Merger Enforcement at the Federal Trade Commission in Three Presidential Administrations

• Author: Malcolm B. Coate
• Published date: 01 June 2000
• Date: 01 June 2000
• DOI: http://doi.org/10.1177/0003603X0004500204
• Subject Matter: Symposium: The Reagan/Bush Influences and Current Antitrust Policies

The Antitrust Bulletin/Summer 2000

Merger enforcement at the

Federal Trade Commission in

three presidential administrations

BY MALCOLM B. COATE*

I.

Introduction

323

The

last 15 to 20 years have seen the

rise

of

modern merger

enforcement.IInstead

of

searching the trade press for problematic

*Economist, Bureau of Economics, Federal Trade Commission.

AUTHOR'S NOTE: This article is based on nonpublic data obtained from

Federal Trade Commission internal files. The

Commission's

General

Counsel

has

authorized

publication

of

such data in

aggregated

form

under Commission Rule 4.11(g), 16 C. F. R. 4.11(g) (1997). The analyses

and

conclusions presented herein are those

of

the author

and

do not pur-

port to represent the views

of

the Commission. any individual Commis-

sioner, or the official position

of

any Commission Bureau. Jwould like to

thank Jeffrey Fischer, William Shughart

and

Mark Williams

for

helpful

comments on this article.

For a discussion of enforcement before and after the passage of

the Hart-Scott-Rodino Act, see, Sims &Herman, The Effect

of

Twenty

Years

of

Hart-Scott-Rodino on Merger Practice: A Case Study in the Law

of

Unintended Consequences Applied to Mergers, 65

ANTITRUST

L. J. 865

(1997) and Baer, Reflections on 20 years of Merger Enforcement Under

the Hart-Scott-Rodino Act, speech to the Conference Board, October 29,

©2000 by Federal Legal Publications, Inc.

324

The antitrust bulletin

mergers and then attempting to challenge the transactions with an

almost per se

concentration-based

argument,

the

enforcement

agencies have been able to review most significant transactions

under the Hart-Scott-Rodino (HSR) program and, if appropriate,

challenge the transaction with an analysis based on economic the-

ory as described in the Horizontal Merger Guidelines.?

This article presents an overview of merger enforcement at the

Federai Trade Commission (FTC) in three presidential administra-

tions, over two distinct merger waves.' The analysis starts with a

discussion

of

enforcement activity under the HSR program, with

summary data for the number

of

HSR filings, the number

of

"sec-

ond requests" related to horizontal competitive concerns, and the

outcomes

of

the various investigations. Some information on the

industries subject to the second requests is also presented. These

data offer insights into the evolution

of

the

FTC's

enforcement

agenda.

1996.

Settlements

in

pre-HSR

cases

were

particularly

problematic.

See,

for

example,

Elzinga,

The Antimerger Law: Pyrrhic Victories, 12 J. L. &

ECON.

43

(1969);

Rogowsky,

The Economic Effectiveness

of

Section 7

Relief, 31

ANTITRUST

BULL.

187 (1986);

and

Coate,

Winners

and

Losers in

the Settlement

of

Merger Litigation, in

THE

ECONOMICS

OF

THE

ANTITRUST

PROCESS

153 (Coate &

Kleit

eds., 1996).

U. S.

Department

of

Justice,

Merger

Guidelines,

Antitrust

&

Trade

Reg. Rep.

(BNA)

No. 1069

(June

17, 1982); U. S.

Department

of

Justice,

Merger

Guidelines,

Antitrust

&

Trade

Reg.

Rep.

(BNA)

No.

1169

(June

14, 1984); U. S.

Department

of

Justice

and

Federal

Trade

Commission, Horizontal Merger Guidelines,

Antitrust

&

Trade

Reg. Rep.

(BNA) No. 1559

(April

2, 1992)

and

U. S.

Department

of

Justice

and

Federal

Trade

Commisison,

Horizontal Merger Guidelines,

Antitrust

&

Trade Reg. Rep. (BNA) No. 1806 (April 10, 1997).

This

article presents

information

on

FTC

merger

enforcement

that

has appeared in the

academic

literature

over

the

1990s in a format more

available to the antitrust

community.

The

various

data

tables

and

analyses

are updated through 1996

and

new insights

are

included

when possible.

For

additional

details,

see

Coate,

Higgins

&

McChesney,

Bureaucracy

and Politics in FTC Merger Challenges, 33 J. L. &

ECON.

463

(1990);

Coate

&

McChesney,

Empirical Evidence on

FTC

Enforcement

of

the

Merger Guidelines, 30

ECON.

INQUIRY

277

(1992);

and

Coate,

Merger

Enforcement

at

the

Reagan/Bush

FTC,

in THE

ECONOMICS

OF

THE

ANTITRUST

PROCESS

(Coate

&Kleit eds., 1996).