FTC-DOJ Proposed Merger Guidelines Threaten U.S. Economic Leadership and Startups

By SBE Council at 19 July, 2023, 4:32 pm

NEWS

For Immediate Release

Washington, D.C. – The Federal Trade Commission (FTC) and Department of Justice (DOJ) released newly proposed merger guidelines today, which the Small Business & Entrepreneurship Council (SBE Council) said would toss out a highly successful system that has fueled U.S. innovation, investment and our world-renowned startup ecosystem with a bewildering and arbitrary one that would snuff out U.S. economic leadership and a vibrant, opportunity-driven economy.

SBE Council president & CEO Karen Kerrigan:

“When reviewing the list of 13 guidelines, one walks away with the sense that FTC and DOJ ideologues want to stop merger and acquisition activity in its tracks. That will certainly be the case if these unworkable and irrational guidelines are implemented. FTC Chair Lina Khan and Attorney General Merrick Garland cite the need to ‘reflect the realities of how firms do business in the modern economy’ and ‘unchecked competition’ but their guidelines have no basis in reality. In fact, their parochial and archaic attitudes will take the country and economy backwards. Opportunity, competitive choices for consumers, economic growth and innovation will take a turn for the worse.”

Kerrigan noted that entrepreneurship and new business creation are flourishing, across all sectors, and that Khan and Garland need to get up-to-speed with the vast innovation and positive, disruptive activity that is being driven by entrepreneurs and startups.

“Millions of individuals and entrepreneurs are seeing opportunity in our economy by starting new businesses, but the FTC and DOJ see gloom and despair. Competition is flourishing and many new businesses and entrepreneurs have big dreams to vastly scale and take their innovations national or global. These startups and innovative businesses often partner and merge with larger companies to connect with the capital, resources and talent they need to scale and bring their innovations to the mass marketplace. It is hard to see how any, any small business or startup will have the opportunity to merge or be acquired given these proposed set of guidelines,” added Kerrigan.

SBE Council chief economist Raymond J. Keating observed:

“A key problem with antitrust interference in the economy in the hands of hyper-active regulators, such as the FTC’s Lina Khan, is that their very activism creates uncertainty in the market; eliminates or discourages mergers that could benefit consumers and the economy; and hurts entrepreneurial firms as investment is disincentivized due to very real concerns about mergers and acquisitions being disallowed due to the political assumptions of regulators. The FTC and DOJ draft merger guidelines fail to clarify the implementation of antitrust laws. Instead, these would further muddy the waters by making policy even more susceptible to the political whims and preferences of regulators trumping sound economics and what’s actually going on in the marketplace.”

SBE Council plans to file comments on the proposed guidelines and bring its concerns directly to Congress.

Related SBE Council content:

FTC Chair Lina Khan: Startup Spoiler, Small Business Insider, December 2022.

Collateral Damage in Khan’s FTC War on Big Business: Entrepreneurship, Innovation, and Consumers, Small Business Insider blog post, December 16, 2022.

The Future of U.S. Startups on Trial: FTC vs Meta Acquisition of Within, December 2022.

FTC’s Antitrust Crusade Against Microsoft Acquisition of Activision-Blizzard is No Game, Small Business Insider, January 11, 2023.

Innovation and Startup Ecosystem at Risk: Revamping the U.S. Regulatory Framework, Summary of SBE Council M&A Revamp Event.

Coalition Comments Opposing FTC’s Total Ban of Noncompete Agreements, March 2023.

FTC Comments Filed: “Business Practices of Cloud Computing” and Small Business June 2023.

CONTACT: 

Karen Kerrigan, kkerrigan@sbecouncil.org

Raymond Keating, rkeating@sbecouncil.org

SBE Council is a nonpartisan advocacy, research and education organization dedicated to protecting small business and promoting entrepreneurship. For nearly 30 years, SBE Council has worked on and advanced a range of private sector and public policy initiatives to strengthen the ecosystem for strong startup activity and small business growth.

Visit www.sbecouncil.org for additional information. Twitter: @SBECouncil

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