A PIPE is a financing structure through which a private sponsor provides liquidity to a public company in exchange for the company's nonregistered securities. The security often takes the form of convertible preferred equity (with a preference over the issuer's common stock in the event of liquidation, but convertible into common stock at the sponsor's option and in other specified circumstances) and may contain indicia of control such as special consent or voting rights and board representation.
Neither the U.S. Department of Justice Antitrust Division nor the Federal Trade Commission have challenged or brought an enforcement action involving a PIPE transaction to date. But a PIPE transaction may trigger Hart-Scott-Rodino filings, and the agencies have investigated partial acquisitions involving competitors under merger and nonmerger antitrust laws in the past.
In light of the regulatory and political attention on private equity investment activity, as well as the simultaneous decline in overall M&A activity and increase in PIPEs, the FTC or DOJ may decide to examine a PIPE transaction that raises competitive questions.
This article discusses potential considerations relevant to each of the U.S. antitrust statutes that may be applicable to PIPEs and other acquisitions of partial stakes.
A PIPE Transaction May Require HSR Act Filings if the Acquired Securities Are Voting or Contain Control Rights
As with any transaction, a partial acquisition may require an HSR filing depending on: (1) whether the acquisition involves voting securities, assets or a controlling interest in a noncorporate entity; (2) the size of the transaction; (3) the size of the parties (if applicable); and (4) the applicability of any exemptions under the HSR Act or rules.
If no voting securities, assets, or controlling interests are acquired, HSR filings generally are not required. However, an HSR filing may be required if the securities carry current rights to vote for the election of directors, such as convertible preferred shares with common-stock voting rights on an as-converted basis which are used in some PIPE transactions.
In transactions where the public company target is seeking an immediate injection of liquidity (and cannot afford to wait 30 days), the PIPE security may be structured as convertible preferred shares with "springing" voting or governance rights. Such rights are not current, but rather vest upon the expiration of any applicable HSR Act waiting period (or some subsequent event), or the exercise of the conversion (which also would be conditioned on the expiration of any applicable HSR Act waiting period).
If an acquisition of convertible securities initially requires an HSR filing, the subsequent conversion of those securities into common shares is not notifiable (unless the sponsor then acquires additional voting securities that exceed certain monetary thresholds). However, if the initial acquisition of convertible securities does not require an HSR filing, one may be required prior to the conversion.
The "Investment-Only" HSR Act Exemption May Apply to a PIPE, But the Agencies Have Construed It Narrowly
One exemption to the HSR Act filing requirements relevant in the context of partial acquisitions is "investment only." As its name implies, the exemption applies to purely passive investments, i.e., where the acquirer holds 10% or less of the issuer's voting securities with "no intention of participating in the formulation, determination, or direction of the basic business decisions of the issuer."
The agencies have construed this exemption narrowly, taking the view it does not apply where the terms of the parties' agreement, conduct by the acquirer, or any other evidence is inconsistent with a passive intent. Moreover, the agencies have taken the position that the investor's or target's ownership of a competing company obviates the ability to claim the exemption.
While the investment-only exemption will be applicable for some sponsors, the agencies may pursue substantial monetary fines for failing to make a required HSR Act filing. Thus, sponsors contemplating the investment-only exemption should work closely with outside antitrust counsel to understand its availability. In appropriate situations, counsel can review the sponsor's documents discussing the rationale for the partial investment to determine whether they are consistent with a passive intent based on agency guidance and precedent. Counsel also can review the ordinary course strategic documents created by any investor affiliate that arguably may offer products or services in geographic markets that compete with the target.
The Agencies' Analysis of Partial Acquisitions Under Section 7
Irrespective of whether an HSR filing is required, the agencies may investigate a partial investment under Section 7 to determine whether it may substantially lessen competition. Under the horizontal merger guidelines, the FTC or the DOJ may consider whether a partial acquisition of a competitor would harm competition by:
- Enabling the acquirer to control or influence the competitive conduct of the target;
- Reducing the acquirer's incentive to compete independently; and/or
- Providing the acquirer access to the target's competitively sensitive information, which may lead to coordinated behavior or unilateral accommodating conduct.
