ILSR Submits Comments to Strengthen Proposed Merger Guidelines

Date: 19 Sep 2023 | posted in: Retail | 0 Facebooktwitterredditmail

The Federal Trade Commission (FTC) and Department of Justice’s (DOJ) efforts to update the merger guidelines marked a dramatic shift from business as usual for the agencies tasked with curbing corporate concentration in our economy. The proposed guidelines released in July 2023 were a significant and important improvement over the current, 2010 edition of the guidelines.

Download the Comment Letter

In response to the proposal, Stacy Mitchell and Ron Knox submitted a comment letter on behalf of ILSR supporting the significant and necessary changes contained in the agencies’ Draft Merger Guidelines and suggesting ways the agencies should amend their draft guidelines to better discern and block harmful mergers, promote a decentralized economy, safeguard American liberty, and fulfill the aims of the antitrust laws enacted by Congress.

To strengthen the proposal, the letter encourages the agencies to:

  • Lower the Structural Thresholds for All Types of Mergers. The draft thresholds are too high to meet the directives of the Clayton Act. ILSR urges the agencies to lower the presumptive threshold for both horizontal and vertical mergers to 20 percent, and return to the four-firm concentration ratios as described in the 1968 merger guidelines.
  • Eliminate the Efficiencies Defenses. ILSR urges the agencies to eliminate the efficiencies defenses. Congress deliberately chose to protect and promote competition as the best means of achieving the broad aims of antitrust policy, including safeguarding the interests of consumers — rather than sacrifice competition in pursuit of potential efficiencies. Not only does the efficiencies defense run counter to the law, but including it opens the way for a continuation of the failed enforcement approach of recent decades.
  • Provide Stronger Support for the Use of Practical Indicators in Defining Markets and Limit or Remove the Hypothetical Monopolist Test. We commend the agencies for moving away from reliance on the hypothetical monopolist test and including in the draft guidelines a better set of tools for defining markets, including direct evidence and observable market characteristics. However, we encourage the agencies to strongly consider removing the hypothetical monopolist test altogether and strengthening their support for and guidance on using practical measures.

Below are additional resources on merger policy and why new merger standards are key to halting concentration and reviving local economies:

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Follow Katy Milani:
Katy Milani

Katy Milani is the Senior Policy Advocate for ILSR's Independent Business initiative.

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Follow Stacy Mitchell:
Stacy Mitchell

Stacy Mitchell is co-director of the Institute for Local Self-Reliance and directs its Independent Business Initiative, which produces research and designs policy to counter concentrated corporate power and strengthen local economies.

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Follow Ron Knox:
Ron Knox

Ron Knox is the Senior Researcher and Writer for ILSR's Independent Business Initiative.