The Biden administration wants to shake up the rules for how corporate giants get to merge, expand and squash competition.
The Justice Department and the Federal Trade Commission on Wednesday detailed a revised approach to corporate mergers, updating how markets are defined and expanding what regulators can consider when they approve or block deals.
"As markets and commercial realities change, it is vital that we adapt our law enforcement tools to keep pace so that we can protect competition in a manner that reflects the intricacies of our modern economy," Assistant Attorney General Jonathan Kanter said in a statement. "Simply put, competition today looks different than it did 50 — or even 15 — years ago."
The original merger guidelines were released in 1968, although there have been updates since. The Biden administration has worked on this version for the past couple of years.
It is part of a broader push by the administration to promote competition and limit what the White House sees as excessive consolidation. By appointing regulators like Kanter at the Department of Justice and FTC Chair Lina Khan, Biden has made it clear he wants to crack down on monopolies. Both Kanter and Khan have brought several strategic lawsuits against corporations to limit their market power.
"Capitalism without competition isn't capitalism; it's exploitation," Biden said when he signed an executive order to promote competition in the U.S. economy two years ago this month.
Administration's get-tough approach gets mixed results
The Department of Justice has brought several antitrust lawsuits against corporations, including a wide-reaching case against Google over allegations of monopolizing its advertising revenue. And the FTC is currently assessing a proposed $25 billion merger of Albertsons and Kroger, the country's two largest supermarket chains.
Not every case so far has been a success. Last week, an appeals court shot down the FTC's latest attempt to block the $69 billion purchase of videogame company Activision Blizzard by Microsoft, which makes Xbox gaming consoles. And in January, the agency lost a lawsuit against Facebook parent Meta over its acquisition of virtual reality company Within Unlimited.
In clarifying the merger guidelines, the regulators say they want to give judges more details on the law. During a briefing on Tuesday, a senior FTC official said the agency heard from judges that they've been frustrated and wanted more precision on the guidelines. Now, for the first time ever, the merger guidelines will include citations to actual cases.
The official emphasized the guidelines aren't new law, but clarify existing case law.
During the briefing, a senior Justice official said that it's important to recognize changes in the U.S. economy over the last several years. The idea is to look at how mergers and the concentration of power effect people on a daily basis.
Notably, the new guidelines directly address brand-new challenges: competition on tech platforms and studying not only how a merger could harm consumers but also workers.
The proposal also zeroes in on mergers that would not traditionally set off bells — because they are neither horizontal (combining two direct rivals), nor vertical (combining two non-rivals that provide different supply chain functions) — but still "may entrench or extend" one competitor's dominance.
"Unchecked consolidation threatens the free and fair markets upon which our economy is based," Attorney General Merrick Garland said in a statement. "These updated Merger Guidelines respond to modern market realities."
The Biden administration plans to mark the anniversary of the Promoting Competition executive order with a meeting of the president's "competition council" on Wednesday. Officials will tout efforts to reduce fees and improve customer service — often through jawboning and increased transparency rather than explicit government regulation.
The Department of Justice and FTC's new guidelines on mergers are yet to go into effect. They will first go through a 60-day public comment period that ends on Sept. 18. The agencies will then evaluate and update the draft before finalizing it.
NPR's Scott Horsley contributed to this report.
