Merger relief vs. the consolidation regulators ignore

A federal court’s decision blocking a 2024 Federal Trade Commission’s expanded merger-disclosure rule is welcome. But its significance risks being overstated. Skirmishes over reporting requirements can distract from a more important shift: politics, not entrepreneurship, is now steering more and more of America’s large businesses.

The bipartisan politics surrounding the rule are instructive. FTC Chairman Andrew Ferguson supported the policy as a commissioner under President Biden. Administrative expansion often enjoys bipartisan durability, especially when framed as transparency, competition, or modernization.

Procedural restraint in one domain, here the court, may do little to alter the deeper consolidation dynamic.

If the ruling holds, companies may avoid at least one layer of regulatory dreck. But the larger structural problem remains untouched.

Merger review increasingly functions less as disclosure practice and more as political gatekeeping over voluntary private-sector combinations. Meanwhile, consolidation of a different sort advances largely unimpeded: the fusion of business and government through subsidies, procurement conditions, industrial policy, public-private partnerships, and stealth nationalizations. The pattern is visible across regimes built around semiconductor subsidies, broadband deployment mandates, and climate-linked conditionalities.

We are drifting toward a system in which large-scale coordination is not discouraged per se, only its private, voluntary forms. Colossal economic activity is tolerated, even encouraged, when routed through government partnerships, funding dependencies, and hybrid ownership structures. The path of least resistance increasingly runs through Washington rather than free enterprise.

This produces a subtle but consequential displacement of capitalism itself. Traditional mergers face “Mother-May-I” scrutiny, while business-government combines proceed under banners of resilience, equity, infrastructure, national competitiveness, or technological leadership, often accompanied by White House photo-ops under administrations of either party.

Seen this way, merger disclosure battles risk becoming marginal skirmishes within a larger expansion of government’ role in the economy. Even welcome rollbacks of reporting burdens, such as U.S. District Judge Jeremy Kernodle’s ruling, cannot counteract the gravitational pull of subsidy regimes, industrial steering, and semi-coercive partnership-driven “enterprise.”

Today’s principal fountains of regulation are no longer confined to the Federal Register, where freezes and rollbacks have been substantial. They arise from spending programs, contracting systems, guidance architectures, and hybrid public-private structures that reshape markets with the effects—though not the formal appearance—of traditional rules.

Blocking regulatory excess in merger disclosure is sound policy. But preserving competitive free enterprise requires confronting the deeper consolidation dynamic that regulators not only ignore, but perpetrate: the migration of economic decision-making from markets toward administratively managed arrangements.