When two corporations begin discussing the possibility of merging, there are a great many details to work out on the financial, structural/organizational, and legal levels. Under California law, the filing requirements for mergers vary depending on a number of factors, including the type of merger, the number of corporations involved, and the domicile in which the corporations exist.

Added to these detail, for some corporations, is dealing with the oversight of the Fair Trade Commission. One of the main concerns of the FTC with mergers is the effect they will have on competition. Mergers which present potential issues under antitrust laws are scrutinized carefully to ensure consumers will not be adversely affected. 

A recent example of a proposed merger that presents potential competitive issues is the case of competing fantasy sports websites FanDuel and DraftKings. Both web companies offer what is known as daily fantasy sports competition, while most of the rest of the industry offers season-long competitions. According to a complaint filed by the FTC in response to the proposed merger, together the companies own over 90 percent of the market for fantasy sports.

The proposed merger of FanDuel and DraftKings represents a type of merger the FTC is most concerned about—horizontal mergers. These involve a merger between direct competitors. When direct competitors together take up a large share of the market, merging can lead to higher prices, lower quality products and services, less innovation, and other problems with competition.

In future posts, we’ll look briefly at the merger review process and some of the issues the FTC investigates in the process, and the importance of experienced legal counsel in navigating the process.


 California Secretary of State, Corporate Mergers, January 2016.

Federal Trade Commission, Guide to Antitrust Laws: Mergers, Accessed June 27, 2017.