Geoff Manne, Brian Albrecht & Lazar Radic on FTC/DOJ Merger Guidelines

Reason – ICLE President Geoffrey Manne, Chief Economist Brian Albrecht, and Senior Scholar Lazar Radic were quoted by Reason in a story about new merger guidelines promulgated jointly by the U.S. Justice Department and the Federal Trade Commission. You can read full piece here.

“The overbroad guidelines are clearly designed to deter merger activity as a whole, regardless of the risk posed to competition,” said Geoffrey Manne, president of the International Center for Law & Economics (ICLE).

…”While there is a lot to digest in the 51 page document with over 100 (largely stale) footnotes, the broad picture is clear: the goal of this document is to stop more mergers. Period,” writes Brian Albrecht, ICLE chief economist, at the Truth on the Market blog. “To achieve that end, the guidelines have jettisoned the insights from economics that antitrust has learned over the past 60 years and moved back to a world where virtually all conduct is presumed to be anticompetitive.”

Lazar Radic, an adjunct law professor at IE Law School, notes that the draft guidelines also set up a world in which no platform operator “can simultaneously operate and participate on a platform.” (I.e., Amazon selling its own Amazon-brand products on the Amazon platform.)

This de-facto prohibits vertical integration in platforms of a certain size, destroying the incentive to build & develop those platforms, and forfeiting the massive consumer benefits that accrue from vertical integration,” he points out. “The combined effect of the new merger guidelines, the FTC’s crusade against ‘self-preferencing,’ and bills like [the American Innovation and Choice Online Act], would be no Amazon Basics, no FBA (and probably no Prime)—heck, probably no Marketplace bc Amazon might just decide to kick all third party sellers out. Why would the FTC, an agency tasked with protecting consumers and competition, want to do this? Bc under its neo-brandeisian leadership, the FTC has reframed that mission with the goal of undermining ‘bigness’- consequences and statutes be damned.”