Has a merger in your industry affected you as a supplier, independent business owner, or creative? Has your company been acquired?

If a merger or acquisition has impacted your business, the Department of Justice and Federal Trade Commission want to hear from you! And so do we at Access to Markets.

You don’t need to be a policy expert — you just need to share your story. 

“Here is our message to the entire American People: Please share your views. We need your input, and we absolutely care what you think.” — Jonathan Kanter, Assistant Attorney General of Antitrust, Department of Justice

Read more about how you can help below.

A MAJOR ANNOUNCEMENT FROM THE FTC AND DOJ

On January 17, the Federal Trade Commission (FTC) and the U.S. Department of Justice (DOJ) announced that they are reviewing — and intend to update — the federal merger guidelines.

Merger guidelines lay out the antitrust agencies’ approach and policy toward mergers — how mergers should be assessed, investigated, and potentially blocked. The guidelines reflect the agencies’ interpretation of the law and help businesses plan. Courts often cite the merger guidelines as persuasive authorities on what antitrust law says.

WHY IT MATTERS

The first merger guidelines were created in 1968, and they were fairly strict. But in 1982, under the Reagan Administration, those guidelines were relaxed. The last substantive change to the guidelines was in 2010, and since then, market conditions have changed significantly. By creating new merger guidelines, the FTC and DOJ are building on their efforts to restore the agencies’ ability to combat one of the biggest avenues of corporate consolidation: mergers & acquisitions.

Their work also echoes efforts at the White House to combat mergers. President Biden said that his July 2021 Executive Order on Competition, “Commits the federal government to full and aggressive enforcement of our antitrust laws. No more tolerance for abusive actions by monopolies. No more bad mergers that lead to mass layoffs, higher prices, fewer options for workers and consumers alike.”

MERGER MANIA

2021 was an eye-popping, record year for mergers and acquisitions in the US and globally. Merger activity reached an all-time high of $5.8 trillion in 2021. Private equity spent more than $1 trillion on deals over the course of the year—up 110 percent compared to 2020. Banks announced a larger total deal value in mergers and acquisitions in the first half of 2021 than in all of 2020. Mega-mergers have also increased, including examples like the recent announcement that Microsoft wants to buy the gaming company Activision.

Merger policy since the 1980s has been very permissive, with both Republican and Democratic administrations hardly blocking any mergers at all (more info on this in our paper, The Courage to Learn). Mergers in industries as diverse as entertainment, defense, and rental cars, have led to consolidation at historic levels. Some of the more visible mega deals in recent years include: Ticketmaster-Live Nation, Google-DoubleClick, Northrop-ATK, Facebook-Instagram, CVS-Caremark-Aetna, Hertz-Dollar, American-U.S. Airways, Disney-Fox, etc, etc.

But many more mergers go unnoticed, despite evidence that mergers contribute to higher prices for consumers, a loss of jobs, and even lower wages for workers. Over the last 25 years, 75% of industries have gotten more concentrated, largely because of mergers.

WHAT YOU CAN DO

• File a public comment (can be anonymous) with the FTC — the first comment period is open until March 21.
  • The FTC and DOJ have emphasized that they want to hear directly from business owners, entrepreneurs, innovators, workers, and other diverse stakeholders who are impacted by merger policy, yet have historically been shut out of agency discussions. And with big companies employing teams of lobbyists, communications people, and economists to paint merger-friendly narratives, your voice is incredibly important. 
  • Questions you can consider when submitting a post:
    • Do you feel the terms of your acquisition were fair? Were any power asymmetries exploited in the deal?
    • Was there a misalignment of values between the acquiring firm and your firm? How did that play out post-merger?
    • If your company was acquired, was the innovation commercialized? Was it shelved?
    • Did your product or service improve post-merger/acquisition? Did the price of your product or service increase or decrease post-merger/acquisition?
    • Even if your firm wasn’t acquired, did an industry merger or acquisition make it harder for your business to compete? 

• Reach out to Denise Hearn and Nidhi Hegde, co-leads of our Access to Markets initiative, to share how a merger has impacted you. We are compiling a list of people who are willing to share their stories directly with lawmakers in the future.

Note: Reviewing and updating merger guidelines is NOT about preventing your small or medium-sized business from selling itself, but is a way to ensure that markets are fair and competitive, so you have even more compelling options if selling is something you’re considering in the future.

WHAT HAPPENS NEXT

Following this initial public consultation period, the FTC and the DOJ will issue a draft of updated merger guidelines for further review. They will then start another round of public engagement/public comments before finalizing the new guidelines by the end of 2022.