The Biden administration is moving forward with new merger enforcement guidelines, despite recent setbacks in court. These defeats raise doubts about the effectiveness of their aggressive approach to antitrust enforcement.
At a recent event organized by the Federal Trade Commission (FTC) and the Department of Justice (DOJ), several antitrust experts expressed criticism of the Biden administration’s strategy.
One of the prominent critics is Barry Nigro, a former antitrust enforcer in the Trump administration and a partner at law firm Fried Frank. During a panel discussion, Nigro pointed out that the new guidelines fail to consider recent court decisions that challenge the government’s skepticism towards vertical mergers. Vertical mergers involve two companies at different points in a product supply chain seeking to merge.
A notable example is Microsoft Corp.’s planned $75 billion acquisition of video game maker Activision Blizzard Inc. The FTC attempted to block this merger, arguing that it would diminish competition in the gaming industry. However, a federal appeals court denied the FTC’s request in July, and the agency is now contemplating dropping its opposition altogether.
Nigro argues that these courtroom defeats, along with another high-profile loss against Facebook parent Meta Platforms Inc., suggest that the courts are not convinced by the Biden administration’s reinterpretation of antitrust law.
Furthermore, Nigro criticizes the guidelines for failing to provide clear criteria for determining which mergers are acceptable to the FTC and DOJ. He believes that this omission undermines the purpose of the guidelines, which is to prevent anticompetitive mergers from being approved.
These criticisms align with other concerns raised about the guidelines since their release, with some observers suggesting that they prioritize messaging over actual policy.
Robert Kaminsky, an analyst with Capital Alpha Partners, characterizes the guidelines as a “political exercise” that is likely to have less impact in the courts compared to previous iterations.
