U.S. Chamber of Commerce Survey: Regulators’ Proposed Approach to M&A Ignores Market Reality

Oct 24, 2023 | Blog Post

A recent survey by the U.S. Chamber of Commerce sheds new light on the flaws of the Federal Trade Commission (FTC) and Department of Justice’s (DOJ) proposed approach to review and enforcement of mergers and acquisitions (M&A). The agencies’ two proposals – the 2023 Draft Merger Guidelines and proposed premerger notification and review rule – would represent a dramatic shift in U.S. competition policy with grave consequences, particularly across the U.S. life sciences ecosystem.  

In this survey, antitrust experts weighed in with their perspective on the agencies’ proposals. Their key insights are highlighted below: 

  1. The agencies’ proposals lack a basis in widely accepted principles of competition.  
    • 9 in 10 antitrust practitioners feel that the Draft Merger Guidelines do not reflect the current state of antitrust law. 
    • 8 in 10 experts surveyed believe that the Draft Merger Guidelines are unaccompanied by appropriate economic analysis. 
    • As a result, respondents unanimously agreed that the revised merger guidelines fail to provide substantively more effective guidance than past guidelines. 
  1. The agencies are poised to abandon decades of balanced and bipartisan U.S. competition policy in favor of politically motivated hostility toward M&A. 
    • 8 in 10 antitrust practitioners agreed that the Draft Merger Guidelines represent a politicized approach to antitrust enforcement.
      • By comparison, just 11% of respondents said the same of the past four decades of U.S. competition policy. 
    • Nearly 9 in 10 antitrust experts agreed that the existing premerger notification and review process is sufficient to detect mergers that could harm competition. 
  1. The agencies significantly underestimate the burden that their proposals would place on pro-competitive mergers, unnecessarily deterring M&A that would benefit consumers. 
    • The FTC estimates that assembling the documents and other information necessary to comply with their proposed premerger notification and review rule would cost merging parties:
      • 107 hours of additional work; and
      • $50,000 in additional labor costs, in total. 
    • Yet this estimate misses the mark considerably. Indeed, the experts surveyed place the true costs at more than double the agency’s estimate:
      • Over 241 hours of additional work over 22 additional days; and 
      • More than $234,000 in fees from outside counsel alone, not including the costs of internal labor and other administrative costs.

Policies like these needlessly interfere with M&A and risk chilling investment and innovation – an effect felt acutely across the life sciences ecosystem. M&A serves as a pathway for life sciences companies of all sizes to advance breakthrough treatments and cures for patients. With thousands of promising new treatments and cures on the horizon, it is vital that our policymakers do not lose sight of the facts and preserve the balanced approach to M&A that patients have relied on for decades.