Federal Trade Commission (FTC) Chair Andrew Ferguson announced Tuesday that the 2023 joint merger guidelines adopted by the Biden administration's FTC and Department of Justice (DOJ) are still in effect. While continuity in merger policy is crucial for economic decision making, the 2023 guidance abandons the consumer welfare standard for an anachronistic approach based on market shares. The Trump administration should not perpetuate the Biden administration's error.
The FTC and DOJ published their first joint guidelines in 1992. There have only been three revisions since. Ferguson explains that the continuity of these guidelines between administrations avoids "a recriminatory cycle of partisan rescissions" that frustrates the ability of businesses to plan. The deluge of filings submitted to the FTC's Premerger Notification Office in advance of the Commission's updated transaction thresholds and filing fees is evidence of this uncertainty; submitting before the most recent filing change saved firms over $100,000 on multi-billion-dollar mergers. Ferguson's concern about inconstant merger guidelines is well founded, but he ignores that the 2023 guidelines are themselves economically harmful.
Daniel Gilman, senior scholar of competition policy at the International Center for Law and Economics (ICLE), explains that merger guidelines are not federal regulations; they do not carry the force of law. Still, these guidelines can exert "some influence on the courts," which can cite them as persuasive authority, similar to law-review articles, noted treatises, and other expert opinions, per Gilman.
