Mergers & Antitrust Law News

FTC Republican Proposes More Leeway for Merger Deals (1)

Feb. 15, 2019, 9:03 PMUpdated: Feb. 15, 2019, 10:53 PM

The U.S. should consider moving to a “total welfare” antitrust standard that would allow companies to show the aggregate benefits of a merger deal, not just its potential impact on consumers, Federal Trade Commissioner Christine Wilson said.

The approach, favored by conservative antitrust scholars, could make it easier for companies to justify deals that raise competition concerns and have regulators take into account the deal’s benefits to the merging parties.

Some competition advocates are pushing regulators to move in the opposition direction. They argue that U.S. antitrust enforcement under the current “consumer welfare” standard doesn’t go far enough. Under the current approach, antitrust regulators weigh the competitive impact of deals based largely on how it would impact consumers.

“Unfortunately, the current dialog regarding the appropriate welfare standard hasn’t paid much attention to the total welfare standard,” Wilson, a Republican, said at a conference hosted Feb. 15 by George Mason University.

She said the consumer welfare standard “makes judgments about the distribution of wealth.”

“The total welfare standard would maximize efficiency, not determine distribution of surplus,” she said.

In some cases, a deal that wouldn’t pass muster under the consumer welfare standard could be deemed lawful under the total welfare approach, Wilson told Bloomberg Law after her remarks. But this would likely happen in limited situations, not with the vast majority of deals, she said.

(Updated with additional reporting)

To contact the reporter on this story: Alexei Alexis in Washington at aalexis@bloomberglaw.com

To contact the editors responsible for this story: Roger Yu at ryu@bloomberglaw.com; Seth Stern at sstern@bloomberglaw.com

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