The agencies' questions in a partial acquisition investigation often parallel those in control acquisitions. The analysis of market definition and concentration is no different, and the theories of unilateral and coordinated harm described in the guidelines can apply equally to partial acquisitions. However, in partial acquisitions the agencies conduct a detailed, fact-specific analysis into the investor's ability to control or influence the target, or to access to competitively sensitive information.
In addition, a key focus for the agencies in partial acquisition cases is whether, and the extent to which, the transaction gives the acquirer a diminished incentive to compete. That fundamentally differs from control acquisitions, where the inquiry into post-acquisition control, information flow, and changes in independent incentives is inapposite.
Compared to an acquisition of control, it is more challenging for the agencies to prove a partial acquisition may substantially lessen competition. A control acquisition removes an independent decision maker from the competitive landscape, "completely and permanently eliminating competition between" the merging parties. The U.S. Supreme Court has held a transaction is presumed anti-competitive in litigation if it creates a firm with an "undue market share" causing a "significant increase" in market concentration, the "structural presumption."
In contrast, no structural presumption applies to a partial acquisition because there is no combination of independent decision makers or change in the structure of the market — only a potential change in competitive incentives. With no presumption, the agencies must offer direct proof of competitive harm to meet their ultimate burden of persuasion in a partial acquisition case, an onerous task given the inherently predictive nature of antitrust merger review.
For that reason, and the expense and distraction of a court proceeding relative to the financial upside of a partial stake, disputes between the agencies and parties regarding partial acquisitions often are resolved without litigation. That said, in 2003 the DOJ sued to block the acquisition of a 50% stake in a business that competed directly with the acquirer's existing 50% holding. There, an appellate court held that even after the acquirer gave up its voting interests in the target, a genuine factual issue existed as to whether the acquirer could still control the target. The acquirer subsequently divested its interest in the target.
How Investors Have Resolved Agency Concerns in Prior Partial Acquisition Cases Under Section 7
Where the agencies have raised concerns about the potential competitive effects of a partial acquisition in prior matters, investing parties generally have taken one of two approaches.
Under the first approach, the investor has retained its financial ownership stake in the acquired entity and its existing competitive holding, but elected to (1) relinquish control and influence over one of the holdings, including board seats, veto and governance rights, and (2) implement firewalls and other safeguards to prevent the exchange of competitively sensitive information. In some instances, investors also have agreed to remedies such as a commitment not to solicit proxies, to reduce the stake in the target to a capped amount (with a standstill restricting future purchases), or to act as the target's fiduciary or creditor.
The theory behind this "behavioral" approach, consistent with the language of Section 7 itself, is that making the investment purely passive removes or significantly reduces the threat of competitive harm. Indeed, to prove the acquisition of a passive economic interest may substantially lessen competition would be groundbreaking for the agencies. Research reveals no case since the inception of the Clayton Act where a court has taken such a position.
In other cases, the investor either has unwound the partial investment (including its financial stake) or divested its existing competitive holding. Occasionally, investors have agreed to divest a portion of the partial stake and certain behavioral commitments. In matters involving a complete or partial divestiture, the agencies have asserted that, even with behavioral commitments, the acquirer's retention of a financial stake alone would create an incentive for the acquirer to compete less vigorously. In particular, the agencies have claimed the acquirer would be able to recoup lost profits from sales diverted to its partial investment, justifying a post-investment price increase.
In addition, divestitures generally have occurred where the agencies have alleged a highly concentrated market conducive to coordinated conduct. In prior matters requiring divestitures, the agencies have alleged one of the following dynamics is present:
- The acquirer and the target are particularly close competitors, such that the acquirer loses a considerably higher percentage of sales to the target than others;
- The target has imminent plans to introduce a new product that competes head-to-head with the acquirer's product; and/or
- The acquirer and target have a material vertical relationship, such that the partial acquisition presents a risk of customer or input foreclosure.
The agencies and courts have not applied either approach in a consistent, uniform manner or stated a clear policy as to when divestitures should be required in partial acquisitions (or whether the divestiture should be partial or complete). In fact, in one case, an FTC consent order provided the acquirer an option either to divest its partial interest or accept a capped nonvoting interest (along with several behavioral commitments).
