Bloomberg Law - Biden Trustbusters Display Timidity in Proposed Merger Crackdown

Legal director Sandeep Vaheesan and chief economist Brian Callaci urge the DOJ and FTC to go further in limiting corporate mergers for the American economy’s benefit.

The Department of Justice and Federal Trade Commission recently announced a major shift in thinking on corporate mergers. The permissive approach that has prevailed since the early 1980s will be replaced with a much more vigorous anti-merger program going forward.

The agencies stated that a merger between two rivals in which the firms have a combined market share of greater than 30% would likely invite a legal challenge. Corporations will find mergers harder to complete under the draft merger guidelines. This is a welcome change.

Yet, the agencies’ proposed revisions don’t go far enough. In their final guidelines, the DOJ and the FTC should announce stricter market-share tests—think 15% instead of 30%—and put the largest corporations on notice that their mergers and acquisitions won’t be tolerated.

Although Congress enacted a strong anti-merger law and feared the concentration of economic and political power through consolidation, the federal government, for decades, has broadly tolerated mergers on the theoretical promise of efficiencies. Firms could join forces, attain economies of scale and scope, and potentially lower prices for consumers.

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