By: Jack Di Masi

Over the past several years, U.S. merger control has shifted from routine clearance toward a litigation-forward enforcement posture, and that shift has produced a string of high-profile deal defeats and withdrawals.[1] In the 2023 Merger Guidelines, the Department of Justice (DOJ) and Federal Trade Commission (FTC) formalized an expanded analytic framework that flags not only traditional product-market concentration but also input and labor markets, nascent competitors, multi-sided platforms, and “ecosystem” effects.[2] Courts have responded by granting preliminary and permanent relief when the government presents a strong factual record.[3]

In December 2024, a federal judge enjoined Kroger’s proposed $24.6 billion acquisition of Albertsons after finding the merger likely to eliminate head-to-head rivalry in many local grocery markets and to harm consumers and union grocery workers.[4] Earlier in 2024, a federal court blocked JetBlue’s $3.8 billion acquisition of Spirit Airlines, crediting DOJ evidence that the combination would extinguish a disruptive low-cost competitor on hundreds of routes and raise fares.[5] In October 2024, a judge preliminarily enjoined Tapestry’s $8.5 billion acquisition of Capri, agreeing with the FTC that the deal would substantially lessen competition in the U.S. luxury-handbag market.[6] These horizontal mergers stopped in groceries, airlines, and luxury retail suggest that agencies and courts are willing to apply long-standing Section 7 principles in modern contexts to protect consumers.

The litigation posture is not limited to horizontal theories that protect consumers.[7] DOJ’s successful effort to block Penguin Random House’s acquisition of Simon & Schuster highlighted monopsony concerns in input and labor markets, explaining that consolidation could suppress authors’ advances and undermine their ability to secure higher compensation through auctions and negotiations of their work, and thereby underscoring that Section 7 challenges can target sellers or suppliers as well as end consumers.[8] Additionally, the FTC’s challenge to Illumina’s proposed acquisition of Grail illustrates the agencies’ willingness to attack competitor mergers on innovation and availability theories when the alleged buyer controls key inputs in healthcare.[9] The 2023 Guidelines formalize these strands and explain the types of evidence the agencies value in investigations: documents, testimony, available data, and analysis of that data, including credible econometric analysis and economic modeling.[10]

Courts have been particularly receptive to government proofs that combine econometric analysis with internal documents showing overlapping competitive incentives.[11] Where agencies produce such a record, judges have not hesitated to grant injunctive relief rather than leave competitive harms to be remedied only after a transaction closes.[12] The practical result has been more blocked deals and longer, more expensive reviews.[13]

Given this environment, M&A strategy must adapt. First, antitrust analysis should begin at deal conception: collect relevant materials and data, interview key business personnel, map product, geographic, and labor overlaps, and, when appropriate, engage economic experts and develop a regulatory roadmap to guide transaction planning and implementation while the parties still have flexibility to redesign the deal.[14] Second, prepare credible, specific remedies up front to avoid regulators rejecting vague behavioral promises and often requiring structural fixes, such as divestitures.[15] Third, where risk is severe, consider alternatives such as narrow asset purchases or  joint ventures that achieve strategic aims without creating presumptive concentration.[16] Practitioners and major law firms already advise building regulatory roadmaps into transaction planning and treating antitrust risk as a deal-defining issue rather than an afterthought.[17]

For deal teams and in-house counsel, the takeaway is urgent and straightforward. They should translate recent precedents and the 2023 DOJ/FTC Merger Guidelines into earlier, more disciplined antitrust planning by investing in robust economic analyses during diligence, lining up credible remedies before filing, and considering alternative deal structures.[18] Doing so preserves deal value and reduces the risk that an otherwise attractive strategic combination terminates after protracted litigation, a risk that has become more common under the recent enforcement landscape.[19]

 

[1] See Steven C. Sunshine et al., DOJ and FTC Release Final 2023 Merger Guidelines Formalizing Aggressive Merger Enforcement Playbook, Skadden (Dec. 21, 2023), https://www.skadden.com/insights/publications/2023/12/doj-and-ftc-release-final-2023-merger-guidelines? [https://perma.cc/939Q-HCEC] (suggesting that agencies will continue to pursue aggressive merger enforcement, leading to greater scrutiny against transactions, increased costs of transactions, and more frequent and burdensome investigations); e.g., Fed. Trade Comm’n v. Kroger Co., No. 3:24-CV-00347-AN, slip op. at 30, 39 (D. Or. Dec. 10, 2024) (granting a preliminary injunction against grocery stores because “the proposed merger would substantially lessen competition in those markets”).

[2] U.S. Dep’t of Justice & Fed. Trade Comm’n, Merger Guidelines: U.S. Department of Justice and the Federal Trade Commission (Dec. 18, 2023), https://www.justice.gov/d9/2023-12/2023%20Merger%20Guidelines.pdf [https://perma.cc/7JTQ-N92Y] (defining an “ecosystem” competition as “a situation where an incumbent firm that offers a wide array of products and services may be partially constrained by other combinations of products and services from one or more providers”).

