Pre-Merger Review and Challenges Under the Clayton Act and the Federal Trade Commission Act
Released: 2017-09-27T00:00:00

Summary:
Preserving competition is an overarching purpose of federal laws governing business mergers. Though other federal laws, including the Sherman Act, seek to address anticompetitive behavior relating to monopolization, two federal statutes, in particular, address harms that may result from proposed mergers. Section 7 of the Clayton Act prohibits mergers "in any line of commerce or in any activity affecting commerce" that may substantially lessen competition or tend to create a monopoly. Section 5 of the Federal Trade Commission Act (FTC Act) prohibits unfair methods of competition, which includes any activity that violates Section 7 of the Clayton Act.
Pursuant to the Clayton and FTC Acts, Congress authorized the Department of Justice (DOJ) and the Federal Trade Commission (FTC) to determine whether a proposed merger would substantially lessen competition or tend to create a monopoly. Title II of the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act) requires transacting parties, which exceed certain sizes, to report significant planned mergers and acquisitions to the FTC and DOJ so that the agencies may determine whether the proposed transactions raise anticompetitive concerns. If the FTC or DOJ determines that such concerns exist, the agencies may commence administrative or judicial proceedings to block the proposed transaction. Reviewing courts and administrative law judges consider a variety of factors when determining whether a proposed merged complies with federal antitrust laws.
This report examines the primary statutes and processes that govern federal pre-merger review and merger challenges.

subsections: section_title: Introduction
paragraphs: Pursuant to the Clayton Act and the Federal Trade Commission Act (FTC Act), Congress charged the Department of Justice (DOJ) and the Federal Trade Commission (FTC) with reviewing whether proposed mergers comport with federal antitrust laws and preventing anticompetitive mergers. This report discusses statutes governing federal pre-merger review, along with DOJ and FTC guidelines for assessing whether a proposed merger complies with statutory requirements. This report also discusses the DOJ's and FTC's processes for challenging a merger prior to its consummation.
section_title: Pre-Merger Review: Application of the Clayton Act and FTC Act
paragraphs: While other federal laws, including the Sherman Act, seek to deter anticompetitive harms caused by monopolization and agreements to restrain trade, two federal statutes, the Clayton and the FTC Acts, relate particularly to proposed mergers. Section 7 of the Clayton Act applies to mergers "in any line of commerce" when their effect "may be substantially to lessen competition, or to tend to create a monopoly" unless the merger is statutorily exempt. Section 5 of the FTC Act prohibits unfair methods of competition and includes any activity that violates Section 7 of the Clayton Act. The FTC generally applies standards similar to DOJ's when assessing transactions under Section 7 of the Clayton Act pursuant to Section 5 of the FTC Act. 
By prohibiting mergers that negatively affect competition, the Clayton and FTC Acts aim to preserv e rather than enhance competition and to protect overall market competition rather than individual competitors. Accordingly, mergers may injure market competitors but not violate antitrust laws. Moreover, because Section 7 of the Clayton Act and Section 5 of the FTC Act aim to prevent anticompetitive harms from occurring, they look to the likelihood of future harm. To violate these statutes, therefore, the transaction must be likely, rather than certain, to have an anticompetitive effect.
section_title: The Hart-Scott-Rodino Antitrust Improvements Act and the Pre-Merger Review Process
paragraphs: The Hart-Scott-Rodino Antitrust Improvements Act (HSR Act) requires businesses exceeding certain sizes to report proposed mergers and other transactions valued above specified thresholds to the DOJ and FTC so that the agencies may examine whether those transactions comply with federal antitrust laws. Businesses may only complete the proposed merger once the statutory waiting period has expired (typically 30 days after filing the report, but 15 days in the case of a cash tender offer, or such other time if the agency shortens or extends the waiting period). If the agency determines that the merger would be likely to lessen competition substantially, the agency may either negotiate with the transacting parties to address its concerns or act to block the merger.
As part of the notice filed under the HSR Act, the transacting parties must provide certain non-public information to the agencies, including (1) information about themselves, including their balance sheets; (2) information related to the proposed transaction's planning and execution; and (3) information regarding the product, service, and geographic markets in which they operate. Information submitted during the process is exempt from the Freedom of Information Act and the agency cannot make it public except in the course of an administrative or judicial proceeding.
