The Federal Trade Commission (FTC) and the Antitrust Section of the Department of Justice (DoJ) have launched a public consultation (pdf) to update the M&A Guidelines. Chance of the calendar, this desire to update to meet the challenges of digital markets was launched on January 18, the day of the announcement of the acquisition of Activision Blizzard by Microsoft for 68.7 billion dollars.
US antitrust facing the new challenges of the digital economy
” This investigation launched by the FTC and the DOJ aims to ensure that our merger guidelines accurately reflect the realities of the modern market and to equip us to strongly enforce the law against illegal agreements. as stated by Lina Khan, President of the FTC.
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This modernization is officially aimed at all markets. In the series of questions submitted for public opinion, the digital market nevertheless appears to be an obvious target.
The revision of the rules of the two agencies must lead to better consideration of various consequences of a monopoly on the American economy. Until now, the central element in characterizing a dominant market position in the United States has been to assess its impact on the evolution of prices for consumers.
Digital services, often ill-defined and partially free, easily manage to pass between the rules of the American antitrust. To succeed in blocking them, the FTC and the DoJ want to take into account the effect of a monopoly on the labor market, innovation, product quality, the accumulation of data, the dual status of advertisers and consumers of certain platforms, etc.
The FTC and the DoJ want to avoid any hint of bias
For TechCrunch the draft revision is already partly written. With cynicism, the American media believes that the choice of a public consultation aims to avoid accusations of conflicts of interest thanks to popular support. Lina Khan is known for her work on Amazon Monopoly before her appointment to the FTC. Amazon and Facebook are already trying to squeeze him out of business that concerns them. Jonathan Kanter, assistant attorney general at the head of antitrust at the DoJ, has, for his part, studied the Google case at length.
Lina Khan and Jonathan Kanter are part of the Biden administration’s dream team to better control the American digital giants. The balance sheet of the American president is however fragile, believes Gizmodo. A mostly symbolic executive order to give more power to the FTC and the DoJ and a revision of their guidelines on vertical mergers, from desktop software to video games, for example, did not yield much results.
The difficult mission of the two antitrust agencies
The economic context is not favorable to the two American agencies. 2021 was marked by more than 1047 merger deals of at least $100 million. Twice as many requests as over the past five years. More than the FTC can handle. The agency has warned that it could go back to mergers already executed because it is so overwhelmed.
American justice itself is a brake on taking strict measures against the monopolistic practices of large companies. By conservatism, the American judges tend to privilege the argument, exceeded, of the price in their decisions. It is precisely up to the courts to block or not a merger deemed reprehensible by the FTC and the DoJ.
The two agencies have a long way to go before they can effectively oppose the practices of the digital giants. For the revision of their directives, the public consultation will take sixty days. A preliminary version of the new lines will again be submitted for public comment. The FTC and DoJ hope they will come into force by the end of 2022.