In a white paper released today “Realigning Merger Remedies with the Goals of Antitrust,” the American Antitrust Institute makes the case for why remedies policy may be at an important inflection point. The paper notes that we do not yet know the full extent to which rising concentration, slowing rates of startups, and widening inequality gaps are the product of the lax antitrust enforcement that has prevailed in U.S. for three decades. But as the story continues to unfold, it remains clear that merger enforcement should be high on the antitrust agenda.
The U.S. Department of Justice and Federal Trade Commission are in a unique position to learn from their past experience in merger enforcement, particularly as to the effectiveness of their remedies. The white paper highlights the importance of merger remedies in the broader debate over the role and goals of antitrust. It argues that a number of themes are converging to create an inflection point in remedies policy.
One theme is a clearer emphasis on the role of antitrust in protecting competition and promoting consumer welfare through the process and goals of law enforcement. Remedies policy should be aligned with the mission and workings of antitrust, namely through the crafting of effective remedies that deter anticompetitive conduct.
A second development is the expanding body of evidence on the success and failure of past merger remedies. Merger “retrospectives” and agency guidance reveal the limitations of both conduct (i.e., behavioral) and structural fixes. This evidence and experience should be reflected in remedies policy.
A third theme is the expanding number of cases where the agencies blocked or forced the abandonment of a merger because an effective remedy could not be found. This highlights the fact that the government’s move to block a merger is in itself an effective remedy. We may see more of this, given the more frequently encountered problem of “too big to fix.”
The paper begins with some context for revisiting merger remedies by summarizing the major elements of the current debate over antitrust and lessons learned from sector regulation, where remedies are also important. The analysis then moves to the three themes described above: merger remedies as the product of the law enforcement process; growing agency evidence and experience with remedies; and the limitations of remedies in light of more recent cases.