Let Sleeping Dogs…
I feel no great urgency to revise the Guidelines. True enough, they’re more of an analytical thought experiment than an accurate description of how merger review takes place in the agencies, but who’s really fooled? Perhaps some business people think that the Guidelines are a computer program waiting for the introduction of the relevant data to spit out the answer, but most sophisticated executives contemplating a merger will understand that the Guidelines are just a beginning point for conversation.
Could the beginning point be clearer or conform more closely to agency practice? Sure, but that doesn’t mean that revision of the Guidelines is justified. With hindsight, the First Amendment could be a little better worded, but no one wants to tinker with it now–who knows what would result? I’m sufficiently satisfied with current merger practice in the agencies that I don’t care that much what’s in the Guidelines and I am worried about the unpredictable results that could obtain if we started tinkering. Let sleeping dogs . . .
But if we are going to revise, then my pet issue is the asymmetrical treatment of the probabilities on anticompetitive effects and offsetting efficiencies–a point on which Joe Simons and I are planning a fuller analysis. The Guidelines seem to suggest that if the probability of anticompetitive effects of magnitude 100 is 50% and the probability of offsetting efficiencies of magnitude 100 is 50%, then the merger should be challenged, since a greater quantum of proof is required for efficiencies than for anticompetitive effects. This makes no sense to me–everything else being equal, efficiencies that would be passed on to consumers and market power increases should be given equal weight and not assigned separate probability standards.