DOJ Antitrust Economist Agrees Merger Guides Are an Industry Benefit
Antitrust agencies aren’t obligated to provide extensive guidelines to merging parties about what deals might violate the law, DOJ’s Antitrust Division Chief Economist Susan Athey said Tuesday. Athey agreed with comments from panelists who argued it’s not the job of DOJ or the FTC to help companies avoid antitrust laws. She moderated a panel during the first of three co-agency workshops on the draft merger guidelines (see 2309010067).
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Law enforcement agencies don’t typically give guidance on what is and isn’t in the law, said Laura Alexander, director-markets and competition, Washington Center for Equitable Growth Markets and Competition: “They basically say, ‘The law is the law. You follow the law. And if we think you’ve broken the law, we’re going to prosecute you.’” She conceded antitrust is its “own world,” but agreed it’s up to the agencies to decide how much guidance they want to give companies. “It would only be to the extent that it’s useful to the agencies to have practitioners understand where the lines are,” she said.
“Absolutely,” Athey agreed. The guidelines help “shape” the decisions companies make, she said: “If they can’t understand which way is pro-competitive, you don’t have as much of an impact in shaping incentives.”
The draft guidelines are “helpful” for companies to identify issues that need to be considered when analyzing potential mergers, but they don’t “do enough” to describe what’s legal, said Fried Frank’s Barry Nigro, who worked for the FTC and DOJ during the Trump administration. The guidelines fall short in describing where the agencies will “exercise prosecutorial discretion in such a way that they’re not going to challenge a transaction,” he said: If the goal is to ensure anticompetitive transactions don’t “make it out of the boardroom,” there “needs to be a brighter line to what’s OK, what’s not OK.” Alexander said the agencies are under no obligation to “tie their own hands” with respect to enforcing laws on the books.
The guidelines do a good job in citing challenges specific to digital markets, said Cuneo Gilbert’s Amanda Lewis, who worked at the FTC 2012-22, including a detail with the House Judiciary Committee. Digital markets were a “real blind spot” for agencies in the past, she said. She noted there was bipartisan consensus on the committee that the agencies had a flawed approach to acquisitions in the tech sector. It should be a priority for the guidelines to address issues involving multisided platforms, network effects, self-preferencing and app store monopolies, she said. Vertical integration, like that seen with Amazon, can create a lot of harm and distort competition and “make it so we really don’t have competition on the merits,” she said.
Agencies need to be “particularly” concerned about market concentration getting worse in several sectors, said Public Knowledge Competition Policy Director Charlotte Slaiman. “There are so many industries already that are quite consolidated,” she said. “We do need to be particularly concerned about that consolidation getting worse, not just industries that aren’t very consolidated becoming consolidated.”