Facing Reality: Litigating the Fix When Pre-Merger Negotiations Fail Sara Y. Razi

Abstract

“Litigating the fix” refers to the practice of defendants litigating divestitures or behavioral commitments (“the fix”) designed to resolve anti-competitive concerns, following rejection by the reviewing antitrust agency during the pre-complaint merger investigation. There have been relatively few cases with this posture, until recently. The vast majority of HSR-reportable mergers that were subject to remediation formerly were “fixed” via a settlement with the DOJ Antitrust Division or FTC, avoiding the need for litigation. But the antitrust agencies’ recent enforcement posture has caused them to be more circumspect about divestitures or other conditions, opting more often to challenge deals outright in litigation. This article examines the litigated decisions addressing this issue, the legal principles they rely on, and the legislative history behind the HSR Act and identifies the proper legal standards by which courts should resolve a government merger challenge in which the defendants have proposed a fix to address any identified competitive problems. The author concludes that the relevant inquiry for a reviewing court is whether the “fixed” transaction may substantially lessen competition, not (as the government argues) whether the proffered divestiture fully restores competition that may be—but for the fix—lost from the originally filed transaction.