Antitrust Clearance
Antitrust clearance is the approval a competition authority gives to a merger before it may complete, after reviewing whether the combination would substantially lessen competition — the DOJ or FTC in the US, the Commission in the EU, the CMA in the UK, and every jurisdiction whose thresholds the deal crosses. It is a condition precedent in most deals above a size, a timetable of months, and why some signed deals never close.
- Also known as
- Merger control, Competition clearance, Merger clearance
- Used at
- every deal above the filing thresholds (in the US, about $120m of transaction value under Hart-Scott-Rodino in 2025; in the EU, combined worldwide turnover above €5bn with EU turnover tests; each country has its own), and increasingly deals below them that authorities call in
- Binding
- yes — completing without clearance ("gun-jumping") is unlawful and fined; a deal that is prohibited cannot proceed, and one already closed can be unwound
- Typical timetable
- a first-phase review of 25–40 working days; a second phase of four to six months if concerns arise; multi-jurisdiction deals run reviews in parallel and close when the last one clears
- Typical outcomes
- unconditional clearance (most deals), clearance with remedies (divestiture of an overlapping business, behavioural commitments), or prohibition — rare, but Visa–Plaid was abandoned under a DOJ suit in 2021, and fintech deals since face nascent-competitor theories
- Parties
- the merging companies and their competition counsel, the authorities, and the customers and competitors the authorities interview
How antitrust clearance works in practice
A payments group agrees to buy a competitor. Counsel maps the filings: the deal crosses thresholds in the US, the EU and two other countries, so four reviews. The parties prepare the filings — market definition, shares, the competitive rationale, internal documents (which the authorities will read for what the deal is really for) — and the sale agreement makes the clearances conditions precedent with a long-stop date. The authorities review: in phase one they define the markets, compute shares and concentration, and ask customers and rivals whether the deal worries them. Most deals clear there. Deals that combine large shares, or remove a competitor the authority thinks mattered, go to phase two: months of economic analysis, a statement of objections, and a negotiation over remedies.
The remedies are the price of getting through. A divestiture sells the overlapping business — a country, a product line — to a buyer the authority approves, and the deal's synergy case shrinks by that much. Behavioural commitments — to supply rivals, to keep prices, to maintain interoperability — bind the merged firm for years. The parties decide before signing how much remedy they will accept, and the agreement says so; a "hell or high water" clause obliges the buyer to accept whatever is required, a narrower one lets it walk.
Fintech has become a focus: the Visa–Plaid suit argued that a nascent competitor could not be bought by the incumbent it threatened, and reviews of payments and data deals since have asked the same question.
Example
A processor agrees to buy a rival for €900m. Filings in the EU, the UK and the US. The EU and US clear in phase one; the UK's CMA, where the combined share of a segment is 38%, opens a phase two. Six months of review produce a finding that the deal would lessen competition in that segment; the remedy is the divestiture of the target's UK business in that segment — €60m of revenue — to an approved buyer. The parties, whose agreement carried a €25m break fee if clearance failed and a remedy cap of €80m of revenue, accept. Completion is eleven months after signing, three months after the long-stop date, which had been extended once. The divested unit sells for €110m; the buyer's synergy case, which counted it, is €12m a year lighter.
Common mistakes
- Announcing synergies that the authority then reads as market power. - Internal documents that describe the target as a threat to be removed. - A long-stop date set without the phase-two timetable in it. - A remedy cap in the agreement so low the buyer can walk on the first request, or so high it must sell half the business. - Closing in one country before clearance in another, and being fined for it.