Biden Administration Takes Extreme Approach Toward Corporate Mergers

Jeff Zymeri of National Review Online reports on the Biden administration’s new approach toward corporate mergers.

The Biden administration’s antitrust regulators doubled down on their skepticism of corporate mergers Wednesday, with critics arguing that the administration is doing away with a bipartisan, consumer-centric approach in favor of one that boils down to the maxim: “Big is bad.”

In a 51-page document released by the Federal Trade Commission (FTC) and the Department of Justice, the regulators adopted guidelines for reviewing mergers both in the tech sector and across the economy. FTC chair Lina Khan and the DOJ’s Jonathan Kanter are spearheading the effort despite their dismal track record challenging mergers up to this point.

Last week, the FTC lost its effort to block Microsoft’s takeover of video-game company Activision. Earlier this year, the agency lost in its effort to block Meta from acquiring a virtual-reality startup. However, Kanter has had more success than Khan, stopping Penguin Random House’s acquisition of fellow book giant Simon & Schuster. Politico reported that the DOJ adopted a novel theory centered on labor more than competition, focusing on the financial injuries authors might suffer from losing a buyer for their books.

Robert Bork Jr. of the Antitrust Education Project said in response to the news that the administration is persisting in its pursuit of “radical reforms” to antitrust, but added that courts are still likely to remain skeptical of the administration’s approach.

Bork previously explained in the Wall Street Journal that Biden and Khan “are executing a campaign to undo the consumer-welfare standard and replace it with a full-on effort to regulate pharmaceuticals, healthcare, agriculture, telecom, technology and manufacturing.”

Under the standard, antitrust actions should be judged by their effects on product prices and quality, not their effects on market structure. Bork’s father, an ex-federal judge and nominee to the Supreme Court, pioneered the approach under which big is not necessarily bad.