The DOJ/FTC’s Problematic Approach to Potential Competition: Global Antitrust Institute Comment on the Proposed Merger Guidelines

ABSTRACT:

The guidance on potential competition provided in the DOJ/FTC’s proposed merger guidelines is highly problematic. First, the agencies’ definition of a “concentrated market” is too expansive. Second, the agencies borrow familiar legal and economic phrases used by the Supreme Court in decisions involving potential competition; however, the agencies appear to redefine what those phrases mean. Third, the agencies adopt a “heads I win, tails you lose” tactic. Namely, one logical byproduct of the agencies’ expansive definition of a potential competitor is that this means there are a lot of potential competitors associated with a given market, which clearly makes it easier for the agencies to condemn an acquisition. However, this also means that assessing acquisitions involving current competitors and other potential competitors should consider this expansive set of potential competitors. Yet, the proposed guidelines explicitly prohibit this consideration.