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The U.S. Department of Justice and the Federal Trade Commission recently updated their Horizontal Merger Guidelines,1 which build upon and replace the 1992 Guidelines.2 The revised Guidelines are the product of an extensive team effort at the Agencies that took place over roughly a year, under the leadership of Assistant Attorney General Christine Varney and FTC Chairman Jon Leibowitz. The process for revising the Guidelines was lengthy, collaborative, and open: the Agencies posted a series of questions, inviting public comment on possible revisions; numerous useful public comments were received and reviewed; the Agencies sponsored five public workshops at which panelists discussed possible revisions to the Guidelines; subsequently, the FTC made public a draft of the proposed Guidelines, again inviting additional public comments; numerous thoughtful comments were again received and reviewed; and in response to those comments, the proposed Guidelines were further clarified.3 Inevitably, however, many of the questions raised in the public comments submitted in response to the proposed Guidelines are not explicitly addressed in the final Guidelines. In this article, I respond to some of those questions, especially the questions pertaining to the economic principles underlying the revised Guidelines. I also elaborate in greater detail on some of the points made in the Guidelines themselves.4
I. HISTORICAL PERSPECTIVE: THE HEDGEHOG AND THE FOX
The 2010 Guidelines are best understood in historical context. They reflect the ongoing evolution of merger enforcement that has taken place since the DOJ first issued merger guidelines in 1968. The 2010 Guidelines rely heavily on earlier versions of the Guidelines, especially those released in 1982 and 1992, and on the 2006 Commentary on the Merger Guidelines. Many of the approaches in the 2010 Guidelines that some commentators have considered novel actually are contained in those earlier statements of merger enforcement policy.
Isaiah Berlin's famous allusion to the different ways in which the Hedgehog and the Fox view the world is a useful model for how to think about the evolution of the Merger Guidelines. The hedgehog knows one big thing.5 Likewise, the 1968 Guidelines were based on one big idea: horizontal mergers that increase market concentration inherently are likely to lessen competition.6 By today's standards, the 1968 Guidelines are rather shocking. For example, in...