The Department of Justice, Antitrust Division (DOJ) and Federal Trade Commission (FTC) (together the “Agencies”) submitted a note about efficiencies in merger control in connection with a June 17, 2025 Organisation for Economic Co-operation and Development (OECD) working group meeting. The Agencies cited favorably to recent merger enforcement actions and reiterated the high bar for crediting efficiencies when evaluating a transaction’s potential impact on competition.
Legal Framework
The Agencies’ note emphasized that while U.S. law allows for the consideration of efficiencies, they are rarely enough to justify clearance of an otherwise anticompetitive merger.[1] The Agencies explained that efficiencies must meet the following criteria to carry any probative weight:[2]
- Be merger-specific. An efficiency “must be ‘merger-specific, meaning that it cannot be achieved by either company alone.’”[3]
- Be verifiable, not speculative. Efficiencies are verifiable if they “specifically explain . . . how [they] would be created and maintained” and are “reasonably verifiable by an independent party.”[4]
- Prevent the threatened harm to competition in the relevant markets. Claimed efficiencies must be sufficiently large such that they overcome the threatened harm to competition in the relevant markets and defendants must show that the claimed efficiencies “would ultimately be passed on to consumers” in the relevant markets.[5]
- Are not the byproduct of anticompetitive reductions in output or service. The Agencies do not recognize claimed benefits if they will result in anticompetitive effects.[6]
The note further explores several cases discussing efficiencies, highlighting the concepts described above. For example, in U.S. v. Anthem, the court said that due to the highly concentrated market, the claimed efficiencies should be view skeptically.[7] In U.S. v. Bertelsmann SE & Co. KGaA, et al., the court rejected the efficiencies on verifiability grounds, saying that the model was unreliable, the model was not verified by an independent third party, and the district court was not in a position to verify the efficiencies.[8] In Illumina, Inc. v. FTC, the court rejected efficiencies because they were not merger-specific, there was no model or quantification to verify the efficiencies, and there was a lack of concrete plans.[9] Finally, in FTC v. Tapestry, the court found that the efficiencies did not outweigh the harm, in part because they were not merger-specific.[10]
Takeaways
The Trump-Vance administration is likely to approach efficiencies with skepticism, consistent with the prior administration. Companies contemplating an efficiencies defense for their deal should ensure in advance that any claimed efficiencies can meet all of the foregoing criteria. Further, if companies are engaging in a transaction with moderate to high antitrust risk, they should work with counsel to identify such efficiencies and lay the groundwork to defend the transaction with them as necessary, including by:
- Documenting planned efficiencies in detail;
- Analyzing whether the same results could be achieved absent the transaction;
- Engaging third parties such as economists to verify predicted efficiencies;
- Developing comprehensive plans to achieve efficiencies; and
- Assessing how those efficiencies will benefit consumers.
[1] Dept. of Justice and Fed. Trade Comm’n, Working Party No. 3 on Co-operation and Enforcement Efficiencies in Merger Control – Note by the United States, OECD (June 15, 2025) Para. 3.
[2] Id. at ¶ 5.
[3] Id. at ¶ 8 (citations omitted).
[4] Id. at ¶ 10 (citations omitted).
[5] Id. at ¶ 11 (citations omitted).
[6] Id. at ¶ 13 (citations omitted).
[7] Id. at ¶ 17 (citing U.S. v. Anthem, Inc., 855 F.3d 345, 366 (D.C. Cir. 2017)).
[8] Id. at ¶ 20 (citing U.S. v. Bertelsmann SE & Co. KGaA, et al., Trial Transcript at 2751:22–2751:1, 2766:17–22).
[9] Id. at ¶ 23 (citing Illumina, Inc. v. FTC, 88 F.4th 1036, 1059–61 (5th Cir. 2023)).
[10] Id. at ¶ 26 (citing FTC v. Tapestry, Inc., 755 F. Supp. 3d 386, 481–82 (S.D.N.Y. 2024)).
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