Getting Merger Guidelines Right

This paper is on the new (2023) Merger Guidelines. It makes several arguments: First, that the Guidelines should be understood as existing in a political equilibrium. Second, that the new structural presumption of the Merger Guidelines–HHI = 1,800—is too strict, and that an economically reasonable revision in the structural presumption would have increased rather than decreased the threshold. Whereas the new Guidelines lowers the threshold to HHI 1,800 from HHI 2,500, an economically reasonable revision would have increased the threshold to HHI 3,200. I justify this argument using a bare-bones model of Cournot competition. Third, it seems unlikely, as an empirical matter, that merger enforcement under the existing Guidelines is socially desirable. Fourth, that federal merger enforcement raises serious constitutional issues–which were originally discussed in 1904—and that it may be time now, in view of the new Guidelines, to return to these foundational constitutional questions.