Despite the defense’s longevity, the stringent standards underlying the doctrine have limited its use over time. The defense has seldom been raised by merging parties in courts or before the Agencies and, when invoked, has rarely succeeded.
Fina and Mehta’s article provides an overview of the failing firm defense and highlights two recent investigations by the Federal Trade Commission and the Department of Justice, in which the defense has succeeded.
Together, these cases suggest that the failing firm defense, in its current, longstanding incarnation, is alive and well. Moreover, the cases illustrate the importance of a “shop” of the allegedly failing firm’s assets and the extent to which the Agencies, in the right case, may act quickly and creatively in validating the defense.
The complete article is available here.
Information about the Antitrust and Competition Law Practice at Baker Botts is available here.
Tom Fina represents companies before the competition agencies in the United States and abroad. He has guided hundreds of transactions through the U.S. and international antitrust merger review process. His bio is available here.
Vishal Mehta’s practice focuses on antitrust counseling, litigation and the defense of corporate clients in connection with domestic and international mergers and acquisitions. His bio is available here.
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