Tuesday, January 23, 2024

This Article reviews two recent joint statements by the DOJ and FTC. The first was their request for information on their proposals to “strengthen” the antitrust laws on mergers. The second was the July 2023 release of new draft guidelines which were subject to many comments, often critical of the new regime. The difficulties with both documents start with the initial premise of their inquiries, which falsely posit that any “improvement” of the antitrust laws requires imposing new sanctions on private activities—when in many cases a relaxation of current restrictions may be best. But both agencies write as if the efficiencies inherent in many mergers are largely illusory. Consequently, they understate the social losses that come from blocking or modifying mergers under the Clayton Act. In addition, they underestimate the efficiencies of vertical mergers and overstate the risks of downstream foreclosure, as exemplified by the FTC’s unwise attack on the Ilumina-Grail merger. Both documents also overstate the risk of monopoly power in labor markets, which bear little to no relationship to product markets. In light of their recent judicial defeats, both agencies should rethink their premature departure from traditional antitrust policies and redraft the proposed 2023 Guidelines from scratch.

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