The U.S. Department of Justice and Federal Trade Commission 2023 Merger Guidelines: An Account and a Few Positive and Many Negative Assessments

Abstract

This Article summarizes and criticizes the DOJ/FTC’s 2023 Merger (M&A) Guidelines. Part I argues that the Agencies’ claim that the Guidelines are not binding, violates the antitrust laws’ addressees’ constitutional right to fair notice . Part II discusses the Agencies’ failure to articulate their understanding of the (M&A)-related tests of illegality the Clayton and Sherman Acts respectively, promulgate. Part III argues that the Agencies’ account of the U.S. antitrust law’s goals are ill-formulated and includes some goals of questionable desirability. Part IV explains why “market definitions” are inherently comprehensively arbitrary and why market-oriented approaches to analyzing the legality of (M&A)s are therefore inaccurate and their use by the Agencies is unconstitutional and avoidable. Part V delineates the various ways in which (M&A)s can affect the intensity of price-competition, analyzes the determinants of these possible impacts, and points out that the Guidelines mis-state the relevance of many such determinants and totally ignore many other such determinants. Part VI analyzes the various ways in which (M&A)s can affect the intensity of investment-competition, analyzes the determinants of the magnitudes of each of these possible impacts, points out that the Guidelines provide little information about the approaches the Agencies will take to these issues, and argues that the Agencies do not understand the determinants of the effectiveness of potential competition and may subscribe to the erroneous limit-pricing theory. Part VII delineates the correct way to analyze whether an (M or A) violates the Sherman Act and points out that the Guidelines provide almost no information about the way in which the DOJ will approach this issue. Part VIII criticizes various positions that the Guidelines take on the antitrust illegality of vertical (M&A)s.