Upon reviewing the pre-merger notification, the DOJ or FTC seeks clearance from the other agency to investigate the transaction. When both agencies request clearance, the agency with the most expertise in reviewing transactions in the relevant markets generally conducts the investigation subject to jurisdictional limitations. The agency selected to investigate the proposed merger reviews information provided by the transacting parties and other market participants. Prior to the expiration of the 30-day waiting period, the reviewing agency decides whether (1) to issue a second request for more information or (2) to allow the transaction to complete, either by terminating the waiting period early or by letting the waiting period expire without taking further action. If the parties voluntarily withdraw their filing and subsequently refile, the required waiting period restarts. 
If, during the initial waiting period, the reviewing agency needs additional information to assess whether the prospective merger complies with antitrust laws, the agency may require the transacting parties to provide further information and documents (commonly referred to as the "Second Request"). The reviewing agency may also gather evidence from entities that are not transacting parties. For example, the agency may interview, either informally or under oath, customers and other market participants or seek information from industry observers and academics.
Once the parties have substantially complied with the Second Request, the reviewing agency has 30 days (or 10 days, in the case of a cash tender offer) to review the information and decide how to proceed. If parties fail to comply substantially with the Second Request, the reviewing agency may request a federal district court to order compliance and to extend the waiting period during the time it takes to reach substantial compliance. If the waiting period expires, the parties may complete the transaction. Depending upon the merger's complexity, a significant amount of time might pass between the reviewing agency's issuance of a Second Request and a final decision. 
A summary of the clearance process is depicted in Figure 1 .
section_title: Substantive Review of Proposed Mergers by the FTC and the DOJ
paragraphs: The FTC and DOJ employ shared guidelines to assess whether a proposed merger is permissible under the FTC and Clayton Acts. These standards apply to various types of transactions, including mergers between competing entities or potentially competing entities in a relevant market (horizontal mergers) and mergers between non-competing entities that operate within related industries (vertical mergers). Because horizontal and vertical mergers raise somewhat different competitive concerns, they are discussed separately below. 
subsections: section_title: Mergers Within the Same Industry (Horizontal Mergers)
paragraphs: The FTC and DOJ use the Horizontal Merger Guidelines ("Guidelines") when reviewing whether a proposed merger between competitors raises anticompetitive concerns under the Clayton and FTC Acts. The Guidelines adopt "a fact-specific process through which the [FTC or DOJ], guided by their extensive experience, apply a range of analytical tools to the reasonably available and reliable evidence to evaluate competitive concerns in a limited period of time." The Guidelines primarily examine whether a proposed merger would unduly enhance the transacting parties' "market power," which is a firm's ability, without causing economic harm to itself, to raise prices, reduce output, reduce innovation, or otherwise harm consumers. The agencies view a proposed merger's probable enhancement of market power as increasing the likelihood that the merger will substantially lessen competition. To identify lines of commerce and geographic areas that the merger may affect and gauge its impact on the transacting parties' market power, a reviewing agency, assessing a horizontal merger under the Clayton or FTC Act, first defines the relevant product and geographic markets.
subsections: section_title: Product Markets
paragraphs: A "product market" consists of "all products 'reasonably interchangeable by consumers for the same purposes.'" To identify product markets that the merger would affect, the reviewing agency generally employs the "Hypothetical Monopolist Test," which examines whether consumers in the market would be able to switch from one product to a close substitute in response to a small but significant price increase or benefit reduction. If consumers could switch products, the agency next considers whether they could do so in sufficient numbers to render any price increase or benefit reduction unprofitable to the responsible party. If a sufficient number of consumers would likely switch from one product to another, the agency might find those products to belong to the same product market. 
The DOJ's 2016 suit to block Deere and Company's ("John Deere") acquisition of Monsanto, Co.'s Precision Planting ("Precision Planting") subsidiary illustrates how a reviewing agency defines a product market. In this suit, the DOJ defined the relevant product market as high-speed precision planting systems that were factory-installed on new planters or retrofitted on existing planters. The DOJ argued that other types of planting systems were not "effective substitutes" for high-speed systems, making it unlikely that high-speed planting systems users would switch to those alternatives, even if prices for high-speed systems rose significantly.
