Antitrust Agencies Update Merger Guidelines to Reflect New Evidence & Market Realities

July 19, 2023 Press Release

Washington, D.C. — The American Economic Liberties Project today applauded the U.S. Department of Justice (DOJ) Assistant Attorney General for the Antitrust Division Jonathan Kanter’s and Federal Trade Commission (FTC) Chair Lina Khan’s joint release of new federal merger review guidelines.

“The antitrust agencies have issued an important update to merger enforcement to bring in all the new learning and evidence discovered by economists, business people, consumers, and scholars over the last fifteen years,” said Matt Stoller, Director of Research at the American Economic Liberties Project. “Older models of economics and antitrust enforcement have not captured key merger harms and legal violations, failing to see problems with a host of mega-mergers like Google-DoubleClick, Live Nation-Ticketmaster, CVS-Caremark-Aetna, and American-U.S. Airways. These mistakes have suppressed worker pay, embrittled our supply chains, and undermined industrial policy.”

“It’s long past time for an update,” added Stoller. “We encourage all Americans to contribute comments to the agencies to help them understand current market realities, how they are experiencing the economy, and how the antitrust laws should apply.”

Merger guidelines lay out the antitrust agencies’ approach and policy towards proposed mergers to reflect their interpretation of the law, indicate which mergers they see as lawful or illegal, and thereby help businesses plan with a predictable regulatory environment. They are more than mere articulation; courts often cite the agencies’ merger guidelines as persuasive authorities on what antitrust law says and what sorts of mergers are illegal.

The Federal Trade Commission voted to withdraw a previous version of Trump-era guidelines for “vertical” mergers in September 2021, which were radically permissivewith respect to vertical mergers like AT&T-Time Warner or CVS-Aetna. Those guidelines relied on unsound economic theories and were inconsistent with the Clayton Act, the main merger law in the Unites States that prohibits any merger or acquisition that “may” substantially lessen competition in any line of commerce or activity affecting commerce. By creating new merger guidelines to replace both the outdated 2010 guidelines and the already-withdrawn vertical guidelines, the FTC and DOJ are building on their efforts to restore the agencies’ ability to combat one of the main drivers of corporate consolidation: mergers & acquisitions.

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The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.