ANNOUNCEMENT: Updated Merger Enforcement Guidelines from FTC & DOJ Usher in New Era of Hostility Toward Merger Activity

PORTLAND, Ore. (July 19, 2023)—Updated merger enforcement guidelines from the Federal Trade Commission (FTC) and U.S. Justice Department (DOJ) released today signal an attempt to discourage all mergers, not just anticompetitive mergers, according to scholars of the International Center for Law & Economics.

ICLE President Geoffrey Manne observes, “the overbroad guidelines are clearly designed to deter merger activity as a whole, regardless of the risk posed to competition. In so doing, the FTC and DOJ have reduced the utility of the guidelines to courts and frustrated the very coordination benefits that guidelines have historically sought to create.”

Chief Economist Brian Albrecht notes, “the FTC and DOJ cannot simply declare the existence of new antitrust law since courts are the ultimate arbiters of merger disputes. Small and medium sized firms without the benefit of costly specialist attorneys stand to suffer most directly as a result of the disruption caused by these new guidelines.”

Among the most troubling substantive developments presented by the new guidelines are:

  • On merger types: the conflation of vertical and horizontal mergers, ignoring the time-honored and judicially endorsed distinction between the two.
  • On potential competition: the treatment of any acquisition of a “potential rival” as part of a broader foreclosure strategy, thereby ignoring the reality that acquisition is often a more realistic approach to exit than an IPO.
  • On labor markets: the creation of a false symmetry between product markets and labor markets. The guidelines fail to appreciate that, while products are static, people are not.
  • On multi-sided platforms: the guidelines err on the side of protecting competitors over consumers by assuming all acquisitions are undertaken to lessen competition.

Previous ICLE commentary concerning the FTC and DOJ merger enforcement reform is available here and here.

President Geoffrey Manne and Chief Economist Brian Albrecht are available all week to discuss the far reaching implications of the new guidance.

To schedule an interview, contact ICLE Media and Communications Manager Elizabeth Lincicome at [email protected] or 919-744-8087.