The American Antitrust Institute (AAI) has released a new paper setting out new a merger control policy and anticipating key reforms to come.
The paper, authored by John Kwoka, AAI advisor and Northeastern University‘s Neal F. Finnegan distinguished professor of economics, is entitled ‘Reviving Merger Control: A Comprehensive Plan for Reforming Policy and Practice.’ In Professor Kwoka’s new analysis, he frames a different view of recent developments in competition and antitrust. Many economists, policymakers, and others have come to argue that antitrust policy has in fact become too permissive, in particular allowing mergers and other practices that have resulted in significant increases in concentration and considerable harm to consumers. Greater concentration in the economy and weakening of competitive forces, is in part due to policy failures.
Professor Kwoka takes this point further and sets out a comprehensive programme of policy reforms necessary to remedy past weaknesses and failures and to restore the vitality of antitrust in protecting competition in the economy. Professor Kwoka suggests ah holistic approach with a fully comprehensive program comprising specific substantive and procedural reforms, which are integrated rather than a menu of alternative. His proposals are rooted in economic theory and empirical evidence. The common thread that runs through the proposals is that merger control policy and practice have moved away from the central mission of preserving competition in all the meanings of that term, and instead narrowly focused on certain types of mergers, certain types of adverse outcomes, and certain resolutions of competitive problems. This has resulted in tolerance of a large number of mergers that have proven to be anticompetitive, with adverse effects on consumers and businesses alike. This paper presents specific proposals, grounded in the evidence, necessary to restore merger control.