Presenting remarks at a special twentieth anniversary celebration of the 1982 Department of Justice (DOJ) Merger Guidelines at the Department yesterday afternoon, Federal Trade Commission Chairman Timothy J. Muris said the Merger Guidelines "fundamentally changed the way we think about mergers and how we should formulate competition policy." Muris commended the drafters of the Merger Guidelines, not only for their participation in the creation and evolution of the Merger Guidelines, but also for other - and in many cases continuing - contributions to the antitrust dialogue.
Specifically noting the contributions of former Assistant Attorney General for the Antitrust Division of the DOJ William F. Baxter in crafting the Merger Guidelines, Muris observed that in the past 20 years, the Merger Guidelines have become more than "a matter of national significance . . . the analytical ripples of the 1982 Merger Guidelines have covered the globe." According to the Chairman, three major lessons stand out: 1) the benefits of transparency; 2) the role of self-limiting principles; and 3) the power of ideas.
First, Muris said, the Merger Guidelines illustrate the value of transparency - "having public antitrust authorities clearly state their enforcement intentions, even at the risk of relinquishing the capacity to employ enforcement approaches that well-specified guidelines might disavow or disfavor." He noted that the 1982 Merger Guidelines demonstrate that the quality of policy improves when public officials specify clearly the bases on which they exercise their authority.
Next, focusing on the role of self-limiting principles, Muris said that "the design and implementation of the 1982 Merger Guidelines reveal that formulating sensible antitrust policy requires continuing efforts to ensure that current practice reflects the best possible understanding of economics and law." He further noted that, "by adopting self-limiting measures that properly circumscribe the zone of anticipated activity, a government agency can increase the legitimacy and effectiveness of its enforcement program."
Third, Muris said the Merger Guidelines demonstrate the power of ideas and an "intellectually sound approach to antitrust policy." Although the Merger Guidelines lack the force of law, they "have exerted enormous influence on the antitrust enforcement community and the courts in the United States. Many other nations have emulated them in designing their own merger control regimes. Nothing can be said to have 'compelled' this result, save the power of ideas embodied in the Guidelines."
Finally, the Chairman said that while the Merger Guidelines initially may have been met with skepticism, their impact "shows that a single institution's investments in research and policy analysis have as much capacity to shape conceptions of antitrust policy - indeed, to foster adjustments in competition analysis around the globe - as the prosecution of cases." He also credited their "ability to exercise considerable intellectual power" to their ability to evolve over time. The Department of Justice first issued the Merger Guidelines in 1968, revised them in 1982, amended them further in 1984, and then, joined by the FTC, amended them in 1992 and 1997. "These Merger Guidelines will retain their viability," Muris concluded, "only if the federal agencies remain open to future adjustments informed by improvements in economic and legal learning, and if the agencies make efforts to analyze and learn from the results of past implementation."
The FTC's Bureau of Competition seeks to prevent business practices that restrain competition. The Bureau carries out its mission by investigating alleged law violations and, when appropriate, recommending that the Commission take formal enforcement action. To notify the Bureau concerning particular business practices, call or write the Office of Policy and Evaluation, Room 394, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave, N.W., Washington, D.C. 20580, Electronic Mail: email@example.com; Telephone (202) 326-3300. For more information on the laws that the Bureau enforces, the Commission has published "Promoting Competition, Protecting Consumers: A Plain English Guide to Antitrust Laws," which can be accessed at http://www.ftc.gov/bc/compguide/index.htm.