In today's climate, sponsors may find the agencies reluctant to agree to behavioral commitments in connection with a PIPE or any other partial acquisition. In 2018, the DOJ withdrew its 2011 policy guide to merger remedies, which embraced behavioral remedies, and reinstated its 2004 policy guide, which states divestitures are preferable to behavioral remedies "because they are relatively clean and certain, and generally avoid costly government entanglement in the market."
Like the DOJ, the FTC publicly has stated its preference for structural remedies but may implement behavioral remedies in appropriate cases. Recent consent orders requiring nonstructural relief have been highly contested at the commission.
There may be strong case-specific arguments for why unwinding a competing investment or divesting an existing competitive holding exceeds what is necessary to preserve competition in the context of a particular partial acquisition. But in light of the agencies' approach in past enforcement actions and certain regulators' attitudes toward private equity investment activity and behavioral remedies, parties should be aware the agencies may decide to seek some sort of remedy, if not a divestiture.
Investors seeking to mitigate potential Section 7 risk may, to the extent advisable, implement firewalls and establish compliance protocols (including training) to safeguard and restrict the flow of competitively sensitive information. If such an approach is taken, agency precedent provides valuable guidance. In addition, in certain cases, investors may choose to retain an expert economist under the guidance of antitrust counsel to demonstrate the acquisition does not change either party's incentives to compete.
After Closing a Partial Acquisition, Parties Remain Subject to Section 8 of the Clayton Act and Section 1 of the Sherman Act
PIPE acquisitions often include board seats that can trigger Section 8 or "interlocking directorate" questions. Section 8 prohibits a "person" from sitting on the board (or serving as an officer elected or appointed by the board) of competing corporations.
Section 8 is a per se statute, meaning there is no defense for a violation. However, exemptions are available for competitors with low combined sales or de minimis competitive sales; the monetary thresholds applicable to these exemptions change annually, tracking changes in GNP.
Enforcement actions under Section 8 are rare because violations are curable by removing the offending interlock within a year of the offending act. There is also a one-year grace period to remove an interlock that rises to a Section 8 violation due to changes in the economic circumstances of the competing corporations (e.g., where competitive sales increase such that a de minimis exemption that was available no longer applies).
That said, Section 8 enforcement is by no means dormant. The DOJ recently stated its view that Section 8 should apply to entities other than corporations, suggesting it might pursue cases in such contexts, although the plain language of the statute could make that challenging. In addition, a recent FTC blog post stated, "[p]rivate equity firms that acquire board seats across a diverse portfolio of companies may be particularly likely to encounter Section 8 issues via a merger or acquisition."
A Section 8 investigation also can raise questions under Section 1. In a control acquisition, the acquirer and target combine to form a single legal entity. By contrast, partial acquisitions generally do not give the acquirer control over (or the ability to control) the target. Absent economic or actual control, parties to a partial acquisition do not become a single legal entity, but rather remain independent of each other and therefore capable of entering into an agreement. Thus, a partial investment in a competing firm could implicate Section 1, violations of which can carry treble damages.
Unlike Section 8, Section 1 requires proof of an actual conspiracy. In the course of a Section 8 investigation, however, the agencies may examine whether the interlocked director or officer served as a conduit for the exchange of competitively sensitive information that could have led to coordinated conduct.
The same steps used to mitigate risk under Section 7 also can be effective in the context of Section 8 and Section 1. The FTC has encouraged parties availing themselves of a de minimis exemption to monitor compliance with Section 8 thresholds by determining whether the competitive sales or the jurisdictional thresholds continue to apply. To the extent a sponsor relies on a Section 8 exemption, compliance checks can be set up on a periodic basis (e.g., annually). In addition, sponsors can implement firewalls and protocols for antitrust compliance. Having well-documented procedures in place can be compelling evidence that compliance is a priority.
Peter McCormack and Laura Sullivan are partners at Kirkland & Ellis LLP.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
 See, e.g., Corrie Driebusch, Wall Street Journal, Cash-Hungry Companies Reach for Lifeline in Convertible Bonds (Apr. 30, 2020), available at https://www.wsj.com/articles/cash-hungry-companies-reach-for-lifeline-in-convertible-bonds-11588239003?mod=searchresults&page=1&pos=19.
