Global Antitrust Institute Comment on the 2023 Draft Merger Guidelines’ Emphasis on Structural Antitrust

Abstract

Heavy or near-exclusive reliance on concentration statistics to predict the competitive effects of structural transactions is a questionable methodology as a matter of both law and economics. It was abandoned forty years ago when the flaws in its economic foundation were brought to light by additional study. Correlatively, the law as it stood prior to 1968 was brought into better alignment with sound economic analysis by later Supreme Court decisions. While the DMGs purport to restate the law, their reversion to the concentration approach is in fact a repudiation of the current law, which has been based on superseding economic and legal analysis. Resurrection of the concentration approach is likely to result in significant error costs, including overdeterrence of procompetitive or competitively neutral transactions that could contribute substantially to innovation, increased output and improved products, cost reductions and more optimal pricing.

Keywords: antitrust, mergers, concentration, market structure, Herfindahl-Hirschman-Index, Horizontal Merger Guidelines, Vertical Merger Guidelines, Draft Merger Guidelines

JEL Classification: D04, D21, D40, K21, L10, L13, L22, L40