The FTC Is Now Trying to Stop Mergers Before They Start

While rules do need to be updated every so often, the current draft is ideological overkill.

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Lina Khan’s antitrust crusade is not confined to the courts. The Federal Trade Commission (FTC) chair has turned her attention to a nearly 50-year-old law about merger approvals. That law, the Hart-Scott-Rodino (HSR) Act of 1976, requires companies to file with the FTC and the Justice Department’s Antitrust Division when their planned mergers are above a certain size. The agencies can approve the transaction or request additional information, which sometimes leads to a formal challenge of a proposed deal.

Those HSR rules get updated every so often to adjust the size thresholds, along with other minor changes. But the most recent proposed updates, which Khan published in June of this year, go much further. Giving regulators better information to work with is defensible, but Khan’s goal is different. She is ideologically opposed to mergers, and she wants to discourage them by making the process so burdensome that many companies will not bother with it.

We recently filed comments exposing serious problems with the proposed new HSR rules. Those problems deserve more public attention.

The additional regulatory burden alone would cost more than the FTC and Justice Department’s combined 2023 antitrust budgets, according to former law professor Gus Hurwitz. And as the FTC increases the amount of paperwork to be submitted, the time it takes for the agencies to review initial HSR filings will increase as well. All this extra attention to pre-merger filings would take away resources from other agency priorities, such as litigation and consumer protection. The costs to the private sector would be even larger.

Read the full article on the National Review.