Antitrust Enforcement Takes a Regressive TurnRachel Chiu
Aug 07, 2023
Regulators have revised the rules for merger evaluation to fit their antiquated view of antitrust enforcement.
The Federal Trade Commission (FTC) and the Department of Justice (DOJ) recently issued the much-anticipated draft merger guidelines. The merger guidelines, which are intended to help businesses and courts understand when a proposed deal may raise antitrust concerns, demonstrate the Biden administration’s open hostility towards corporate dealmaking and represent a radical departure from previous iterations.
Since 1968, these guidelines have served as a touchstone for merger review. While not legally binding, the merger guidelines explain how the agencies will enforce antitrust laws. The draft version, if implemented, will replace the 2010 Horizontal Merger Guidelines and the 2020 Vertical Merger Guidelines, the latter of which was rescinded and criticized by the FTC’s Democratic majority for allegedly being “flawed [in its] discussion of purported procompetitive benefits.”
The document is centered around thirteen individual guidelines, any one of which is sufficient for the DOJ and FTC to challenge a transaction. A particularly egregious and open-ended guideline states that “mergers should not further a trend toward concentration.” This statement does not point to economic harm, but rather gives regulators sufficient leeway to use speculation — as they did with Meta’s acquisition of Within and the Microsoft-Activision deal. The final guideline is a “catch-all,” providing the two agencies with the grounds to challenge any deal, even if it does not run afoul of the preceding twelve statements.
The DOJ and FTC are unequivocally trying to prevent mergers, lowering the bar for what is considered presumptively illegal. The guidelines redefine thresholds, classifying more markets as concentrated while also stating that a market share of over 30 percent presents a threat of undue concentration. The goal, according to economist Brian Albrecht, is to “stop more mergers of every kind without regard for economic argument or recent law.”
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Source:
https://townhall.com/columnists/rachelchiu/2023/08/07/mondsy-n2626698
