Vertical Merger Enforcement: A Shift to Remedies Over Litigation

A recent high profile merger clearance—Google/Wiz—signals a pragmatic tone in vertical merger enforcement under the current administration.  In the matter, Google proactively made open commitments to defuse familiar vertical narratives—specifically committing to keeping the acquired business broadly available across competing cloud providers and preserving marketplace access for third-party security tools. This outcome is especially instructive because technology markets may face the sharpest vertical scrutiny.  FTC Commissioner Mark Meador recently underscored that foreclosure in software-centric ecosystems often turns less on physical bottlenecks and more on strategic design and contractual leverage. He claims that can amount to efforts to raise switching costs or locking out rivals (or what he calls “moat building”).¹  Taken together, this outcome suggests not a wholesale retreat from vertical theories but a more pragmatic path to “yes” when companies can credibly neutralize foreclosure and data access‑risk narratives.

That strategic posture from the Department of Justice (DOJ) and Federal Trade Commission (FTC) may reflect a calibrated response to a stubborn reality from the last decade: litigated vertical challenges are hard to win.  Courts typically require deal-specific proof that a merger would create both the ability and incentive to handcuff rivals in ways that harm consumers, and they demand that proof be anchored in real-world market evidence. Courts have also repeatedly credited workable remedies and binding commitments and faulted the government’s case when it effectively assumes those constraints away. This evidentiary burden is made heavier by the government’s inability to rely on structural market share presumptions or ordinary course documents showing the loss of intense head-to-head competition, tools available (and heavily relied upon) in horizontal merger cases.

The Trump II antitrust team’s strategic choice is best understood as a spectrum: on one end, greater receptivity to well‑designed remedies (e.g., targeted divestitures, supply and access commitments, information firewalls) that restore predictability; on the other, continued skepticism toward vertical deals involving essential inputs or sensitive data—but with a lower appetite to litigate vertical theories in court. Early actions fit this calibration: to date, the administration has favored negotiated outcomes over outright litigation. Most notably, the FTC cleared the Boeing/Spirit AeroSystems transaction subject to a consent order requiring targeted divestitures and ongoing supply commitments to protect rivals. At the same time, recent technology merger reviews underscore that agencies may probe hard but are prepared to clear vertical deals where access and supply commitments meaningfully address the central competitive concern.

Whatever enforcement path the administration takes, the judicial baseline remains unchanged: vertical cases still turn on concrete evidence of ability, incentive, and profitability of foreclosure, not theory.  Pre‑committed access to the critical input and information firewalls can genuinely neutralize those risks. That combination—high proof burdens plus remedy receptivity—points toward a more remedy-oriented approach to vertical merger enforcement for the foreseeable future.

How Vertical Merger Enforcement Reached an Inflection Point

Trump I — Enforcement Revival. After decades in which no vertical merger challenge had been litigated—reflecting the government’s longstanding reluctance to contest vertical deals in court—DOJ under Trump I broke the mold in 2017 by suing to block the AT&T/Time Warner merger.  Although that high‑profile vertical challenge ultimately failed in court, it revived vertical enforcement as a live and contested issue.  The Trump I Administration also emphasized structural remedies—such as divestitures—over behavioral promises even for vertical deals, arguing that the latter were ineffective at protecting competition.² A visible and early example of this settlement approach was DOJ’s consent in Bayer/Monsanto that required divestitures of certain Bayer seed treatment businesses to resolve concerns stemming from the combination of Monsanto’s leading corn and soybean businesses with Bayer’s leading positions in seed treatments.³ This period also saw the release of the 2020 Vertical Merger Guidelines, the first major update to vertical merger guidance since 1984 and the first standalone vertical merger guidance ever. Unlike the 1984 Merger Guidelines, the 2020 Vertical Merger Guidelines spotlighted vertical risks such as input and customer foreclosure, enhanced bargaining leverage, and access to rivals’ competitively sensitive information. At the same time, these guidelines balanced these risks against the recognition that “vertical mergers often benefit consumers through the elimination of double marginalization.”⁴ 

Biden — Expansion and Disruption. The Biden‑era antitrust enforcers moved from longstanding assumptions about the benefits of vertical integration to a broader, more skeptical posture.  In September 2021, the FTC (on a party‑line vote) rescinded the 2020 Vertical Merger Guidelines as “unsound,” signaling a tougher view of vertical efficiencies.⁵ The same day DOJ announced it was re‑reviewing the guidelines to ensure they were “appropriately skeptical of harmful mergers” and questioned whether the guidelines over‑emphasized price quantification.⁶ In December 2023, DOJ and the FTC jointly issued the 2023 Merger Guidelines, which expanded the playbook for vertical theories and de-emphasized efficiencies. These shifts made the Biden period less predictable for merging companies.