 See, e.g., Bill Meagher, The Deal, Uncertainty Clears Path for Large PIPEs (June 1, 2020), available at https://pipeline.thedeal.com/article/20006056/index.dl. ("The PIPEs market, primarily a capital source for small and microcap companies, has seen an influx of large-cap interest from high-profile investors as Covid-19 stretches balance sheets."); William Louch and Preeti Singh, Wall Street Journal, Private Equity Firms Offer Cash Lifelines to Public Companies (Apr. 30, 2020), available at https://www.wsj.com/articles/private-equity-firms-offer-cash-lifelines-to-public-companies-11587121203.
 See Daniel Wolf et al., Kirkland & Ellis LLP, Harvard Law School Forum on Corporate Governance, Filling the Sponsor Pipeline (Apr. 5, 2020), available at https://corpgov.law.harvard.edu/2020/04/05/filling-the-sponsor-pipe-line/ (republishing March 2020 KirklandPEN article available at https://www.kirkland.com/publications/kirklandpen/2020/03/filling-the-sponsor-pipeline).
 Section 7 of the Clayton Act bars firms from acquiring "any part of the stock" or assets of another company where "the effect of such acquisition may be substantially to lessen competition." 15 U.S.C. § 18 (1996). The Supreme Court has held a acquisition of less than a control interest may violate the Clayton Act. See Denver & Rio Grande W. R.R. v. United States , 387 U.S. 485, 501 (1967). Moreover, under the DOJ's and FTC's Horizontal Merger Guidelines, a partial acquisition in certain situations "may present significant competitive concerns." See Dep't of Justice & Fed. Trade Comm'n, Horizontal Merger Guidelines § 13 (2010), available at https://www.justice.gov/sites/default/files/atr/legacy/2010/08/19/hmg-2010.pdf [hereinafter Merger Guidelines]. See also Fed. Trade Comm'n & Dep't of Justice, Antitrust Guidelines for Collaborations among Competitors § 3.34 (2000) (listing factors relevant to the ability and incentive of the participants and the collaboration to compete in connection with the agencies' rule-of-reason analysis of competitor collaborations).
Depending on the ownership stake, governance rights and other considerations relating to the structure of the investment, as well as the countries in which the target has assets or derives revenues, merger control laws outside the U.S. also may apply. This article focuses on the relevant merger laws in the U.S.
 See, e.g., Press Release, Elizabeth Warren, Warren, Ocasio-Cortez to Introduce Pandemic Anti-Monopoly Act: Merger Moratorium One Pager (Apr. 28, 2020), available at https://www.warren.senate.gov/imo/media/doc/Merger%20Moratorium%20One%20Pager.pdf (proposing moratorium on transactions involving, inter alia, "private equity companies, hedge funds, or companies that are majority-owned by a private equity company or hedge fund"); Pallavi Guniganti, Global Competition Review FTC Commissioner hits out at private equity (Sept. 28, 2018), https://globalcompetitionreview.com/article/usa/1174735/ftc-commissioner-hits-out-at-private-equity.
 See Press Release, Mergermarket, Mergermarket releases 1Q20 M&A report (Apr. 2, 2020), available at https://www.mergermarket.com/info/mergermarket-releases-1q20-ma-report ("M&A activity is down 39.1% by value" in the first quarter of 2020 compared to the first quarter of 2019).
 In addition to Section 7 of the Clayton Act, the relevant statutes include the HSR Act, 15 U.S.C. § 18a (2000), Section 8 of the Clayton Act, 15 U.S.C. § 19 (1993), and Section 1 of the Sherman Act 15 U.S.C. § 1 (2004).
 Fed. Trade Comm'n, Hart-Scott-Rodino Premerger Notification Program, Introductory Guide II: To File Or Not to File (2008), available at https://www.ftc.gov/sites/default/files/attachments/premerger-introductory-guides/guide2.pdf.
 Press Release, Kirkland Alert, Revised Hart-Scott-Rodino Act Thresholds & Civil Penalty Amounts Announced (Jan. 30, 2020), available at https://www.kirkland.com/publications/kirkland-alert/2020/01/2020-hsr-revised-thresholds-announced.
