Cost-Benefit Analysis Without the Benefits or the Analysis: How Not to Draft Merger Guidelines

Previous iterations of the DOJ/FTC Merger Guidelines have articulated a clear, rigorous, and transparent methodology for balancing the procompetitive benefits of mergers against their anticompetitive costs. By describing agency practice, clear guidelines deter anticompetitive mergers while encouraging procompetitive ones, ensure consistent and reasonable enforcement, increase public understanding and confidence, and promote international cooperation.

But the 2023 Draft Merger Guidelines do not. They go to great lengths to articulate the potential anticompetitive costs of mergers but with no way to gauge “substantiality.” Most significantly, they ignore potential benefits of mergers, which eliminates the need for balancing. In other words, the Draft Guidelines provide very little guidance about current practice, which increases enforcement risk and thus deters mergers, which may be the point of the Draft Guidelines. In this Article, we offer specific recommendations that do a better job differentiating pro- from anticompetitive horizontal, vertical, and tech mergers.


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