In another recent case, the DOJ sued to block the proposed merger of Aetna, Inc. and Humana, Inc.—two large health insurance companies that offer Medicare Advantage plans, which provide benefits akin to traditional Medicare benefits along with other benefits. The DOJ concluded that the proposed Aetna-Humana merger would affect the market for Medicare Advantage policies. The DOJ found, however, that traditional Medicare was not part of the relevant market because the DOJ believed that, given a small but significant Medicare Advantage plan price increase or benefit reduction, seniors enrolled in those plans would be unlikely to switch to traditional Medicare in sufficient numbers. The district court agreed, finding that Medicare Advantage policies, but not traditional Medicare, constituted the relevant market.
section_title: Geographic Markets
paragraphs: With respect to the relevant geographic markets, the Supreme Court has stated: "Congress prescribed a pragmatic, factual approach to the definition of the relevant market and not a formal legalistic one. The geographic area selected must, therefore, both correspond to the commercial realities of the industry and be economically significant." Depending on the products and services at issue, a reviewing agency could identify the geographic market as the entire United States or a smaller region. For instance, when DOJ reviewed John Deere's proposed acquisition of Precision Planting, the agency found the sale of high-speed precision planting systems to be a national market. For the Aetna-Humana merger, DOJ defined the relevant geographic markets as "hundreds of counties across the United States" where Aetna and Humana compete to enroll seniors in Medicare Advantage plans. 
subsections: section_title: Measuring Market Power
paragraphs: After defining the relevant market, the reviewing agency identifies the market participants, their market shares, and the level of market concentration. A reviewing agency typically begins a market-power assessment by comparing existing market concentration with the likely concentration following the merger. To measure market concentration, reviewing agencies typically employ the Herfindahl–Hirschman Index (HHI), which is calculated by "summing the squares of individual firms' market shares." Some U.S. courts also rely on HHI calculations to assess whether a transaction would create market power. Under the Merger Guidelines, the DOJ and FTC presumptively deem transactions that increase a market's HHI by 200 or more points and result in the HHI being above 2500 (a highly concentrated market) to lessen competition substantially. However, "[t]he presumption may be rebutted by persuasive evidence" that the transaction likely would not have anticompetitive consequences. 
section_title: Evaluation of Potential Harms
paragraphs: In addition to considering market concentration impacts, the FTC and DOJ might consider the market impacts of other factors in the transaction as discussed below.
subsections: section_title: Potential Effects on Pricing
paragraphs: Because mergers reduce the number of market participants, a merged entity, facing less competition, might be more likely to engage in behavior harmful to consumers, such as raising prices. If consumers treat the transacting parties' products as substitutes, a reviewing agency might be concerned that the merged entity could behave anti-competitively. To illustrate, when the DOJ sued to block Anthem, Inc., from acquiring competing health insurance provider, Cigna, Corp, the DOJ argued that the companies competed head-to-head to sell insurance to employers with more than 5,000 employees in the national market and in fourteen state markets, and were often finalists in competitive bidding. The DOJ further contended that the merger, by eliminating competition between the two companies, would encourage the merged entity to raise prices unilaterally above otherwise competitive levels.
section_title: Potential Effects on Product Output
paragraphs: The reviewing agency might also consider whether, in markets with largely homogenous products, a merged entity would have incentives either to suppress its output by slowing production or to reduce its production capacity in order to elevate prices. For example, a merged entity might reduce the excess capacity of one of its components, which pre-merger had been constraining a rise in market prices. The merger might also provide the merged entity with a larger sales base, increasing the benefits of a price hike caused by reducing output. The Merger Guidelines provide an illustrative example of how a merged entity might reduce product output and thereby increase prices for consumers:
Firms A and B both produce an industrial commodity and propose to merge. The demand for this commodity is insensitive to price. Firm A is the market leader. Firm B produces substantial output, but its operating margins are low because it operates high-cost plants. The other suppliers are operating very near capacity. The merged firm has an incentive to reduce output at the high-cost plants, perhaps shutting down some of that capacity, thus driving up the price it receives on the remainder of its output. The merger harms customers, notwithstanding that the merged firm shifts some output from high-cost plants to low-cost plants.