 Competition Matters Blog, Fed. Trade Comm'n, HSR threshold adjustments and reportability for 2020 (Jan. 31, 2020), available at https://www.ftc.gov/news-events/blogs/competition-matters/2020/01/hsr-threshold-adjustments-reportability-2020.
 See 15 U.S.C. §18a(c)(9) (2000).
 See 16 CFR 801.1(i)(1) (2018) ("If a person holds stock 'solely for the purpose of investment' and thereafter decides to influence or participate in management of the issuer of that stock, the stock is no longer held 'solely for the purpose of investment.'"). The exemption parallels the language of Section 7 of the Clayton Act, discussed below, which provides "[t]his section shall not apply to persons purchasing . . . stock solely for investment and not using the same by voting or otherwise to bring about, or in attempting to bring about, the substantial lessening of competition."
 Competition Matters Blog, Fed. Trade Comm'n, "Investment Only" means just that (Aug. 24, 2015), available at https://www.ftc.gov/news-events/blogs/competition-matters/2015/08/investment-only-means-just. Examples of non-passive conduct include nominating a board candidate or holding a board or officer position, soliciting proxies, intending to take a controlling position (such as where an applicable investment mandate requires the eventual acquisition of control) or proposing action that requires shareholder approval.
 See 15 U.S.C. §18a(g)(1) (2000) ("Any person, or any officer, director, or partner thereof, who fails to comply with any provision of this section shall be liable to the United States for a civil penalty of not more than $10,000 for each day during which such person is in violation of this section."). This amount is adjusted annually based on GNP, and as of January 2020, the maximum civil penalty has increased to $43,280 per day. See Adjustments to Civil Penalty Amounts, 85 Fed. Reg. 2014 (Fed. Trade Comm'n Jan. 24, 2020), available at https://www.govinfo.gov/content/pkg/FR-2020-01-14/pdf/2020-00314.pdf.
 15 U.S.C. § 18 (2000).
 Merger Guidelines, supra note 4, § 13.
 United States v. Philadelphia Nat'l Bank , 374 U.S. 321 (1963); see also Fed. Trade Comm'n v. RAG-Stiftung , No. 1:19-cv-02337-TJK (D.D.C. Feb. 3, 2020), available at https://ecf.dcd.uscourts.gov/cgibin/show_public_doc?2019cv2337-150.
 Cf. United States v. AT&T, Inc. , 310 F. Supp. 3d 161, 192 (D.D.C. 2018), aff'd No. 1:17-cv-02511, 2019 WL921544 (D.C. Cir. Feb. 26, 2019) (structural presumption not applicable to purely vertical transactions).
 See United States v. Baker Hughes, Inc. , 908 F.2d 981 (D.C. Cir. 1990) (describing standard for burden shifting in Section 7 cases).
 See United States v. Dairy Farmers of Am. , 426 F.3d 850 (6th Cir. 2005). The decision focused on control, as opposed to competitive incentives or information exchange.
 Press Release, Dep't of Justice, Justice Department Obtains Dairy Processor Divestiture in Settlement with Dairy Farmers of America (Oct. 2, 2006), available at https://www.justice.gov/archive/atr/public/press_releases/2006/218836.pdf.
 A recent FTC blog post summarizes some of the cases involving each approach. See Competition Matters Blog, Fed. Trade Comm'n, What's the interest in partial interests? (May 9, 2016), available at https://www.ftc.gov/news-events/blogs/competition-matters/2016/05/whats-interest-partial-interests [hereinafter FTC Blog Post, What's the interest?].
 See, e.g., Analysis of Agreement Containing Consent Orders to Aid Public Comment, Boston Scientific Corp., 71 Fed. Reg. 24,714 (Fed. Trade Comm'n Apr. 26, 2006), available at https://www.govinfo.gov/content/pkg/FR-2006-04-26/pdf/E6-6226.pdf; Analysis to Aid Public Comment, Conoco, Inc. (Fed. Trade Comm'n Sept. 9, 2003), available at https://www.govinfo.gov/content/pkg/FR-2002-09-09/pdf/02-22795.pdf.
