Yesterday, TechFreedom filed comments in response to the Federal Trade Commission (FTC) and Department of Justice’s (DOJ) request for comment on their proposed draft revised Merger Guidelines.
“These are not Merger Guidelines for the Digital Age. Significant consideration should be given to retaining the 2010 Horizontal Merger Guidelines and 2020 Vertical Merger Guidelines with only modest revisions,” said Bilal Sayyed, TechFreedom Senior Competition Counsel, former Director of the FTC’s Office of Policy Planning, and a 25-year veteran antitrust merger lawyer.
“Unlike previous iterations, the Draft Merger Guidelines exhibit a hostility towards a balanced competitive effects analysis of a merger,” said Sayyed. “They adopt dubious case law as controlling precedent, and accept, as credible, economic theories of harm based on market structure characteristics abandoned by economists decades ago.”
“Merger Guidelines should recognize that market power, not market structure, is the necessary predicate to alleging a merger is illegal,” Sayyed added. “The Draft Merger Guidelines instead adopt a principle of protecting market structure. Yet market structure simply isn’t a strong proxy for market power.”
“Merger Guidelines should recognize that vertical integration through merger is likely to be efficient or otherwise pro-competitive,” Sayyed advised. “The Merger Guidelines should be clear that vertical integration in the absence of market power is likely to be competitively beneficial, and that vertical integration, even when accompanied by market power, is not necessarily anticompetitive.”
“The Supreme Court has moved on from its hostility to efficiencies and economies in antitrust matters, and the Agencies should too,” Sayyed continued. “Merger Guidelines should not include a bias against efficiency claims, as this draft does and as recent merger case filings by the Agencies did.”
“Merger Guidelines should recognize additional rebuttal arguments as part of the competitive effects analysis of a merger, including allowing the parties to show that the relevant markets will operate as competitively post-merger as they did pre-merger,” Sayyed advised. “The failure to recognize this as a rebuttal argument makes clear Agency leadership intends to use merger policy to preserve market structures.”
“Merger Guidelines should not include the ‘wild-west, anything goes’ principle of draft Guideline 13,” Sayyed suggested. “If the Agencies cannot, at this time, articulate a competitive theory of harm, they should not include references to potential future speculative harm; they should explain such harms, to the public, and to the courts, when they identify them.”
“Two decades into the digital age, the Biden administration attempts to take us back to the merger policy of the 1960s and 1970s,” Sayyed concluded. “This approach will hurt American competitiveness, consumers, firms, labor, and shareholders. It is inexplicable.”
Find these comments and release on our website, and share them on Twitter, Bluesky, Mastodon, Facebook, and LinkedIn. We can be reached for comment at email@example.com. Read our related work, including:
- Our 2022 comments to the FTC on merger enforcement (Apr. 21, 2022)
- The Draft Merger Guidelines Abandon the Persuasiveness of their Predecessors, Promarket (Aug. 30, 2023)
- Failing Upward, City Journal (Aug. 17, 2023)
- Our comments to the FTC on the proposed ban of non-compete clauses (Apr. 20, 2023)
- Our statement on the Supreme Court’s ruling in FTC v. Axon (Apr. 14, 2023)
- Thumbing Their Noses, City Journal (Apr. 13, 2023)
- Our letter to the FTC requesting a reply comment period for the non-compete agreements NPRM (Mar. 23, 2023)
- Actual Potential Entrants, Emerging Competitors, and the Merger Guidelines, TechFreedom Paper (Dec. 20, 2023)
- National Petroleum Refiners v FTC: A Tale of Two Opinions, Truth on the Market (Apr. 27, 2022)
- No, Chevron Deference Will Not Save the FTC’s Noncompete Ban, Truth on the Market (Feb. 14, 2023)
- The Constitutional Revolution That Wasn’t: Why the FTC Isn’t a Second National Legislature, Concurrences (June 27, 2022)
- Our coalition letter recommending procedural steps for revisions to the merger guidelines (Mar. 24, 2022)
- The FTC’s New, and Thoroughly Mindless Approach to Mergers, RealClearMarkets (Mar. 9, 2022)
TechFreedom is a nonprofit, nonpartisan technology policy think tank. We work to chart a path forward for policymakers towards a bright future where technology enhances freedom, and freedom enhances technology.