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Letter to the Editor: Former FTC and DOJ Chief Economists Urge Separation of Economic and Legal Analysis in Merger Guidelines

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Seventeen former chief economists of the Federal Trade Commission and the Department of Justice Antitrust Division urge current Agency heads to separate the legal and economic analysis in the draft Merger Guidelines to strengthen the role of the latter in merger review.

Editor’s note: Letters to the Editor are occasionally published to allow academics to raise awareness on important and interesting issues related to ProMarket topics. Those wishing to respond should get in touch at ProMarket@chicagobooth.edu. ProMarket added to this letter the title, teaser, and titles and dates for the signees.


We, the undersigned, have served as the chief economist dealing with mergers at the Department of Justice (Deputy Assistant Attorney General / Director of the Economic Policy Office) or at the FTC (Director of the Bureau of Economics). Some of us are Democrats, some Republicans and some neither. Some favorably view the more assertive antitrust posture of the current administration while some of us do not. But we are unanimous that the various versions of the Merger Guidelines since 1982 have been remarkably influential with courts because they have reflected a broad consensus about current economic learning. That learning is based on economic scholarship demonstrating how competition in the modern economy manifests itself, and it naturally evolves over time. That natural evolution requires that the Guidelines be updated from time to time, and we are pleased that the current administration is carrying out that update, though in this letter we are taking no position on the details of those Guidelines.

However, we observe that the current draft contains a large amount of legal analysis, argument, and interpretation. We strongly advise you to separate that material from the economic analysis. We fear that unless there is a document that reflects only durable, useful, and consensus economic understanding, the Guidelines will cease to remain a document that businesses and courts rely on in order to understand how the enforcement agencies interpret economic evidence.  

Without such a change there is a substantial risk of turning the Merger Guidelines into an advocacy piece reissued by each administration that inevitably has little weight with courts. That outcome would be counterproductive if the goal of the administration is to affect future enforcement. It also might create an unfortunate legacy for this administration: a permanent weakening of what was once a strong and well-respected tool for merger enforcement.

We urge that at least one of the Guideline documents remain focused solely on the interpretation of economic evidence in light of current consensus economic thinking. Our suggested—and traditional—format for the Guidelines will allow this administration to shape the analytical economic framework that will remain durable even as new administrations come into power.

Sincerely,

Jonathan B. Baker

Director of the Bureau of Economics at the Federal Trade Commission from 1995 to 1998

Michael R. Baye

Director of the Bureau of Economics at the US Federal Trade Commission from 2007 and 2008

Timothy Bresnahan      

Deputy Assistant Attorney General at the Antitrust Division of the US Department of Justice from 1999 to 2000

Jeremy Bulow

Director of the Bureau of Economics at the US Federal Trade Commission from 1998 to 2001

Dennis W. Carlton

Deputy Assistant Attorney General at the Antitrust Division of the US Department of Justice from 2006 to 2008

Luke M. Froeb   

Director of the Bureau of Economics at the US Federal Trade Commission from 2003 to 2005; 

Deputy Assistant Attorney General at the Antitrust Division of the US Department of Justice from 2017 to 2018

Barry C. Harris

Deputy Assistant Attorney General at the Antitrust Division of the US Department of Justice from 1992 to 1993

George A. Hay

Director of Economics of the Economic Policy Office at the Antitrust Division of the US Department of Justice from 1973 to 1979


Kenneth Heyer

Deputy Assistant Attorney General at the Antitrust Division of the US Department of Justice from 2004 to 2006 and 2008 to 2009

Bruce H. Kobayashi

Director of the Bureau of Economics at the US Federal Trade Commission from 2018 to 2019

Francine Lafontaine

Director of the Bureau of Economics at the US Federal Trade Commission from 2014 to 2015

Daniel L. Rubinfeld

Deputy Assistant Attorney General at the Antitrust Division of the US Department of Justice from 1997 to 1998

Michael A. Salinger  

Director of the Bureau of Economics at the US Federal Trade Commission from 2005 to 2007

David Scheffman

Director of the Bureau of Economics at the US Federal Trade Commission from 1985 to 1988 and 2001 to 2003

Marius Schwartz

Acting Deputy Assistant Attorney General at the Antitrust Division of the US Department of Justice in 1999

Fiona Scott Morton

Deputy Assistant Attorney General at the Antitrust Division of the US Department of Justice from 2011 to 2012

Andrew Sweeting

Director of the Bureau of Economics at the US Federal Trade Commission from 2020 to 2021

Disclosure: Some of the undersigned are currently consulting for parties that have a financial interest in the Merger Guidelines.

Articles represent the opinions of their writers, not necessarily those of the University of Chicago, the Booth School of Business, or its faculty.

Further Reading: Dennis Carlton and Fiona Scott Morton have previously written their thoughts on the draft Merger Guidelines for ProMarket. You can read Carlton’s analysis here and here and Scott Morton’s analysis here. Read more of ProMarket’s coverage of the draft Merger Guidelines here.

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