Thread by @econliberties

🚨HUGE: The @FTC and @JusticeATR released their highly-anticipated, updated merger guidelines earlier this morning.

That may sound wonky, but trust us, this is a BIG deal. Here’s why.🧵👇

ftc.gov/news-events/ne…

2/ Since the 1980s, merger policy has been a disaster.

Ticketmaster-Live Nation. Google-DoubleClick. Northrop-ATK. Facebook-Instagram. CVS-Caremark-Aetna. Hertz-Dollar. American-U.S. Airways. Disney-Fox.

3/ Big mergers waved through by antitrust enforcers have ruined industry after industry, from rental cars to Hollywood to the entire internet.

4/ Over the last 25 years, 75% of industries have gotten more concentrated, largely because of mergers.

Corporate concentration increases income and regional inequality, it hinders innovation and dynamism, and it harms workers.

economicliberties.us/our-work/confr…

5/ The prominent mergers are well-known, but there are harmful mergers everywhere.

In 2018, for instance, the Trump admin allowed this merger of two big gold mines in Nevada. The combined firm immediately destroyed the union and crushed small businesses.
hcn.org/issues/54.1/so…

6/ In our Courage to Learn report, we showed how the failure to enforce the Clayton Act – which is the law prohibiting mergers that increase market power – is at the root of our monopoly problem.

economicliberties.us/our-work/coura…

7/ The key is what are called merger guidelines, which are the guidance @JusticeATR and @FTC puts out to business leaders, the courts, and enforcers on what is legal and what isn’t.

8/ The first guidelines were in 1968, and were strict. But in 1982, Reagan Antitrust chief Bill Baxter published new antitrust guidelines basically saying @JusticeATR wouldn’t enforce merger law anymore.

justice.gov/archives/atr/g…

9/ Future admins followed Baxter’s lead. He drew from Bork, whose theory that ‘consumer welfare,’ aka short-term prices, was the only thing that mattered. Market structure, aka *power,* did not.

Thus came Ticketmaster-Live Nation, which was…horrible.
nytimes.com/2023/01/24/art…

10/ But consumer welfare-based merger policy was a disaster even by its own standard.

In 2013, John Kwoka looked at a mergers in concentrated industries allowed by the @FTC. Lots of caveats, but price increases were something like 6% per merger.
papers.ssrn.com/sol3/papers.cf…

11/ Rather than change their merger approach, the @FTC Bureau of Economics trolled Kwoka for showing they had failed.

And this is *after* the FTC allowed Google-DoubleClick, Facebook-Instagram, and Facebook-WhatsApp, all of which are well-known failures. ftc.gov/system/files/d…

12/ Now, we’re coming out of a merger frenzy.

In 2021, Professor Nuno Fernandes wrote “Well-capitalized companies will soon face a once-in-a-generation opportunity to make acquisitions and consolidate power.” 😳

13/ Layoffs, golden parachutes, and market consolidation are the result. And that concentration is hurting working families, workers and our supply chain.

It’s time for an update to these guidelines — which is where @FTC and @JusticeATR stepped in today.

14/ The agencies today released an important update to bring in all this new learning evidence discovered by economists, small business owners, consumers, and scholars over the past 15 years.

15/ The fact is that markets realities have changed dramatically over the years. This update reflects that.

16/ This has been a long and careful process, which involved reviewing thousands of public comments and hosting listening forums to learn about the real effects of corporate consolidation on regular folks across the economy.

17/ But here’s where you come in. 👋

The agencies aren’t releasing these guidelines in a vacuum. To democratize the process, they’re asking for comments from the public on these guidelines.

18/18 Are you a healthcare worker suffering from poor working conditions? Independent grocer that’s fighting against big box stores? Or an artist struggling to bypass Ticketmaster’s dominance?

@FTC and @JusticeATR want to hear from you.