Merger Policy at the Federal Trade Commission: What Changes, What Stays the Same?

Abstract

The Hart Scott Rodino program, coupled with the modern Merger Guidelines, has controlled merger enforcement for the last twenty years. Economists have offered numerous commentaries, some supportive of the status quo, others suggestive of change. This paper tabulates and evaluates information from Federal Trade Commission (FTC) merger reviews. The FTC’s workload focuses on horizontal mergers, with particular interest in health care, consumer goods, and a specific group of intermediary product industries. The evidence suggests that a shift away from coordinated interaction cases occurred after the introduction of the 1992 Merger Guidelines; since then, theoretical choices appear relatively stable. Abstracting from a large number of mergers to monopoly studied and almost always blocked by the Agency, coordinated interaction matters generally exceed unilateral concerns, although the 2011-2012 period may be an anomaly. Statistical analysis of the merger review process detects a little populism, but no evidence of partisan political influence on enforcement. Merger challenge decisions appear fact driven, with theory influencing which considerations are important, but not the weight given to the specific factors. Of particular interest are the findings of a more aggressive policy in homogeneous goods industries, with this impact offset by a finding of buyer power. Overall, it is the fact-based staff findings that appear to drive the merger review process.