Courts — Require Hard Facts and Credit Remedies. Even as DOJ and the FTC ramped up vertical merger scrutiny, courts have largely held the line on proof—repeatedly rejecting theories built on predictive models or testimony inconsistent with real-world market facts. Since the Trump I revival, courts have reached the merits on vertical harm theories in five cases— AT&T/Time Warner (2018), UnitedHealth/Change Healthcare (2022), Illumina/Grail (2023), Microsoft/Activision (2023), and Tempur Sealy/Mattress Firm (2025).

Several themes recur.  In three of the five litigated cases, courts rejected foreclosure (AT&T/Time Warner, Microsoft/Activision) and data‑misuse (UnitedHealth/Change Healthcare) theories that were speculative—especially where marketplace realities, prior industry behavior, or internal deal models cut against the agencies’ predictions. Courts treated third-party testimony cautiously when it appeared self-interested or lacked objective support. They also relied heavily on “natural experiments” to stress-test agency predictions—examining prior vertical integrations (AT&T/Time Warner, Microsoft/Activision), evidence of competitor viability despite exclusion from a major outlet (Tempur Sealy/Mattress Firm), or pre-merger access to comparable data (UnitedHealth/Change Healthcare).

Proposed remedies and binding commitments were likewise central to the analysis. Across all five cases, courts were receptive to arguments that binding, practicable commitments changed the competitive effects calculus in the real-world.  Several opinions faulted the agencies for modeling harm as though those constraints did not exist.

At the same time, Illumina/Grail shows the limits of an argument companies often emphasize in vertical cases: that engaging in foreclosure would risk reputational harm. While the court acknowledged that fear of reputational damage can, in theory, deter foreclosure, it gave that concern little weight where the company holds monopoly power over the critical input.

Taken together, these cases reflect a stable judicial baseline. Vertical merger enforcement turns on concrete evidence of likely harm assessed against real-world market realities and credible remedies—a dynamic that often favors negotiated solutions over litigation where parties can propose targeted protections (such as interoperability commitments, supply assurances, data firewalls) that directly address the alleged theory of harm.

The Potential Emerging Trump II Vertical Merger Playbook and Practical Solutions to Navigate Regulatory Risks

The string of (mostly losing) vertical merger cases for the government will likely shape how DOJ and the FTC approach complex, vertically structured deals going forward. For Trump II, that likely means a remedy‑first posture and a very limited appetite to litigate vertical challenges. That instinct has precedent: after the AT&T/Time Warner loss, Trump I brought no further vertical lawsuits—it settled five by consent and cleared two without conditions via closing statements. The FTC’s recent Boeing/Spirit consent order is an early signal that Trump II may stay that course—favoring predictable, remedy‑oriented outcomes over courtroom risk.

A recent technology merger clearance may further reflect this calibration. In October 2025 DOJ unconditionally cleared Google’s $32 billion acquisition of Wiz⁷, a cloud‑native security platform, which some warned might give Google the means and incentive to disadvantage rival cloud or cybersecurity providers. Google publicly committed at announcement—and again at closing—to keep Wiz fully open to competing cloud providers and to maintain access for rival third party cybersecurity tools in Google’s marketplace.⁸  

Practice Pointers. The last decade of vertical merger enforcement offers clear lessons for merging companies to strengthen DOJ and FTC clearance prospects and, if necessary, prevail in court.

1. Build a strong evidentiary record showing procompetitive rationale. Courts have treated the absence of “smoking‑gun” intent documents as persuasive evidence that a merged firm lacks the incentive to foreclose, as seen in AT&T/Time Warner, UnitedHealth/Change, and Microsoft/Activision. By contrast, the decade’s only government win—Illumina/Grail—featured deal‑rationale evidence supporting an incentive to foreclose.  This means merging parties, particularly the buyer, should ensure the deal team is aligned on the procompetitive rationales so these themes permeate the document record. For example, merging parties could model financial projections to include sales to rivals or show how the merger would expand product choices. They should document why the combined firm’s incentives align with maintaining openness (and why degrading rivals would be self-defeating).
2. Document and quantify consumer benefits. Although it is widely accepted that vertical mergers often yield cost savings, merging companies should model the expected cost savings, because the FTC and DOJ will demand verification, even if they independently verify in practice.   
3. Offer credible commitments to remedy concerns. Parties should come prepared with remedy packages that are directly responsive to the core competitive concerns. Ideally, these should be irrevocable open offer commitments.  Foreclosure concerns can often be addressed by extending existing supply, licensing, or access arrangements on comparable terms, while concerns about access to competitively sensitive data can be addressed through robust firewalls. Where self‑preferencing concerns arise, interface‑neutrality commitments may be appropriate to ensure that third‑party services are not disadvantaged in terms of access, functionality, performance, or visibility relative to the parties’ own services.
4. Show, Don’t Tell—Via Natural Experiments. Courts have consistently relied on natural experiments to infer whether foreclosure is likely.  When available, merging companies should prepare real‑world comparators (prior vertical integrations, past exclusions, cross‑platform history) to undercut any foreclosure theory.