On April 21, the Free State Foundation submitted comments to Federal Trade Commission and the Department of Justice in response to their Request for Information on Merger Enforcement. The comments were written by FSF President Randolph May, Senior Fellow Andrew Long, and Legal Fellow Andrew Magloughlin. FSF's comments recommend that the FTC retain a case-by-case merger review process that weighs the totality of the circumstances, including merger-specific efficiencies and other contextual factors such as market structure and dynamic innovation.
As predicted, that merger already has led to substantial pro-consumer efficiencies, including expedited deployment of next generation 5G service, network quality improvements, and continued downward pressure on prices. It also has confirmed the folly of relying on narrow market definitions in complex, dynamic markets. Indeed, that no consumer harm resulted is likely because, viewed through the appropriate lens – that is, the broader "broadband market" rather than the outdated mobile-only market – the T- Mobile/Sprint merger did not constitute a "4-to-3" merger as some alleged.
Additionally, FSF's comments stated that "any revised guidelines should not adopt presumptions of harm." As the comments explain:
There is no clear empirical evidence that vertical mergers are harmful on net. But there are numerous examples where predictions of harm have not materialized, including the AT&T/Time Warner, Comcast/NBC Universal, and AOL/Time Warner mergers, combinations with which Free State Foundation scholars are very familiar. The inaccuracy of those often overheated pre-merger prognostications of harm confirms that a case-by-case approach remains preferable to presumptions of harm for vertical mergers.
FSF's comments to the FTC and DOJ on merger enforcement is available here.
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