Assistant A.G. Kanter Delivers Remarks at 2023 Georgetown Antitrust Law Symposium
* * *
This conference has been an antitrust policy highlight for many years. In fact, at the Third Annual
A lot has changed in those 14 years. While I'm sure the audience here at Georgetown had many thoughts, only 44 commenters wrote to the agencies in response to that initial call for comments.[1] The broader public showed little interest in increasing antitrust enforcement. Agency staffing levels were continuing a decades-long decline.
Today, we are working to revise the merger guidelines against a very different landscape.
Since 2010, we have heard growing concerns about the level of competition in key sectors of the American economy. Waves of academic studies document how the public loses out when mergers lessen competition in industries across our economy.[2]
The problem is not limited to consumer markets. At the same time, a robust literature has emerged documenting how workers lose out from too little labor market competition.[3] We have the good fortune to have
The biggest change since 2009, though, has been the public's awareness of consolidation and the resulting harms. Numbers in regressions are one thing, but real harms to real people are reawakening Americans to the importance of antitrust enforcement.
We are hearing that loud and clear in the public comment process. Our initial request for comment on the guidelines generated over 5,000 responses from the public. And yesterday, the comment period on the draft closed with over 3,000 comments submitted on Regulations.gov
and thousands more e-mailed to the agencies. The public comments overwhelmingly call for vigorous merger enforcement.
For example, we received several hundred comments from writers and other creators concerned about the impacts of media-industry consolidation on their profession. We have so many comments like the one from a television writer who told us that "the more the media companies merge, the fewer jobs are available for writers, and less compensation is offered."[4]
We hear a startlingly similar concern from doctors, nurses and other healthcare workers who report that consolidation has made it harder to do what they love and treat patients with care and flexibility. One ICU nurse from
I want the writers, nurses, farmers, concerned citizens and all the other public commenters to know -- the
For that reason, we will read all the comments, from lay people and experts alike, with care. We will assess suggested revisions with an open mind.
As we work to finalize the guidelines, we will continue to apply an important limiting principle. We are law enforcers, and the law limits our discretion. It is up to
That is how we think about enforcement and think about the guidelines in an era of renewed interest. The
Readers should understand that the guidelines are not the law. The
Likewise, when we explain situations we tend to think might suggest the potential for a violation, we must also acknowledge that in each case we would review other pertinent factors to reach the appropriate decision. The draft Merger Guidelines already reflect these important limitations.[7]
Our merger guidelines are still important, however. For example, they provide transparency to merging parties and impacted citizens. When we explain frameworks we most frequently apply, the agencies empower the public to engage with us. Maybe you or your clients disagree with the law or economics as we see them, but the process will work better if you know how we are thinking as we review a deal.
The guidelines also foster consistency and predictability, while at the same time preserving the flexibility
Our guidelines also shape the language that the agencies use to talk about mergers in public and in the courts. In an era when the broader public is interested in merger review, and when we are litigating more and more often, the guidelines should guide us to build cases that invite and enable the public.
So what comes next? We are thrilled to have an overwhelming comment response to our draft guidelines. We will work as quickly as we can so that our final guidelines can realize the goals of transparency and predictability.
As we undertake that revision and continue to review mergers, I will have three core principles in mind.
First, we need to ask how competition presents itself in the context of each merger. Our merger analysis must reflect market realities. The inescapable reality of modern markets is that competition plays out in many ways, across many different dimensions.
At times, we have fallen into the trap of assuming a standard model of competition for merger review. Static price competition is incredibly important, and we will continue to fight for consumers to benefit from competition through lower prices and increased quality. But we have so much more to protect as well.
Competition varies widely across industries and over time, and the nature of competition may be different from one merger to another. For example, so-called zero-price markets are increasingly important, with consumers exchanging their personal data and their time.[8] Competition for platforms, on platforms and to displace platforms are all critical.[9] Labor markets ensure competition for workers' wages.[10] And new forms of competition are frequently emerging, from generative AI to algorithmic pricing.[11]
That is why the draft guidelines begin by asking "how does competition present itself in this market..."?
That emphasis, on competition, follows through the rest of the document. Each of the prima facie frameworks in Section II focuses on competition. The rebuttal section uses the same approach, recasting the analysis generally in terms of effects on competition. The draft contains critical aspects of the economic analysis that are applicable to both of those sections. Focusing on competition, as
That brings me to my second fundamental point. What is the right question to ask about competition? I believe the Clayton Act presents that question. The Clayton Act directs us to ask whether the effect of a merger "may be substantially to lessen competition or to tend to create a monopoly." It asks us to assess the risk a merger poses to competition. This approach vindicates
I think a lot about the kinds of problems articulated by that ICU nurse. Does the Clayton Act reach harm to competition that results in overworked and under supported nurses even when we cannot point to a higher price?
