The FTC’s ‘Settlement First’ Strategy is a Failure

October 8, 2021 Press Release

Washington, D.C. – The American Economic Liberties Project released the following statement in response to a statement from FTC Commissioner Rohit Chopra that identifies serious flaws in the FTC’s 2017 Study on Merger Remedies.

“As Commissioner Chopra makes clear, the FTC’s ‘settlement first’ strategy is a failure,” said Sarah Miller, Executive Director of the American Economic Liberties Project. “In 2017, the FTC acknowledged that roughly 20 to 25 percent of the divestitures it ordered failed to achieve an independently viable competitive business. Thanks to Commissioner Chopra we now know the reality is even worse.”

“The truth is divestitures do not prevent anticompetitive harms,” added Miller. “For too long, FTC Commissioners have positioned themselves as dealmakers, aiding merging parties rather than enforcing the law. The FTC must now turn the page and end the use of settlements and divestments for merger transactions by blocking mergers in concentrated industries outright.”

For more information, including a close analysis of several of the FTC’s recently-failed settlements, see “Courage to Learn: A Retrospective on Antitrust and Competition Policy During the Obama Administration and Framework for a New Structuralist Approach.”

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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.