Section of Antitrust Law comments on state and federal roles in merger enforcement

In response to the Antitrust Modernization Commission’s request for public comment concerning the dual state and federal roles in merger enforcement, the Section of Antitrust Law submitted written remarks in mid-October.

In its comments, the section stated that there is insufficient data to allow it to either recommend dramatic changes to the system of dual federal-state merger enforcement or to discount the criticisms of the system as it currently operates.

The section identified both benefits and costs of the current system of dual federal-state merger enforcement. Benefits include the ability of state attorneys general to act as a backup to federal merger enforcement, and the ability of the federal government to play a role in protecting local economies. The downside of dual enforcement includes delay and cost of duplicative review, the potential that a transaction will be subjected to a state investigation motivated more by political interests than competition interests, and the application of divergent enforcement approaches and remedies that could undermine the enforcement of sound antitrust principles.

The section recommended that the commission use its authority to collect data on the costs and benefits of dual enforcement, possibly focusing its data collection efforts on differences in remedies sought by federal and state enforcers, and the award of attorneys fees to state attorneys general in settlements. The section also recommended that the commission encourage state attorneys general through the Multistate Antitrust Task Force to increase the transparency of state merger enforcement.

The section also addressed the role of private parties in merger enforcement, finding that they play a limited role and that the commission should take no action to encourage or discourage change in the system.

The comments were submitted by the Section of Antitrust Law only and have not been approved by the House of Delegates or the Board of Governors of the ABA.

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