FTC-DOJ Merger Guidelines Aim to 'Restore Competition and Strengthen Democracy'

Antitrust campaigners and experts on Monday celebrated the Biden administration's new guidelines for mergers and acquisitions, which supporters say will "restore competition and strengthen democracy."

Farm Action co-founder and chief strategy officer Joe Maxwell commended the Federal Trade Commission (FTC) and U.S. Department of Justice (DOJ) "for delivering on their commitment to restore competition to our economy."

"For more than 40 years, the merger guidelines have been void of a review for competition," he said. "During this period of time, unprecedented concentration across U.S. markets has driven farmers and small businesses out of business."

"The new guidelines provide a roadmap to bring first principles of the antitrust laws into the 21st century."

Erik Peinert, research manager and editor at the American Economic Liberties Project, declared that "the finalized merger guidelines are a game-changer for antitrust enforcement, incorporating decades of new learnings and thousands of public comments from working families and small businesses."

"After almost 50 years of significant underenforcement, we're thrilled to see the antitrust agencies make a comprehensive update to the merger guidelines, and look forward to seeing them vigorously enforced," he continued. "The new guidelines provide a roadmap to bring first principles of the antitrust laws into the 21st century."

"Previous guidelines ignored or underappreciated the harms from practices like vertical mergers and serial acquisitions, as well as the harms to workers," he highlighted. "A generation of these deals has suppressed worker pay, increased prices, and embrittled our supply chains."

Open Markets Institute legal director Sandeep Vaheesan also praised the agencies behind the new guidelines, which he said "put fealty to law front and center again and seek to implement congressional intent, instead of their own ideological preferences."

"By relying on market share tests for deciding the legality of certain mergers, the new guidelines are more faithful to the Clayton Act than the 2010 horizontal merger guidelines were," Vaheesan explained. "They are also more in accord with empirical research on the effects of mergers and acquisitions, which finds that corporate consolidation can harm democratic balances and institutions, as well as workers, producers, and consumers."

"In our comments on the draft guidelines, we called on the DOJ and the FTC, in the final guidelines, to adopt lower market share tests to cover consolidations outside the most highly concentrated markets and to reject unequivocally an efficiencies defense for presumptively illegal mergers," he noted. "Although the agencies stuck with their original approach in the final document, these guidelines are a material improvement over the status quo and will help the two agencies do a better job of stopping and deterring harmful corporate consolidation going forward."

The guidelines released Monday reflect feedback the agencies received after putting out a draft in July.

FTC Chair Lina Khan expressed gratitude for "the thousands of comments submitted by American workers, consumers, entrepreneurs, farmers, business owners, and other members of the public," stressing that "this input directly informed the guidelines and allowed us to pursue this work with a deeper understanding of the real-life stakes of merger enforcement."

Attorney General Merrick Garland said in a statement that the guidelines "provide transparency" into Justice Department action and pledged that the DOJ "will continue to vigorously enforce the laws that safeguard competition and protect all Americans."