February 14, 2023
Despite Success, Merger Remedies Face Increased Skepticism at Antitrust Agencies
Key antitrust leaders at Federal Trade Commission (FTC) and Department of Justice (DOJ) have voiced skepticism about business divestiture offers as remedies in merger cases, signaling that these agencies may be poised to limit or even abandon the practice entirely. In a new insight, Competition Economics Analyst Fred Ashton examines how merger remedies work, the FTC and DOJ’s questions surrounding the practice, and how ending it could harm consumers.
- The antitrust agencies have a history of entering into negotiated settlements involving divestitures and other remedies in order to consummate mergers.
- Ending this practice would ignore the findings of a retrospective analysis of merger remedies from 2006–2012—conducted by the FTC itself—that found the practice had overwhelming success in maintaining or restoring competition in the relevant market.
- Abandoning divestiture offers as remedies in merger cases would likely lead to fewer mergers being consummated, ultimately harming consumers who would otherwise benefit from a merged company better equipped to meet their needs.