FTC, DOJ Seek Comments to Strengthen Enforcement of Illegal Mergers
Graeme Sloan, Sipa
The Federal Trade Commission (FTC) and Department of Justice's (DOJ) antitrust division announced a joint review of antitrust guidelines with the intention of rewriting business regulations, indicating a tougher stance against substantial mergers. The agencies are holding a public comment period of 60 days.
“Illegal mergers can inflict a host of harms, from higher prices and lower wages to diminished opportunity, reduced innovation, and less resiliency,” stated FTC Chair Lina M. Khan. “This inquiry is designed to ensure that our merger guidelines accurately reflect modern market realities and equip us to forcefully enforce the law against unlawful deals."
An increasing number of merger applications were filed between 2020 and 2021 with some outlets reporting the increase in large deals has fueled greater scrutiny from the FTC and DOJ. For example, Microsoft's $68.7 billion purchase of video game developer Activision is an acquisition that may warrant closer scrutiny, according to commentary.
In the request for comments, an entire section is dedicated to digital markets. The agencies ask whether guidelines should differ by market, should regulations address how specialized data can provide market advantages, and how enforcement agencies can evaluate two-sided markets, including platforms that serve both consumers and advertisers.
During the Trump administration, the two agencies in charge of antitrust enforcement spent 18 months reviewing their joint guidance on vertical mergers. Last fall, the FTC voted on party lines to withdraw its guidelines.
In recent years, antitrust scholars have argued that digital markets require a different enforcement approach than traditional markets, since these companies can use data to monopolize consumers' power, even if prices are low or free to consumers.
“We have lived through changes in our economy on a level that rivals the industrial revolution. The digital transformation has revolutionized not just the goods and services we buy, but the nature of industry. Companies today cooperate, compete, invest, and invent in profoundly different ways than they did twenty years ago,” said Assistant Attorney General for the Antitrust Division Jonathan Kanter, “Justice therefore demands that we ensure our approach to analyzing mergers is not one-dimensional or two-dimensional, but captures the rich complexity of the modern economy.”