Clifford Chance

FTC's Reinstatement of Prior Approval – The Next Step Forward For the FTC As It Brushes Off an Old Tool

October 28, 2021

The Federal Trade Commission recently reinstated a decades-old policy requiring acquiring parties subject to an FTC merger enforcement order (i.e., consent decree) to obtain prior approval for any future transaction for at least 10 years. This Prior Approval Policy applies to any future transaction by the acquiring party irrespective of whether the thresholds of the Hart-Scott-Rodino Act are met. The approval requirement applies to any future deals involving similar markets to those in the original transaction, although in some cases the FTC may require notification of broader transactions. The FTC noted that it may even apply the Prior Approval Policy in transactions where parties abandon transactions after the FTC has filed a complaint to block the deal. The new policy represents one of several recent measures by the FTC that demonstrates its increasing scrutiny of mergers and conduct it believes to be anticompetitive and its efforts to deter companies from entering into anticompetitive mergers.

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