section_title: Potential Effects on Innovation
paragraphs: A reviewing agency may also consider a merger's potential effects on innovation. It may find that "combining two of a very small number of firms with the strongest capabilities to successfully innovate in a specific direction" hinders innovation in the market. For example, when the DOJ reviewed Dow Chemical's ("Dow") proposed merger with E. I. du Pont de Nemours and Company ("DuPont"), it observed that Dow and DuPont competed head-to-head in producing and selling certain herbicides and that DuPont had recently introduced a new herbicide that competed directly with one marketed by Dow. The agency found that competition between the two companies had "spurred research, development and marketing of new and improved" products and that the merger would eliminate such competition. Ultimately, DuPont agreed to divest its market-leading herbicide to address the DOJ's competition concerns. In another example, the DOJ cited potential negative impacts on innovation when it opposed AT&T, Inc.'s ("AT&T") proposed acquisition of T-Mobile US ("T-Mobile"). Because T-Mobile competed with AT&T in innovation, the DOJ cited T-Mobile's potential loss as a primary reason for seeking an injunction.
section_title: Coordination Among Firms
paragraphs: A reviewing agency may also examine whether a merger would unacceptably magnify market participants' opportunities for coordinated interaction, which is "conduct by multiple firms that is profitable for each of them only as a result of the accommodating reactions of others." One example of coordinated interaction is parallel action, which is when one market participant raises prices (or makes some other change), and other market participants take the same action in lockstep. In considering the risk of coordinated interaction, the FTC and DOJ generally take the view that the fewer participants in a given market, the more likely they are to engage in parallel action following a merger. 
For example, when the DOJ challenged AT&T's proposed acquisition of T-Mobile, the agency identified the potential for coordinated interaction as a reason to block the transaction. The DOJ claimed that, if AT&T acquired T-Mobile, the number of nationally competitive wireless service providers would decrease from four to three. The DOJ contended that T-Mobile's strategy of positioning its service as a lower-priced alternative to services offered by AT&T and other major service providers constrained AT&T and the other providers from increasing their prices. The DOJ asserted that eliminating T-Mobile as a competitor might lead the remaining competitors to coordinate, resulting in higher prices nationwide for wireless services. Similarly, the FTC was concerned that H.J. Heinz, Co.'s proposed merger with Beech-Nut Nutrition Corp. might lead the remaining major baby food producers to coordinate their behavior and raise prices above competitive levels. 
section_title: Market Entry, Efficiencies, and Other Considerations
paragraphs: In assessing a proposed merger's anticompetitive effect, the reviewing agency may also consider factors that support the transaction. The ability of other competitors to enter the market indicates the degree to which the merged entity could constrain behavior and pricing within that market. Easy market entry suggests that a proposed merger is less likely to reduce market competition, while significant barriers to entry, such as the need to engage in lengthy research and development or obtain regulatory approvals, suggests that a proposed merger would be more likely to reduce market competition.
Additionally, the DOJ and FTC recognize that "a primary benefit of mergers to the economy is their potential to generate significant efficiencies and thus enhance the merged firm's ability and incentive to compete[.]" Greater efficiency could provide benefits such as cost-reduction or increased services, potentially offsetting anticompetitive concerns raised by the merger provided, however, that "[t]he greater the potential adverse competitive effect of a merger, the greater must be the cognizable efficiencies, and the more they must be passed through to customers[.]" To support a proposed merger, the potential market efficiencies must be unlikely to be accomplished by a means other than the merger. They must also be reasonably verifiable and cannot "arise from anticompetitive reductions in output or service." The reviewing agency might also consider, among other things, whether one of the parties to a proposed merger has failed or is failing (i.e., whether it would soon exit the relevant markets as a competitor even if it did not merge with a competitor). 
section_title: Mergers in Related Industries (Vertical Mergers)
paragraphs: The DOJ and FTC also may examine a proposed merger's impact on product and geographic markets in which the transacting parties do not compete, if the transaction may nonetheless have a negative effect on competition in those markets. This situation generally arises when a merger would lead to one business entity controlling two or more stages of production and distribution normally done by separate entities—a situation known as vertical integration or a "vertical merger." In part because these transactions do not affect competition between actual or potential competitors and they can create competition-enhancing efficiencies, the agencies tend to view vertical transactions as less likely to be anticompetitive than horizontal transactions. 
