/judge-blocks-kroger-albertsons-merger-following-ag-ferguson-challenge [https://perma.cc/R4JL-JC4H]. ↑
- Amanda Pampuro, Judge Tosses Claims Albertsons and Kroger Violated Workers Rights with No‑Poach Strike Deal, Courthouse News Serv. (Feb. 23, 2026), https://www.courthousenews.com/judge-tosses-claims-albertsons-and-kroger-violated-workers-rights-with-no-poach-strike-deal [https://perma.cc/4JRE-DA32]. ↑
- Danielle Kay, Albertsons Backs Out of Merger Deal and Sues Kroger After Court Rulings, N.Y. Times (Dec. 11, 2024), https://www.nytimes.com/2024/12/11/business/albertsons-kroger-merger-deal.html [https://perma.cc/99HN-DY9M]. ↑
- Id. ↑
- Timothy Inklebarger, Aldi and Save Mart Likely Considered Buying Divested Kroger, Albertsons Stores, Supermarket News (Oct. 14, 2024), https://www.supermarketnews.com/mergers-acquisitions/aldi-and-save-mart-likely-considered-buying-divested-kroger-albertsons-stores [https://perma.cc/H5JV-JFBL]. ↑
- See supra notes 78–83 and accompanying text. ↑
- Bernadette Berdychowski, Aldi, Save Mart May Have Tried to Buy Colorado Stores in Kroger Merger Divestiture Sale, Denv. Gazette (Oct. 9, 2024), https://denvergazette.com/news/business/aldi-colorado-safeway-merger/article_1da3112c-868a-11ef-b650-176f77936cbe.html [https://perma.cc/XR3A-QKFW]. ↑
- See Fed. Trade Comm’n v. Kroger Co., No. 3:24‑CV‑00347, 2024 WL 5053016, at *39 (D. Or. Dec. 10, 2024). ↑
- Id. at *4. ↑
- See supra notes 98–100 and accompanying text. ↑
- For an example of a grocery divestiture failing, see infra Section III.A. ↑
- Kroger Co., 2024 WL 5053016, at *20. ↑
- Khan & Vaheesan, supra note 5, at 236–37. ↑
- See supra note 19–20 and accompanying text. ↑
- See Feinstein, supra note 8, at 12. ↑
- Id. ↑
- See Khan & Vaheesan, supra note 5, at 287; Negotiating Merger Remedies, supra note 8, at 15. ↑
- See Khan & Vaheesan, supra note 5, at 287–88. ↑
- Id. at 288. ↑
- See United States v. Aetna Inc., 240 F. Supp. 3d 1, 73–74 (D.D.C. 2017) (articulating the conclusion the court comes to regarding the divestiture buyer). ↑
- See infra Part III. ↑
- Reuters & NBC News Staff, Albertsons Owner to Buy Safeway for More than $9 Billion, NBC News, https://www.nbcnews.com/business/business-news/albertsons-owner-buy-safeway-more-9-billion-n46416 [https://perma.cc/444C-2DFX] (last updated Mar. 6, 2014, at 3:46 PM). ↑
- Id. ↑
- Press Release, Fed. Trade Comm’n, FTC Requires Albertsons and Safeway to Sell 168 Stores as a Condition of Merger (Jan. 27, 2015) [hereinafter FTC Albertsons/Safeway Press Release], https://www.ftc.gov/news-events/news/press-releases/2015/01/ftc-requires-albertsons-safeway-sell-168-stores-condition-merger [https://perma.cc/X7LY-TXHC]. ↑
- Id. ↑
- Id. ↑
- Diane Bartz, Haggen, Which Bought Divested Grocery Stores, to Close Most, Reuters (Sep. 25, 2015, at 4:37 PM), https://www.reuters.com/article/legal/haggen-which-bought-divested-grocery-stores-to-close-most-idUSL1N11V2PI [https://perma.cc/M6W5-3ND4]. ↑
- Leah Nylen & Christopher Cannon, Kroger‑Albertsons Deal Is Haunted by ‘Spectacular’ Past Failure, Bloomberg (July 17, 2024), https://www.bloomberg.com/graphics/2024-albertsons-kroger-merger [https://perma.cc/86PE-JA8T]. ↑
- Emily Stewart, What Is Private Equity, and Why Is It Killing Everything You Love?, Vox (Jan. 6, 2020, at 5:00 AM), https://www.vox.com/the-goods/2020/1/6/21024740/private-equity-taylor-swift-toys-r-us-elizabeth-warren [https://perma.cc/R2EX-CXTM]. ↑
- Id. ↑
- Id. ↑
- FTC Albertsons/Safeway Press Release, supra note 221. ↑
- In re HH Liquidation, LLC, 590 B.R. 211, 219, 230, 251 (Bankr. D. Del. 2018). ↑
- Id. at 220, 230. ↑
- Id. at 225. ↑
- Id. ↑
- FTC Albertsons/Safeway Press Release, supra note 221; see infra notes 235–239 and accompanying text. ↑
- In re HH Liquidation, 590 B.R. at 226. ↑