 See, e.g., Proposed Final Judgment and Competitive Impact Statement, United States v. Univision Commcn's , 68 Fed. Reg. 27,851 (Dep't of Justice May 21, 2003), available at https://www.govinfo.gov/content/pkg/FR-2003-05-21/pdf/03-12746.pdf; Analysis to Aid Public Comment, Medtronic Inc., 63 Fed. Reg. 53,919 (Fed. Trade Comm'n Oct. 7, 1998), available at https://www.govinfo.gov/content/pkg/FR-1998-10-07/pdf/98-26855.pdf; Proposed Consent Agreement with Analysis to Aid Public Comment, Lockheed Martin Corp., 61 Fed. Reg. 18,732 (Fed. Trade Comm'n Apr. 29, 1996), available at https://www.govinfo.gov/content/pkg/FR-1996-04-29/pdf/96-10560.pdf; Proposed Final Judgment and Competitive Impact Statement, United States v. Gillette Co , 55 Fed. Reg. 12,567 (Dep't of Justice Apr. 4, 1990), available at https://www.govinfo.gov/content/pkg/FR-1990-04-04/pdf/FR-1990-04-04.pdf.
 See note 12, supra.
 See, e.g., Analysis to Aid Public Comment, Hikma Pharms. PLC, 81 Fed. Reg. 11,792 (Fed. Trade Comm'n Mar. 7, 2016), available at https://www.govinfo.gov/content/pkg/FR-2016-03-07/pdf/2016-04884.pdf; Analysis of Proposed Consent Orders to Aid Public Comment, Novartis, Inc., 80 Fed. Reg. 11,202 (Fed. Trade Comm'n Mar. 2, 2015), available at https://www.ftc.gov/system/files/documents/federal_register_notices/2015/03/150302novartisfrn.pdf.
 See Proposed Final Judgment and Competitive Impact Statement, United States v. Univision Commc'ns Inc., 68 Fed. Reg. 27,852 (Dep't of Justice May 21, 2003), available at https://www.govinfo.gov/content/pkg/FR-2003-05-21/pdf/03-12746.pdf (reducing the acquirer's stake from 30 percent to 10 percent "reduces substantially the likelihood that [the acquirer's] competitive incentives will be affected by its partial ownership of [the target], thus preserving [the acquirer's] incentive to compete with [the target].").
 See, e.g., FTC Blog Post, What's the interest, supra note 22. See also Proposed Final Judgment and Competitive Impact Statement, United States v. United Techs. Corp. , 77 Fed. Reg. 46,186 (Dep't of Justice Aug. 2, 2012), available at https://www.govinfo.gov/content/pkg/FR-2012-08-02/pdf/2012-18767.pdf; Press Release, Dep't of Justice, Justice Department Requires Deutsche Börse to Divest Its Interest in Direct Edge in Order to Merge with NYSE Euronext (Dec. 22, 2011), available at https://www.justice.gov/opa/pr/justice-department-requires-deutsche-b-rse-divest-its-interest-direct-edge-order-merge-nyse.
 See, e.g., FTC Blog Post, What's the interest, supra note 22
 Proposed Consent Agreement with Analysis to Aid Public Comment, Time Warner, Inc., 61 Fed. Reg. 50,301 (FTC Sept. 25, 1996), available at https://www.govinfo.gov/content/pkg/FR-1996-09-25/pdf/96-24599.pdf.
 See Remarks, Makan Delrahim, Ass't Attorney Gen., Dep't of Justice, It Takes Two: Modernizing the Merger Review Process, Remarks at the 2018 Global Antitrust Enforcement Symposium (Sept. 25, 2018), available at www.justice.gov/opa/speech/assistant-attorney-general-makan-delrahim-delivers-remarks-2018-global-antitrust.
 Dep't of Justice, Antitrust Division Policy Guide to Merger Remedies 7 (2004), available at www.justice.gov/sites/default/files/atr/legacy/2011/06/16/205108.pdf (the DOJ 2004 Remedy Guide).
