Center for American Progress

Strengthening Antitrust Enforcement by Modernizing Merger Guidelines
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Strengthening Antitrust Enforcement by Modernizing Merger Guidelines

Efforts by the Federal Trade Commission and the U.S. Department of Justice to revise merger guidelines offer an opportunity to strengthen antitrust enforcement.

Today, the Center for American Progress was pleased to submit a public comment to the request for information on merger enforcement issued by the Federal Trade Commission and the U.S. Department of Justice. CAP applauds the agencies’ efforts to revise the merger guidelines in order to improve antitrust enforcement. The comment is available in the public record and can also be found here.

Revision of the guidelines offers an opportunity to improve merger enforcement and the public’s understanding of the impacts of mergers. CAP recommends several points for inclusion:

  1. The guidelines should include relevant financial market measures to establish presumptions about competitiveness as indicia of market power in complex and multisided markets, as well as indicia of barriers to entry.
  2. The guidelines should explicitly consider the competitive harms of monopsony power, especially in labor markets, where racial and community impacts are pronounced.
  3. Consummated mergers should be the subject of systematic review, and data gathering should facilitate analysis of the racial and community impacts of mergers.
  4. Disguised surveillance and algorithmic manipulation by digital communication platforms are sources of market power, and these violations of privacy should be identified in the guidelines as barriers to entry and sources of harm to competition.
  5. The guidelines should seek to preserve dynamic competition in digital markets, which are prone to tipping toward oligopoly or monopoly.
  6. The guidelines should recognize the potential for competitive harm arising from digital platforms with strong network effects acquiring other competitors with network effects, especially if either firm enjoys social graph network effects.
  7. The guidelines should explicitly consider the competitive dynamics and market power arising from aggregated data, which is a critical input to digital services.
  8. Proposed mergers of independent third-party analytics firms by their gatekeeper platforms of focus harm competition and should be presumed to be anticompetitive.
  9. The guidelines should recognize that acquisition of a platform that offers interoperability by one without it can have negative competitive effects. Agencies should carefully weigh the technical and governance realities of application programming interface maintenance when determining related conduct remedies.

Each of these recommendations is discussed in detail in the comment.

The authors would like to thank Ben Olinsky, Erin Mahon, and Lauren Lafond for their contributions to this comment.

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Authors

Marc Jarsulic

Senior Fellow; Chief Economist

Adam Conner

Vice President, Technology Policy

Erin Simpson

Director, Technology Policy

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