Toward a Merger Enforcement Policy That Enforces the Law: The Original Meaning and Purpose of Section 7 of the Clayton Act

Abstract

The corporate merger has been the single most important vehicle for the consolidation of economic power and control in America since the late-nineteenth century. In response, Congress has repeatedly sought to restrain the role of corporate mergers in American economic life, passing sweeping anti-merger laws three separate times between 1890 and 1950. Since the 1980s, however, the full force of these laws has not been felt in our economy. It has been crippled by administrative fiat and judicial acquiescence. From Reagan and Clinton through Obama and Trump, the federal agencies and courts tasked with enforcing the nation’s antitrust laws have embraced antitextualist interpretations and ignored the original meaning and purpose of the laws Congress passed to constrain mergers.

Today, the consequences have become all too clear. The concentration of economic power has reached extremes unsurpassed in living memory. Oligopolies have become entrenched across our economy. Dominant firms have increased mark-ups for consumers, depressed wages for workers, and squeezed farmers and other suppliers. What the FTC once called the “dead hand of corporate control” has all but eliminated the “unseen hand of competition” in many of the nation’s basic industries, while roll-ups and other monopolistic acquisition strategies are fast displacing competition in the industries where it remains a vital force.

This Article seeks to point judges and enforcers back to the text and purpose of the core antitrust law governing mergers—Section 7 of the Clayton Act.

Keywords: antitrust, merger, mergers, Clayton Act, 1950 Amendments, antimonopoly, democracy,