 See Speech, Makan Delrahim, Ass't Attorney Gen., Dep't of Justice, Antitrust and Deregulation, Keynote Address at American Bar Association's Antitrust Fall Forum (Nov. 16, 2017), available at www.justice.gov/opa/speech/assistant-attorney-general-makan-delrahim-delivers-keynote-address-american-bar ("Our goal in remedying unlawful transactions should be to let the competitive process play out. Unfortunately, behavioral remedies often fail to do that. Instead of protecting the competition that might be lost in an unlawful merger, a behavioral remedy supplants competition with regulation; it replaces disaggregated decision making with central planning.").
 See, e.g., Remarks, D Bruce Hoffman, Acting Dir., Bureau of Competition, Fed. Trade Comm'n, Vertical Merger Enforcement at the FTC (Jan. 18, 2018), available at www.ftc.gov/system/files/documents/public_statements/1304213/hoffman_vertical_merger_speech_final.pdf. ("First and foremost, it's important to remember that the FTC prefers structural remedies to structural problems, even with vertical mergers. . . . But in some cases we believe that a behavioral or conduct remedy can prevent competitive harm while allowing the benefits of integration.").
 See, e.g., Statement of Chairman Simons, Commissioner Phillips and Commissioner Wilson. Staples, Inc., FTC File No. 181-0180 (Jan. 29, 2019), at 5 ("And, we agree that . . . structural remedies are usually preferred but not always essential. The decision in this case embodies that view."). Statement of Bureau of Competition, Northrup Grumman Corp., FTC File No. 181-0005 (June 5, 2018) at 2 ("The Bureau of Competition typically disfavors behavioral remedies and will accept them only in rare cases based on special characteristics of an industry or particular transaction. This settlement does not depart from that policy.").
 In particular, if a merger between the two parties would be expected to raise concerns, the agencies may decide to take an aggressive enforcement stance, using all available enforcement tools. See, e.g., Remarks, Ian Conner, Dir. Bureau of Competition, Fed. Trade Comm'n, Fixer-Upper: Using the FTC's Remedial Toolbox to Restore Competition (Feb. 8, 2020), available at https://www.ftc.gov/system/files/documents/public_statements/1565915/conner_gcr_live_conduct_remedies_2-8-20.pdf.
 15 U.S.C. § 19 (1993). Courts have held that a "person" includes two agents (such as employees) acting at the direction of that firm. See, e.g., Square D Co. v. Schneider S.A. , 760 F. Supp. 362, 366-67 (S.D.N.Y. 1991). Each of the agencies has agreed with this view. Thus, a sponsor appointing two different individuals to serve on the boards of two independent competitors may not be immune from Section 8 scrutiny. In the private equity context, an interlock may arise even where a minority stake is acquired by a different fund from the one that holds the competing investment. The analysis depends on whether the same sponsor general partner controls each fund.
 See Competition Matters Blog, Fed. Trade Comm'n, Have a plan to comply with the bar on horizontal interlocks (Jan 23, 2017), available at https://www.ftc.gov/news-events/blogs/competition-matters/2017/01/have-plan-comply-bar-horizontal-interlocks [hereinafter FTC Blog Post, Have a plan].
 Revised Jurisdictional Thresholds for Section 8 of the Clayton Act, 85 Fed. Reg. 3,381 (Fed. Trade Comm'n Jan. 21, 2020), available at https://www.govinfo.gov/content/pkg/FR-2020-01-21/pdf/2020-00784.pdf.
 See FTC Blog Post, Have a plan, supra note 40.
 Speech, Makan Delrahim, Ass't Attorney Gen., Dep't of Justice, Assistant Attorney General Makan Delrahim Delivers Remarks at Fordham University School of Law (May 1, 2019), available at https://www.justice.gov/opa/speech/assistant-attorney-general-makan-delrahim-delivers-remarks-fordham-university-school-law.
 See Competition Matters Blog, Fed. Trade Comm'n, Interlocking mindfulness (June 26, 2019), available at https://www.ftc.gov/news-events/blogs/competition-matters/2019/06/interlocking-mindfulness?utm_source=govdelivery.
 See Copperweld Corp. v. Independence Tube Corp. , 467 U.S. 752 (1984).
 See FTC Blog Post, Have a plan, supra note 40.
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