I recently sat by as a loved one received major life-saving surgery from dedicated and attentive professionals in a community hospital. The level of care and attention that dedicated nurses, professionals and doctors were providing to their patients was rare -- if not unprecedented -- by today's standards. I am eternally grateful. As I watched that, I was absolutely convinced that quality of care and attention is worthy of protection, even when it is difficult, if not impossible, to attach to it a monetary value. We must ask ourselves, is antitrust really working for the public when we reduce human life to a grayed-out triangle? The product is so much more than that, and people are so much more. Competition benefits them both.
Competition was difficult to measure in 1914, but
That uncertainty drives the innovation and opportunity that make our economy tick and delivers ever-increasing rewards to consumers and workers alike. As enforcers in
That is why the Clayton Act prohibits all mergers where the effect "may be" substantially to lessen competition or to tend to create a monopoly. In any given transaction, we should use the best analytical and evidentiary tools available to help us identify a risk of harm.[13]
Importantly, the risk assessment framework applies to both the evaluation of the agencies' prima facie case and to rebuttal evidence. As the draft guidelines explain, we first ask whether facts show that the effect of the merger "may be" to substantially lessen competition. Then on rebuttal, we take seriously other evidence that demonstrates the merger does not, in fact, "threaten" to lessen competition.[14]
I have to acknowledge on this point the incredible work that
Third, let me briefly address how we do that. Merger analysis is not a one-size-fits-all exercise. In different situations, different tools will shine the clearest light on a merger's risk of harming competition.
Three important examples are direct evidence, empirical evidence and market structure. The draft guidelines describe these important tools in detail.
In some cases, we have direct evidence.[15] Documents and testimony can reveal that merging parties live rent-free in each other's heads. What more do we need to know than that a merger will eliminate rivalry that has driven lower prices, better service or innovation in the past? If the CEO said a merger would eliminate a nascent threat, the Clayton Act says we should listen and pay attention to the "man behind the curtain."[16]
In other cases, red flags may emerge from the data. The draft merger guidelines add econometric analysis to the "sources of evidence" section from prior guidelines. As they explain, analytical work can help us understand competitive dynamics. That's true even if the data or modeling techniques don't report results as a specific price effect prediction. As I have been saying, it's time to modernize, and that means relying on the full set of available empirical and evidentiary tools that help us understand how competition plays out.
Ask yourselves this question: in 2023 should we use static models to model the behavior of "rational consumers" or should we use cognitive science, behavioral economics and the full range of analytical tools and evidence to understand the idiosyncratic behavior of humans? The answer to that question should be obvious.
Another useful tool remains looking at how a merger will change the structure of the market. The structural presumption tells us something about the risk a merger poses to competition. When a merger further concentrates a highly concentrated market, we should be concerned it may eliminate important competition between firms and create a risk of oligopoly coordination. As the draft guidelines say, the greater the concentration, the greater the risk. The courts say that as well, again and again.
I should say that I have heard concerns from some members of the defense bar that the approach to the structural presumption in the draft guidelines is inconsistent with modern district court cases. They can rest assured that, even at 60 years old,
As you know from the draft guidelines, those are just a few of the tools the agencies most often use to identify a risk of harm to competition.
We also need to be clear-eyed that none of these tools can perfectly predict or measure the complex and dynamic economy in which we live. The tools of merger review are signals of potential danger, not photos of the future or a crystal ball. This means that we must construct our investigation to the probabilistic and prophylactic standard that animates Section 7 of the Clayton Act.
That also means that in many instances we cannot map competition with enough precision to engage in reconstructive surgery to restore competition. As many of you know, for nearly two years, the
I am pleased to report that our remedies policy is working. We are seeing dramatically fewer illegal mergers, which benefits the public, conserves valuable resources and provides greater clarity and predictability to the business community.
We continue to see thousands of mergers per year. The difference now is that fewer deals present violations of the law.
I would like to conclude my remarks with a couple commitments. First, we are committed to carefully reviewing the comments on the draft as we work to issue the final guidelines.
Second, even as that happens, we remain deeply committed to promoting competition in the American economy. We are committed to protecting consumers from the harms of higher prices, lower quality, reduced choice, lower standards in healthcare and diminished innovation that result from lessened competition. We are similarly committed to protecting workers from the harms that result when they face too little competition for their labor. And we are committed to promoting, for all Americans, a dynamic and vibrant economy in which competitive markets drive innovation and opportunity. Those are core ingredients of a thriving democracy that we are duty bound to protect. It is the honor of my life to do that work with so many talented public servants at the
* * *
[1] See
[2] For example,
[3] See
[4] Comment from
[5] Comment from
[6] See
[7]
[8] See
[9] See
[10] See
[11] See Fed.
[12]
[13] See
[14]
[15] See
[16] The Wizard of oz (
[17] Fed.
[18] Fed.
* * *
Original text here: https://www.justice.gov/opa/speech/assistant-attorney-general-jonathan-kanter-delivers-remarks-2023-georgetown-antitrust
Insurance Brokerage Market Next Big Thing : Major Giants- Aon, Brown & Brown, Marsh &
AM Best Affirms Credit Ratings of Maxseguros EPM Ltd.
Advisor News
Annuity News
Health/Employee Benefits News
Life Insurance News