DOJ’s Kanter Says Efficiency Defense for Mergers Is Under Review

US antitrust enforcers are rethinking how much weight to give the cost-savings claims by companies seeking to merge as they rewrite federal guidelines, the Justice Department’s top antitrust official said Tuesday.

Assistant Attorney General for Antitrust Jonathan Kanter said the DOJ and Federal Trade Commission’s forthcoming guidelines will reconsider so-called efficiency arguments for mergers, calling it an area where antitrust policy has diverged from the law.

Jonathan Kanter

Photographer: Valerie Plesch/Bloomberg

Kanter, speaking at a conference hosted by Georgetown Law School in Washington, declined to say when the new guidelines -- which antitrust enforcers use to assess whether a deal violates antitrust laws -- would be completed. When the project was announced in January, the DOJ and FTC said they hoped to issue a draft by the end of 2022.

Prior story: U.S. Antitrust Cops Eye Tougher Merger Rules Amid M&A Surge

Speaking to reporters on the sidelines of the conference, Kanter said the agencies are eying a single set of rules on mergers, instead of one focused on mergers between direct competitors and a second for deals involving companies that operate in the same supply chain but don’t compete directly.

The merger guidelines revamp is a response to President Joe Biden’s initiative to tackle the spread of dominant companies across the economy and boost competition through antitrust enforcement. The administration has faulted increased consolidation for higher prices for consumers and lower wages for workers.

Any changes could make it harder for companies to win approval for takeovers though, in the U.S., enforcers must ultimately convince federal courts to block deals.

To contact the reporter on this story:
Leah Nylen in Washington at lnylen2@bloomberg.net

To contact the editors responsible for this story:
Sara Forden at sforden@bloomberg.net

Jon Morgan

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