- Id. ↑
- Id. at 231–32. ↑
- Id. at 232. The structure of the deal—specifically creating separate corporate entities and a sale leaseback of the property—allowed the buyers “to avoid the substantial transactional risks that [they] identified including, but not limited to, the risk that Haggen would run out of liquidity.” Id. at 229. ↑
- Id. at 225 (internal quotation marks omitted); Nylen & Cannon, supra note 225. ↑
- See In re HH Liquidation, 590 B.R. at 226–27. ↑
- Id. at 228. ↑
- Id. ↑
- See infra notes 244–248 and accompanying text. ↑
- In re HH Liquidation, 590 B.R. at 237. ↑
- Id. ↑
- Id. ↑
- Nylen & Cannon, supra note 225. ↑
- Id. ↑
- Id. ↑
- Tracy Rucinski & Jim Christie, Regional Grocer Haggen Files for Bankruptcy, Blames Albertsons, Reuters (Sep. 9, 2015, at 4:17 PM), https://www.reuters.com/article/business/regional-grocer-haggen-files-for-bankruptcy-blames-albertsons-idUSKCN0R92DI [https://perma.cc/22EN-HL49]. ↑
- Nylen & Cannon, supra note 225. ↑
- Id. In the case of one store, Albertsons bought it back and reopened it four months after it closed. Id. ↑
- Id. ↑
- Id. ↑
- Khan & Vaheesan, supra note 5, at 289. ↑
- See Section I.A (discussing what information companies disclose in HSR filings). ↑
- Michael J. de la Merced & Peter Lattman, After Long Pursuit, Hertz to Buy Dollar Thrifty for $2.3 Billion, N.Y. Times, https://archive.nytimes.com/dealbook.nytimes.com/2012/08/26/hertz-on-the-verge-of-buying-dollar-thrifty [https://perma.cc/P679-89XL] (last updated Aug. 26, 2012, at 10:52 PM). ↑
- Press Release, Fed. Trade Comm’n, FTC Requires Divestitures for Hertz’s Proposed $2.3 Billion Acquisition of Dollar Thrifty to Preserve Competition in Airport Car Rental Markets (Nov. 15, 2012) [hereinafter Hertz/Dollar Thrifty Press Release], https://www.ftc.gov/news-events/news/press-releases/2012/11/ftc-requires-divestitures-hertzs-proposed-23-billion-acquisition-dollar-thrifty-preserve-competition [https://perma.cc/VG2L-KN3E]. ↑
- Id. ↑
- Id. The other two were “Avis Budget Group, Inc. (which operates the Avis and Budget brands), and Enterprise Holdings, Inc. (which operates the National, Alamo and Enterprise brands).” Id. ↑
- Id. Section 5 of the FTC Act enables the FTC to enforce at least everything that is prohibited by the antitrust laws. Francis & Sprigman, supra note 29, at 9. ↑
- Hertz/Dollar Thrifty Press Release, supra note 258. ↑
- Id. ↑
- Marc Williamson et al., Private Equity Buyers as Divestiture Buyers: U.S. and EU Perspectives, Threshold, Spring 2019, at 1, 4. ↑
- Id. ↑
- Hertz/Dollar Thrifty Press Release, supra note 258. ↑
- See Brent Kendall & Jacqueline Palank, How the FTC’s Hertz Antitrust Fix Went Flat, Wall St. J., https://www.wsj.com/articles/SB10001424052702303330204579246281764302824 [https://perma.cc/Z7LP-G74Y] (last updated Dec. 8, 2013, at 8:03 PM). ↑
- Id. ↑
- Hertz/Dollar Thrifty Press Release, supra note 258. ↑
- See infra Part IV. ↑
- See infra Part IV. ↑
- See infra Part IV. ↑
- The FTC approved the divestiture, stating that the new company would replace the lost competition. Hertz/Dollar Thrifty Press Release, supra note 258. ↑
- Williamson et al., supra note 264, at 4. ↑
- Kendall & Palank, supra note 267. ↑
- Id.; Rucinski & Christie, supra note 250. ↑
- Kendall & Palank, supra note 267. ↑
- Id. ↑
- Id. ↑
- See supra notes 257–262, 264–265 and accompanying text (stating that, while Hertz had 26 percent of the airport rental car market, the new Simply Wheelz company was comprised of a small rental car company and private equity). ↑
- See Khan & Vaheesan, supra note 5, at 288; US: Experts Say FTC Failed in Hertz, Dollar Thrifty Regulation, Competition Pol’y Int’l (Dec. 1, 2013), https://www.pymnts.com/cpi-posts/us-experts-say-ftc-failed-in-hertz-dollar-trifty-regulation [https://perma.cc/9637-TPA3]. ↑
