Widely regarded as the least controversial of the five antitrust bills introduced in the House last week, the Merger Filing Fee Modernization Act would raise the filing fees for mergers valued at more than $1 billion and lower the fees for acquisitions valued less than $500,000. Additionally, it would direct extra money to antitrust enforcement at the Federal Trade Commission and the Department of Justice. A similar bill passed the Senate earlier this month.
Increasing of the cost of doing business and growing regulators’ budgets invites the expected criticisms from proponents of limited government and free enterprise. The increase in costs to merging companies will result in either higher costs for consumers or less productivity for the newly consolidated firm—or both. This is a transfer of wealth from private, productive hands to those of government bureaucrats.
The legislation seeks to increase antitrust regulatory activity; that’s an opportunity to consider the wisdom of antitrust enforcement in the first place.
Antitrust intervention suffers from the same problems classical liberal economists have long observed with other government interventions in markets. This includes the “knowledge problem.” Regulators do not have better information than market signals provide.
There are also public choice considerations created by antitrust interventions. Regulators with the power to promote their own preferred policy position will not always act objectively, especially because they will be subjected to intense lobbying from the regulated parties.
The mere threat of antitrust action carries threats to innovation. This is evident today in some politicians’ frustration with tech companies over content moderation, spilling over into urging regulators to pursue antitrust actions against those companies. Additionally, the looming threat of antitrust action may thwart innovative new business arrangements for fear of regulators denouncing what they do not yet understand.
Antitrust policy is more politicized than ever before; now is not the time to increase its costs and funding.