Is The Government Losing Its Merger Home Field Advantage?

The conventional wisdom is that the government has a significant advantage when challenging mergers in court, and that this advantage is especially difficult to overcome when the government presents major customer witnesses opposing the transaction. However, three recent government court losses in which the Federal Trade Commission (FTC) or Department of Justice (DOJ) teamed up with state attorney generals challenge that conventional wisdom. In each case, the trial judge subjected the government's theories and proof to close and skeptical analyses. Two courts discounted the testimony of major customers presented by the government and two courts gave considerable weight to “fixes” entered into by the defendants that lessened the alleged anticompetitive effects of the challenged transactions.