Merger Review

Supporters of more robust antitrust policy have pointed to the subsequent success of Figma after authorities blocked Adobe’s acquisition of it. Skeptics, including venture capitalists, have argued that the one case reveals nothing systematic about the benefits of stronger merger review. Venture capitalists happen to be the one party with the data and resources to fund the studies to show any systematic correlation one way or the other. They should do so, writes Shishene Jing.

In new research, Wei Cai, Andrea Prat, and Jiehang Yu evaluate how mergers affect employee satisfaction. They find that acquired firms report a decline in worker satisfaction, primarily revolving around “soft” benefits, such as workplace culture, management quality, and trust.

In new research, Xiao Dong, Paul Koh, Devesh Raval, Dominic Smith, and Brett Wendling evaluate how well divestiture remedies work for mergers in the supermarket industry. They find that past supermarket divestitures lead to lower employment, reduced sales, and higher rates of exit from the market relative to comparable non-divested supermarkets.  

In new research, Eric Dunaway, Ana Espinola-Arredondo, and Felix Munoz-Garcia examine the Herfindahl-Hirschman Index (HHI) as a tool for merger review and show where it diverges from the consumer-surplus and total-welfare standards. In particular, the HHI fails to account for potential efficiency gains.

In new research, Filippo Lancieri and Tommaso Valletti analyze the shortcomings of the current merger review system and defend stronger rebuttable structural presumptions as an important step forward.

In a recent revision of its Premerger Notification Regulation, the FTC removed labor market provisions from the previous draft as Commissioner Melissa Holyoak dismissed them as "a solution in search of a nonexistent problem." Eric Posner argues that her assessment contradicts a substantial body of academic research showing that labor market concentration is indeed a serious concern.

Eric A. Posner argues that merger review would benefit from involving union representatives to protect labor interests.