Letter to the Editor: Former FTC and DOJ Chief Economists Urge Separation of Economic and Legal Analysis in Merger Guidelines

Seventeen former chief economists of the Federal Trade Commission and the Department of Justice Antitrust Division urge current Agency heads to separate the legal and economic analysis in the draft Merger Guidelines to strengthen the role of the latter in merger review.

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We, the undersigned, have served as the chief economist dealing with mergers at the Department of Justice (Deputy Assistant Attorney General / Director of the Economic Policy Office) or at the FTC (Director of the Bureau of Economics). Some of us are Democrats, some Republicans and some neither. Some favorably view the more assertive antitrust posture of the current administration while some of us do not. But we are unanimous that the various versions of the Merger Guidelines since 1982 have been remarkably influential with courts because they have reflected a broad consensus about current economic learning. That learning is based on economic scholarship demonstrating how competition in the modern economy manifests itself, and it naturally evolves over time. That natural evolution requires that the Guidelines be updated from time to time, and we are pleased that the current administration is carrying out that update, though in this letter we are taking no position on the details of those Guidelines.

However, we observe that the current draft contains a large amount of legal analysis, argument, and interpretation. We strongly advise you to separate that material from the economic analysis. We fear that unless there is a document that reflects only durable, useful, and consensus economic understanding, the Guidelines will cease to remain a document that businesses and courts rely on in order to understand how the enforcement agencies interpret economic evidence.  

Without such a change there is a substantial risk of turning the Merger Guidelines into an advocacy piece reissued by each administration that inevitably has little weight with courts. That outcome would be counterproductive if the goal of the administration is to affect future enforcement. It also might create an unfortunate legacy for this administration: a permanent weakening of what was once a strong and well-respected tool for merger enforcement.

We urge that at least one of the Guideline documents remain focused solely on the interpretation of economic evidence in light of current consensus economic thinking. Our suggested—and traditional—format for the Guidelines will allow this administration to shape the analytical economic framework that will remain durable even as new administrations come into power.

Sincerely,