The Horizontal Merger Guidelines, most recently amended in 2010, do not provide guidance on vertical mergers. The 1984 Guidelines were the last version to address vertical mergers directly. Those guidelines took the view that vertical mergers generally posed a less immediate threat to competition than horizontal mergers, in part because vertical integration involved entities that did not compete at the same level in the market and therefore had no impact on market concentration. However, the DOJ and FTC have taken enforcement action against some vertical mergers that the agencies viewed as substantially lessening competition, generally through consent agreements. In such cases, the agencies have considered whether the merged entity would have incentives to foreclose competition in part of the market (e.g., by cutting off an important avenue for distribution of a product or service or by eliminating customer access to a product or service) and whether the transaction would increase incentives for coordinated anticompetitive conduct in affected markets, among other factors. 
For instance, Comcast Corp.'s ("Comcast") joint venture involving NBC Universal, Inc. ("NBC") and General Electric Co. ("GE") was a high-profile example of vertical integration. In that transaction, Comcast, a powerful distributor of programming content, proposed to engage in a joint venture with GE that would enable Comcast to obtain effective control over NBC, an important programming content provider. The DOJ ultimately permitted the transaction, subject to conditions contained in a consent agreement. For example, because DOJ was concerned that Comcast could restrict competing online video program distributors from providing their customers access to NBC-owned programming, thereby driving consumers to Comcast's cable services, the consent agreement required the joint venture to make its programming available to online video distributers on equivalent terms offered to traditional programming distributors (e.g., other cable providers, satellite providers).
section_title: Potential Actions Following Completion of the Pre-Merger Review Process
paragraphs: Upon completing its review of a proposed merger, the reviewing agency decides whether (1) to permit the merger to consummate; (2) to take any action to block the merger; or (3) to negotiate with the transacting parties to place conditions on the merger's completion that alleviate the agency's anticompetitive concerns. The agencies permit most proposed transactions to complete without conditions. If the reviewing agency seeks to block a merger, the agency may bring an action against the transaction in a judicial and/or administrative proceeding (depending upon whether the DOJ or the FTC is the reviewing agency). In these circumstances, the transacting parties may abandon the deal or contest the government's case before a federal or administrative law judge. 
subsections: section_title: Merger Challenges by the DOJ
paragraphs: The DOJ pursues potential violations of the Clayton Act in federal court. Section 15 of the Clayton Act vests power to prevent and restrain violations of Section 7 in the federal district courts, and grants the DOJ authority to institute such proceedings. The DOJ may initially seek a preliminary injunction to block a merger from proceeding while litigation is ongoing. To shorten the potential duration of litigation, the DOJ and transacting parties often agree to consolidate the motion for a preliminary injunction with a motion for a permanent injunction. To obtain a permanent injunction against a merger, the DOJ must show by a preponderance of the evidence that the proposed transaction would violate the applicable antitrust law —a higher standard than required to obtain a preliminary injunction. 
In assessing whether a merger violates antitrust laws, the reviewing court is not bound by the DOJ's administrative review determination. If the district court denies the DOJ's request for a permanent injunction, the transacting parties may complete the proposed transaction. If the DOJ obtains a permanent injunction, which the transacting parties do not challenge or which a court upholds on appeal, the merger may not go forward. The DOJ and the transacting parties may also enter into a consent agreement to resolve the dispute. Such agreements might require one or both of the merging parties to divest particular assets or engage in other actions to alleviate potential anticompetitive effects of the transaction. When the DOJ has reached a consent agreement with the transacting parties, it will typically file both (1) a motion for an injunction in federal district court; and (2) a proposed consent agreement for approval by the court, along with other documents, such as a Hold Separate Order. The Hold Separate Order usually outlines the assets that the transacting parties must keep separate from the merged entity, and the parties must typically sell or spin off these assets into independent companies to alleviate the anticompetitive concerns raised by the merger. Once the reviewing court has approved the Hold Separate Order, the transacting parties may generally consummate the merger in accordance with the order's terms. 
