The Changing Role of Structural Presumption at the Federal Trade Commission
The draft merger guidelines that were released July 19 by the Federal Trade Commission (FTC) and U.S. Justice Department (DOJ) indicate a shift by the agencies toward an overreliance on structural market factors to trigger merger scrutiny.
For example, Draft Guideline 1—titled “Mergers Should Not Significantly Increase Concentration in Highly Concentrated Markets”—would lower the bar for what constitutes a “highly concentrated” market on the Herfindahl-Hirschman Index (HHI). Evaluating mergers through this structural lens assumes both that concentration is present or escalating in the economy at large and that concentration always and only leads to harmful anticompetitive effects. Most detrimentally, it likely precludes the more nuanced assessment of a given merger’s impact on competition that the FTC had used over the preceding four decades. This shift will increase Type I errors in antitrust enforcement and rob or delay the benefits of competition-enhancing mergers to consumers.