- See Khan & Vaheesan, supra note 5, at 288; US: Experts Say FTC Failed in Hertz, Dollar Thrifty Regulation, supra note 281. ↑
- See Press Release, Fed. Trade Comm’n, FTC Approves Franchise Services of North America’s Application to Sell Certain Advantage Rent a Car Locations to Hertz and Avis Budget Group (May 30, 2014), https://www.ftc.gov/news-events/news/press-releases/2014/05/ftc-approves-franchise-services-north-americas-application-sell-certain-advantage-rent-car-locations [https://perma.cc/ZY8Z-V3VS]. ↑
- See generally id. ↑
- Khan & Vaheesan, supra note 5, at 288–89. ↑
- Kendall & Palank, supra note 267. ↑
- Id. ↑
- Khan & Vaheesan, supra note 5, at 288–89. ↑
- Baer, supra note 14, at iii. ↑
- See, e.g., supra notes 194–205 and accompanying text (describing the Kroger case). ↑
- United States v. Aetna Inc., 240 F. Supp. 3d 1, 8, 10 (D.D.C. 2017). ↑
- Id. at 8. ↑
- Id. at 9. For a discussion on the efficiencies argument in mergers, see supra Section I.D. ↑
- Aetna Inc., 240 F. Supp. 3d at 17. ↑
- Id. at 61. ↑
- Id. at 62. ↑
- Id. at 61–73. ↑
- Id. at 64–65, 69–71. ↑
- Id. at 67. Provider contracts are contracts between the insurance company and health care providers. Id. at 66–68. ↑
- Id. at 66–68. ↑
- Id. at 66. ↑
- Id. at 71. ↑
- Id. ↑
- Id. at 72. ↑
- Id. Without going into the intricacies of the health insurance system, statutory capital is “the capital that an insurer must set aside to maintain its insurance license.” Id. at 62. ↑
- Id. at 72. ↑
- Id. ↑
- Id. ↑
- Id. at 72–73. ↑
- Id. ↑
- Id. at 73. ↑
- See id. at 62. ↑
- Id. at 61–74. ↑
- Id. at 71. ↑
- See supra Sections III.A–III.B. ↑
- See supra notes 149–177 and accompanying text. ↑
- See supra Sections II.B, III.A, III.C. ↑
- Salop & Sturiale, supra note 9, at 660; see supra Section II.A. ↑
- See infra Section IV.A. ↑
- See supra Part II. ↑
- See supra notes 43–48 for an explanation of the required disclosures under HSR. ↑
- See supra Part II. ↑
- Premerger Notification and the Merger Review Process, Fed. Trade Comm’n, https://www.ftc.gov/advice-guidance/competition-guidance/guide-antitrust-laws/mergers/premerger-notification-merger-review-process [https://perma.cc/TTL5-A24G]. ↑
- Id. (describing how one of the options at the end of the investigation into a merger is to “seek to stop the entire transaction by filing for a preliminary injunction in federal court pending an administrative trial on the merits”). ↑
- For example, courts might accomplish this via protective orders. See Fed. R. Civ. P. 26(c). ↑
- Ford Motor Co. v. United States, 405 U.S. 562, 573 (1972) (quoting United States v. E. I. du Pont de Nemours & Co., 366 U.S. 316, 326 (1961)). ↑
- See supra Section I.C (discussing how courts evaluate mergers in litigating the fix cases). ↑
- See Illumina, Inc. v. Fed. Trade Comm’n, 88 F.4th 1036, 1058–59 (5th Cir. 2023). ↑
- See infra notes 337–339 and accompanying text. ↑
- See supra Section I.C (discussing how courts evaluate mergers in litigating the fix cases). ↑
- Gelfand & Brannon, supra note 48, at 11–12. ↑
- See United States v. Baker Hughes, Inc., 908 F.2d 981, 982–83 (D.C. Cir. 1990). ↑
- See id. ↑
- See supra Section I.C. ↑
- See supra notes 92–101 and accompanying text. ↑
- Baker Hughes, Inc., 908 F.2d at 982–83. ↑
- Id. ↑
- Id. ↑
- Id. ↑
- See Khan & Vaheesan, supra note 5, at 236–37 (discussing the importance of tying in the purpose of antitrust law to legal analyses). ↑
- See Baker Hughes, Inc., 908 F.2d at 982–83. ↑
- Salop & Sturiale, supra note 9, at 638. ↑
- For a discussion on the benefits of consent orders by the FTC, see Feinstein, supra note 8, at 3–5. ↑
- Premerger Notification and the Merger Review Process, supra note 323. ↑
- See Feinstein, supra note 8, at 9. ↑
