ARLINGTON, Va. (June 5, 2024) – The Consumer Technology Association (CTA)® today is releasing a new study that spotlights the shortcomings of the 2023 Merger Guidelines by the U.S. Department of Justice (DOJ) and the Federal Trade Commission (FTC). For more than 50 years, the agencies have used the Merger Guidelines as a tool in evaluating proposed mergers and transactions.
The report, “The 2023 Merger Guidelines: A Giant Leap in the Wrong Direction” was prepared by Dr. Daniel P. O’Brien of Compass Lexecon at the request of CTA. The study finds that the success of the Merger Guidelines in each revision prior to 2023 has been their reliance on the principles of economic science and past experience by the FTC and DOJ, in applying the guidelines to proposed transactions. By departing from established antitrust standards, the 2023 Merger Guidelines interject unpredictability and likely substantial additional costs into the market, the report shows.
The report concludes that the 2023 Merger Guidelines will prevent beneficial mergers that lie at the core of how market economies benefit society. By stopping these transactions, the effect will be substantial harm to competition in commerce through higher prices, less innovation, lower quality, lower wages, and other negative effects, thereby reducing GDP.
“This report affirms what CTA has long said – the new merger guidelines represent an anti-merger bent by this Administration,” said Gary Shapiro, CEO, CTA. “This study shows that the Administration’s anti-merger bias prioritizes unwarranted skepticism of transactions by companies of all sizes, while giving short shrift to entrepreneurial companies that benefit from a healthy transactional market and consumers who benefit from an innovative economy.”
CTA has long supported the goal of providing merger guidelines to the public, business community, and practitioners that are clear and durable, and that provide insight into objective merger review considerations, and respect longstanding antitrust precedent. The 2023 Merger Guidelines do not accomplish these objectives. Instead, the updated guidelines will have a chilling effect on procompetitive transactions that would fall hardest on the smaller companies, including startups, that drive consumer-benefiting innovation.