The Failing Firm Defense

With an influx of distressed companies as a result of the COVID-19 pandemic, the “failing firm” defense has been attracting increased attention as a way to let an otherwise anticompetitive merger to proceed. The failing firm defense is based on the theory that an anticompetitive merger is better than allowing the failing firm’s assets to exit the market altogether. Julie Elmer, antitrust expert at the global law firm Freshfields, discusses the elements and the high bar for proving the defense, a related defense called the “flailing firm” defense, and what companies should keep in mind as they prepare to employ either the failing or flailing firm defense.


Julie Elmer is a partner in the antitrust and litigation practices at Freshfields.

Additional Resources

More from Julie Elmer

Ohio v. American Express, a Shift in Antitrust  (a TOL Brief)

Can the Failing Firm Defense Save a Deal in the COVID Era?   (a Freshfields practice alert, October 12, 2020)