Proposed Merger Guidelines Would Be a Radical Shift in U.S. Antitrust Policy if Enacted, Says ITIF

WASHINGTON—Following the release of a draft update of merger guidelines from the U.S. Justice Department and Federal Trade Commission, the Information Technology and Innovation Foundation (ITIF), the leading think tank for science and technology policy, released the following statement from ITIF President Robert D. Atkinson:

Since taking office, the Biden administration has embraced a neo-Brandeisian view of antitrust that holds that “big is bad”—the ideal economy should have more small and medium-sized firms. These proposed merger guidelines reflect that ideological predilection. Make no mistake, if these guidelines are adopted, U.S. economic growth, innovation, and global competitiveness will suffer.

As drafted, the updated merger guidelines represent a radical shift in U.S. antitrust policy. It would depart from more than a half-century of bipartisan agreement that merger analysis under the Sherman and Clayton antitrust acts should have anti-competitive and pro-competitive considerations.

For example, the proposed guideline 8 says,“mergers should not further a trend toward concentration”—which would mean that, by definition, mergers would no longer be allowed. Unfortunately, the Neo-Brandeisians at DOJ and the FTC want to go back to the days of FTC v. Brown Shoe Co., when the government blocked a merger between two shoe stores that together would have held 2.3 percent of the market.

In the administration’s ideal world, government would break up big firms to attain a utopian small-firm, hyper-competitive economy. But since the administration cannot achieve that goal politically, it is trying to do the next best thing: ban all mergers. Thankfully, as we saw in the recent court decisions about the proposed Microsoft-Activision merger, the courts are still the last bastion preventing a fundamental reinterpretation of U.S. antitrust law.