The FTC used to give firms a year to divest. Why has the FTC reduced the divestiture period to six months?
It was taking too long for the divestitures to occur because respondents tended to wait until the end of the period, and there were examples of the assets deteriorating in the interim. Delay in implementation of a divestiture order increases the period in which competition in the relevant market may be affected because the acquiring company may have little incentive to maintain the assets (because they will be operated by a competitor in the future) or to operate them in a manner that maintains competition during the interim period. It may be more profitable, for example, for the acquiring firm to keep the acquired production capacity off the market. (These are some of the reasons that a “monitor” trustee is used; see Q.36.) Our experience confirms that firms can, with some rare exceptions, complete divestitures in less than six months.
