Justice Department and the Federal Trade Commission officials said today they will consider revising 17-year-old guidelines regulators rely on when judging whether proposed business mergers are anticompetitive.
“In light of legal and economic developments that have occurred since the last major revision of the guidelines, it is an appropriate time for the antitrust agencies to conduct a review of the guidelines to determine whether any revisions should be made to better protect American consumers and businesses from anticompetitive mergers,” said Christine Varney, Assistant Attorney General in charge of the Department’s Antitrust Division, in a statement.
After a period of public comment, the agencies will host five workshops, scheduled to take place in December and January. (The FTC will post a series of questions on its Web site later today to jump-start the discussion. They can be found here.) Varney said the regulators’ goal is to provide businesses “greater certainty when making merger decisions,” creating a more competitive marketplace that benefits consumers.
Dow Jones’ Brent Kendall nicely summarizes the arguments for revision:
Advocates for revising the merger guidelines, published in 1992, say the government’s written merger policies no longer accurately reflect the real-world practice of how U.S. antitrust agencies review mergers, which creates uncertainty for companies considering merger and acquisition transactions.
Critics also say the merger-guideline numbers used for measuring business-market concentration are too low and flag too many mergers as having possible anticompetitive effects.
FTC Chairman Jon Leibowitz said the 1992 guidelines include language anticipating revision from time to time. ”We think the time has come to do that,” he said a statement.
According to a DOJ news release, the regulators will consider the following topics:
the overall method of analysis used by the agencies; the use of more direct forms of evidence of competitive effects; market definition; market shares and market concentration; unilateral effects, especially in markets with differentiated products; price discrimination; geographic market definition; the relevance of large buyers; the distinction between uncommitted and committed entry; the distinction between efficiencies involving fixed and marginal cost savings; the non-price effects of mergers, especially the effects of mergers on innovation; and remedies.