Updating the Merger Guidelines: A Dynamic Reboot

In this article we offer a number of recommendations for updating the merger guidelines. Our comments address six distinct areas: (1) the guidelines’ structure, (2) guiding principles, (3) merger enforcement goals, (4) analysis of future competition, (5) innovation, and (6) efficiencies. The main theme of our comments is the importance of dynamic competition in merger analysis. Firms engage in dynamic competition by investing in innovation, product promotion, reputation, and productive capacity. We argue that preserving and enhancing dynamic competition should be a core goal of merger policy and that the new Merger Guidelines should reflect the importance of dynamic competition analysis in merger review.

By Jay Ezrielev & Joseph J. Simons^[1]

I. Introduction

In this article we offer a number of recommendations for updating the merger guidelines. The Federal Trade Commission (“FTC”) and the Department of Justice (“DOJ”) (the “Agencies”) have issued a Request for Information on Merger Enforcement (the “RFI”), seeking “public comment on how the agencies can modernize enforcement of the antitrust laws regarding mergers.”^[2] In the RFI, the Agencies seek information on how “new learning related to firm and market behavior” should inform the merger guidelines.^[3] The Agencies’ inquiry is aimed at “modernizing merger guidelines to better detect and prevent anticompetitive deals.”^[4] Our comments address six distinct areas: (