[3] See, e.g., Kroger Co., slip op. at 30, 39 (granting a preliminary injunction against grocery stores because “the proposed merger would substantially lessen competition in those markets”); United States v. JetBlue Airways Corp., 712 F. Supp. 3d 109, 163, 164 (D. Mass. 2024) (ordering the airlines permanently enjoined from executing the proposed merger because it would “substantially lessen competition in at least some of the relevant markets”); Fed. Trade Comm’n v. Tapestry, Inc., 755 F. Supp. 3d 386, 496 (S.D.N.Y. 2024) (noting that denying the FTC’s injunctive relief against the fashion brands would likely cause “irreparable harm to the public”).

[4]  Kroger Co., slip op. at 4, 30, 36–37, 39.

[5] JetBlue Airways Corp., 712 F. Supp. 3d at 122, 152–53, 164.

[6] Tapestry, Inc., 755 F. Supp. 3d at 406, 457–58.

[7] See U.S. Dep’t of Justice & Fed. Trade Comm’n, supra note 2 (noting that when a merger involves competing buyers, the DOJ and FTC consider whether it substantially lessens competition for suppliers and other providers, not just consumers).

[8] See United States v. Bertelsmann SE & Co. KGaA, 646 F. Supp. 3d 1, 42, 56 (D.D.C. 2022) (referencing expert testimony that the merger would cause advances for Penguin Random House authors to decrease by roughly 4%, and would cause advances for Simon & Schuster authors to decrease by 11.5%).

[9] See Press Release, Fed. Trade Comm’n, FTC Challenges Illumina’s Proposed Acquisition of Cancer Detection Test Maker Grail (Mar. 30, 2021), https://www.ftc.gov/news-events/news/press-releases/2021/03/ftc-challenges-illuminas-proposed-acquisition-cancer-detection-test-maker-grail [https://perma.cc/7B4S-535R] (“If this acquisition is consummated, it would likely reduce innovation in this critical area of healthcare, diminish the quality of MCED tests, and make them more expensive.”).

[10] See U.S. Dep’t of Justice & Fed. Trade Comm’n, supra note 2.

[11] See, e.g., United States v. JetBlue Airways Corp., 712 F. Supp. 3d 109, 142 (D. Mass. 2024) (relying heavily on the government’s econometric experts and contemporaneous internal documents showing sustained head-to-head competition).

[12] See, e.g., id. at 164 (ordering the airlines permanently enjoined from executing the proposed merger); Bertelsmann, 646 F. Supp. 3d at 42, 56 (ordering the merger between publishers be enjoined, relying in part on evidence supplied by expert testimony).

[13] See DAMITT 2024 Annual Report: Merger Enforcement at Low Tide on Both Sides of the Atlantic, but 2025 May Bring a Sea Change, Dechert (Jan. 30, 2025), https://www.dechert.com/knowledge/publication/2025/1/damitt-2024-annual-report.html [https://perma.cc/VAB4-6GJA] (noting that 2024 ended with 17 concluded significant merger investigations that lasted an average of 11.3 months, compared to 12 concluded significant merger investigations that lasted an average of 10.6 months in 2023).

[14] See Florian Kästle, Succeed in M&A in Times of Heightened Regulatory Scrutiny, Baker McKenzie (May 2024), https://www.bakermckenzie.com/en/insight/publications/2024/05/succeed-in-ma-in-times-of-heightened-regulatory-scrutiny [https://perma.cc/B7AS-AZ74] (recommending that early-stage analysis involves collecting relevant materials and dates, interviewing key business people, and hiring expert economists to analyze the available evidence); Kady D. Ashley et al., Managing Deal Risks in a Challenging Regulatory Environment: Strategies and Deal Terms, Skadden (Mar. 2024), https://www.skadden.com/insights/publications/2024/03/insights-special-edition/managing-deal-risks-in-a-challenging-regulatory-environment? [https://perma.cc/H3UT-MYXD] (suggesting that having a regulatory roadmap combined with smart transaction planning and implementation is essential for M&A success).

[15] See First Merger Settlements Under Trump 2.0 Signal the Return of Remedies, Davis Polk (June 3, 2025), https://www.davispolk.com/insights/client-update/first-merger-settlements-under-trump-20-signal-return-remedies? [https://perma.cc/CD4X-T98R] (announcing that the FTC would require the parties to divest assets to win approval of the proposed acquisition).

[16] See Steven A. Reed et al., 2024 Antitrust & Competition Year in Review and Trends for 2025, Morgan Lewis (Jan. 2025), https://www.morganlewis.com/-/media/files/publication/morgan-lewis-title/white-paper/2025/2024-antitrust-competition-year-in-review-and-trends-for-2025.pdf [https://perma.cc/ZJ4B-UPMZ] (“Antitrust enforcement traditionally relies on market definition and accompanying concentration levels to assess competitive harm.”).

[17] Kästle, supra note 14.

[18] Kästle, supra note 14; First Merger Settlements Under Trump 2.0 Signal the Return of Remedies, supra note 15; Reed, supra note 16.

[19] US Deals Blocked by Regulators or Facing Intense Scrutiny, Reuters, Dec. 11, 2024, https://www.reuters.com/markets/deals/us-deals-blocked-by-regulators-or-facing-intense-scrutiny-2024-11-14/ [on file with the American University Business Law Review] (documenting numerous high-value deals that were blocked, abandoned, or faced heightened scrutiny in 2023–2024).