Under the Tunney Act (also known as the Antitrust Procedures and Penalties Act), the DOJ must file consent agreements to resolve antitrust concerns with a federal court and, at the same time, publish the proposed agreement in the Federal Register for public comment prior to the court entering a judgment. The DOJ also must file any written comments related to the proposal with the court and publish them in the Federal Register. At the close of the comment period (typically 60 days), the DOJ must file with the court and publish in the Federal Register a response to the comments. After the agency has addressed the public comments, the reviewing court may enter a final judgment approving the consent order with the agreed-upon conditions, provided that the court finds the consent agreement to be in the public interest. 
section_title: Merger Challenges By the FTC
paragraphs: The FTC's process for challenging proposed transactions is different from the DOJ's. Unlike the DOJ, the FTC may use enforcement tools available under the FTC Act in addition to those available under the Clayton Act to challenge proposed mergers. And whereas the DOJ process for blocking mergers under the Clayton Act involves seeking injunctive relief in federal district court, the FTC has several administrative and judicial avenues to prevent mergers that violate antitrust laws. Under Section 11 of the Clayton Act, the FTC can challenge proposed mergers in most areas of commerce, with some exceptions, via an administrative adjudication that can be appealed to a federal court of appeals. The FTC also has administrative processes available to review proposed mergers that may be unfair methods of competition under Section 5(b) of the FTC Act. Section 13(b) of the FTC Act further provides the FTC authority to request a court to enjoin, preliminarily and permanently, activities that would violate the statutes the FTC administers. 
When the FTC decides to challenge a proposed merger and has not reached a consent agreement with the transacting parties, the agency typically files a motion for a preliminary injunction under Section 13(b) of the FTC Act in federal court alleging that the transaction would violate both Section 7 of the Clayton Act and Section 5 of the FTC Act. Section 13(b) of the FTC Act requires courts to issue preliminary injunctions "[upon] a proper showing that weighing the equities and considering the Commission's likelihood of ultimate success, such action would be in the public interest[.]" 
Around the same time that it files a motion for a preliminary injunction, the FTC will often commence administrative proceedings under the FTC and Clayton Acts by issuing a complaint and beginning proceedings before an FTC administrative law judge (ALJ) to determine whether the proposed transaction would violate federal law and any remedies. If the federal district court grants the preliminary injunction, the transacting parties may not complete the transaction during the administrative proceedings. The FTC has the option to continue administrative review of a merger even if the court denies its motion for a preliminary injunction and the transaction closes. However, if the court denies the FTC's request for a preliminary injunction, FTC rules require the administrative proceedings to be automatically stayed while the FTC determines whether to continue.
The Federal Trade Commissioners review all ALJ initial decisions when the agency has also filed a motion for a preliminary injunction in federal court. When reviewing an ALJ's initial decision, the FTC staff and the parties provide briefs to the Commission and the Commission may hear oral arguments before issuing a final decision. If the Commission decides that a transaction would substantially lessen competition, the parties have the option to appeal to a federal appellate court "within whose jurisdiction the respondent resides or carries on business or where the challenged practice was employed." If the parties decide not to appeal, the litigation ends and the parties cannot complete the transaction. 
In practice, the FTC may use both judicial and administrative processes to challenge proposed transactions, but it typically uses only administrative processes when it enters consent agreements with transacting parties because Congress has granted the Federal Trade Commissioners authority to approve consent agreements. If a consent agreement is reached, the FTC publishes the proposed complaint, the proposed consent agreement, and an analysis of the proposed consent agreement for public comment for a period of 30 days. The Federal Trade Commissioners rule on the consent agreement. 
Because consent agreements involving mergers may require divestitures, such agreements may involve Hold Separate Orders, requiring the parties to keep certain assets separate after completing their transaction. If the consent agreement involves a Hold Separate Order, the Commission may issue (i.e., vote to approve as opposed to merely publish) the complaint and the Hold Separate Order when it publishes the proposed consent agreement for comment. Following the public comment period and any resulting adjustments to the consent agreement, the final decision and consent agreement may be submitted to the Commission for approval. If the Commission approves, the FTC generally issues a complaint , if it has not already done so, and a Final Decision and Order, which incorporates the consent agreement and ends the proceedings. 
section_title: Conclusion
paragraphs: Federal antitrust law prohibits mergers and acquisitions that may substantially lessen competition. As the primary federal agencies charged with enforcing federal antitrust laws, the DOJ and FTC follow a congressionally mandated process that requires parties exceeding certain sizes to notify the agencies of sizable transactions so that one of the agencies may determine whether the planned transaction would violate antitrust laws. Highly fact-specific, the DOJ and FTC apply Section 7of the Clayton Act and Section 5 of the FTC Act, respectively, by assessing the proposed transaction's likely impact on competition within relevant markets identified by the agencies. After examining any evidence, the agencies may permit the transaction to proceed, negotiate with the parties to reach an agreement that alleviates antitrust concerns, or block the transaction.