Fix It or Forget It: A “No-Remedies” Policy for Merger Enforcement

The inherent limitations of remedies as a method of resolving competitive concerns with mergers have become more evident. The expansive use of remedies in actual practice has likely exceeded the capabilities of agencies and courts; and empirical evidence has increasingly cast doubt on their effectiveness. Accordingly, we propose a “no-remedies” policy under which the antitrust agency would not accept any conduct remedies and only limited divestitures. The agencies would only consider those structural changes that have been undertaken (or at least committed to) prior to the parties’ filing their merger proposal and would not enter into negotiation with the parties during the review period. This “Fix It or Forget It” (“FIFI”) policy would encourage merging parties to initiate the necessary competitive fixes and permit the agency to evaluate precisely what the parties file in their proposal. We believe this policy would strengthen merger enforcement by restoring the traditional roles of the agencies and the courts.

By John Kwoka & Spencer Weber Waller¹

I. INTRODUCTION

Over the past several years, merger remedies have come under ever closer scrutiny. Adverse experiences have exposed the difficulties of fashioning effective remedies while academic studies have documented the frequency with which remedies have failed. This is particularly true for conduct or behavioral remedies, which proscribe specified actions on the part of the merged firm, but it is