The culmination of flawed antitrust policies by the Federal Trade Commission (FTC) and Department of Justice (DOJ) have discouraged pro-competitive mergers that could meaningfully benefit American consumers – a growing concern raised by former FTC general counsel and antitrust expert Alden Abbott in his recent Forbes commentary, “Time for a Merger Reset.”
“…Federal antitrust regulators, the Justice Department and the Federal Trade Commission, have actively discouraged mergers and acquisitions. This reflects the rejection of a longstanding bipartisan understanding that government should only oppose proposed M&A transactions that are likely to harm competition…The Trump Administration should reject it and return to the prior welfare-superior bipartisan understanding.”
Citing recent examples of harmful policies enacted by the FTC and DOJ – including the 2023 merger guidelines and recently finalized Hart-Scott-Rodino premerger notification rule – Abbott urges the incoming Trump administration restore a balanced approach to M&A enforcement. For the U.S. life sciences industry, M&A has driven decades of American innovation, entrepreneurship and leadership, and is fundamental to bringing new biopharmaceutical breakthroughs to patients.
Abbott makes the following arguments in his Forbes commentary:
- “[M&A] may help drive innovation, by enabling dynamic improvements in the use of assets that yield new and improved products. This may particularly be the case when M&A joins firms with complementary assets that can be melded to ‘work together’ more effectively.”
- “[M&A] may help generate cost and price-reducing scale economies…Scale economies may yield higher rates of innovation-producing R&D, as well as gains in marketing and productions.”
- “New 2023 FTC-DOJ Merger Guidelines do not include prior guidelines’ commitment to leave non-anticompetitive mergers alone. They also increase uncertainty by suggesting a wide variety of dubious potential theories that might spark agency challenges, in tension with the rule of law.”
- “A revised October 2023 FTC-DOJ Pre-Merger Notification Rule imposes major additional filing burdens on parties proposing a merger by requesting huge amounts of additional information unrelated to a merger’s actual competitive impact. Like the new merger guidelines, this change acts as an implicit ‘merger tax’ that discourages many beneficial mergers from being proposed.”
- “The new Trump Administration should shelve recent anti-merger policies…These actions would restore a balanced policy approach to merger policy. They would encourage more beneficial mergers to be considered and proposed to the benefit of the overall American economy.”
Click here to read the full article.