- For a discussion of the argument as to whether or not to preserve divestiture as a remedy, see supra Section I.D. ↑
- Nate Raymond, US Judge Urges Congress to Revive Effort to Expand Judiciary, Reuters (Feb. 25, 2025, at 10:35 AM), https://www.reuters.com/legal/government/us-judge-urges-congress-revive-effort-expand-judiciary-2025-02-25 [https://perma.cc/D69E-EBHZ] (discussing the strain on the federal judiciary). ↑
- See Jack B. Weinstein, The Roles of a Federal District Court Judge, 76 Brook. L. Rev. 439, 440 (2011). ↑
- Id. ↑
- See id. ↑
- In Fine Agrochemicals Ltd. v. Stoller Enterprises Inc., the court had to construe the term “chemical formulations with cytokinin activity” in a patent infringement case. No. 4:20‑CV‑750, 2021 WL 3620069, at *2 (S.D. Tex. Aug. 16, 2021) (internal quotation marks omitted). ↑
- See supra Part I. ↑
- All antitrust merger cases involve economic analysis. See supra Part I. ↑
- See, e.g., Illumina, Inc. v. Fed. Trade Comm’n, 88 F.4th 1036 (5th Cir. 2023). ↑
- Id. at 1050–51. ↑
- Id. ↑
- See e.g., id. at 1044–46, 1059–61 (describing a case where the court analyzed a business’s decisions in a section 7 case). ↑
- See, e.g., supra Section III.C. ↑
- See supra Section III.C. ↑
- Fed. Trade Comm’n v. Kroger Co., No. 3:24‑CV‑00347, 2024 WL 5053016, at *24 (D. Or. Dec. 10, 2024) (alterations in original) (quoting United States v. UnitedHealth Grp. Inc., 630 F. Supp. 3d 118, 135 (D.D.C. 2022) (quoting Fed. Trade Comm’n v. RAG‑Stiftung, 436 F. Supp. 3d 278, 304 (D.D.C. 2020))). ↑
- See supra notes 43–48 (explaining the required disclosures under HSR). ↑
- Salop & Sturiale, supra note 9, at 637. ↑
- See supra Part III (providing examples of failed divestitures). ↑
- See About the Bureau of Economics, Fed. Trade Comm’n, https://www.ftc.gov/about-ftc/bureaus-offices/bureau-economics/about-bureau-economics [https://perma.cc/352X-D23F]; Expert Analysis Group, U.S. Dep’t of Just.: Antitrust Div., https://www.justice.gov/atr/expert-analysis-group [https://perma.cc/2VRC-PNVW]. ↑
- Angelike Andrinopoulos Mina, Unpacking Divestiture Packages, Fed. Trade Comm’n: Competition Matters (June 13, 2019), https://www.ftc.gov/enforcement/competition-matters/2019/06/unpacking-divestiture-packages [https://perma.cc/7C7E-G737]. ↑
- Expert Analysis Group, supra note 364. ↑
- About the Bureau of Economics, supra note 364. ↑
- C&S, the divestiture buyer, was an active participant in the cases challenging the merger between Kroger and Albertsons. See Plaintiff’s Proposed Findings of Fact and Conclusions of Law, supra note 151, at 33–35. The proposed executive of C&S’s new retail business, as well as other C&S employees, testified during the trials. See id. ↑
- See supra Section IV.A.1. ↑
- Fed. R. Civ. P. 26(c). ↑
- Robert Timothy Reagan, Fed. Jud. Ctr., Sealing Court Records and Proceedings: A Pocket Guide 17 (2010), https://www.fjc.gov/sites/default/files/2012/Sealing_Guide.pdf [https://perma.cc/QPK2-JWFY]. ↑
- Id. ↑
- See Baer, supra note 14, at 8 (discussing how firms may pick a minimally acceptable buyer instead of a robust competitor); supra Part II (discussing the defendants’ incentive to pick a weaker buyer). ↑
- Salop & Sturiale, supra note 9, at 634. ↑
- See generally id. (discussing how agencies accept less‑than‑ideal settlements because budget constraints limit the number of cases the agencies can take to trial). ↑
- Id. at 635. ↑
- Logan Billman & Steven C. Salop, Merger Enforcement Statistics: 2001– 2020, 85 Antitrust L.J. 1, 7 (2023). ↑
- See supra Part II. ↑
- United States v. Topco Assocs., Inc., 405 U.S. 596, 610 (1972). ↑
- See Khan & Vaheesan, supra note 5, 236–37, 268–69. ↑
- See United States v. E. I. du Pont de Nemours & Co., 366 U.S. 316, 330–31 (1961). ↑
- See supra Part III. ↑
- See Khan & Vaheesan, supra note 5, at 236. ↑