With antitrust enforcement of the technology sector making headlines daily, and as lawmakers focus on strengthening and potentially reforming antitrust laws as a tool to regulate the tech industry, we anticipate a significant increase in scrutiny by US federal antitrust authorities of vertical mergers, including merger of complements and so–called “diagonal mergers” in the technology sector.

Notwithstanding the current challenges of vertical merger enforcement, on June 30, 2020, the Federal Trade Commission (”FTC”) and the Department of Justice (”DOJ”) issued guidelines (the “Vertical Merger Guidelines”) describing the practices, techniques and enforcement policies the agencies use to evaluate vertical mergers, and on December 22, 2020, the FTC issued additional guidance on Vertical Merger Enforcement (the “Commentary”).

Tech companies and dealmakers should be aware of the type of technology related M&A transactions that may potentially be captured under the Vertical Merger Guidelines and Commentary, along with current enforcement priorities at the agencies.