Thursday, May 14, 2009
Posted by D. Daniel Sokol
Ilene Knable Gotts (Wachtell, Lipton) & James Rill (Howrey) have a great new piece on Reflections on Bush Administration M&A Antitrust Enforcement and Beyond.
ABSTRACT: The election of Barack Obama as President—and the culmination of the Bush Administration—mark an appropriate time to reflect on the Bush Administration’s legacy for Merger and Acquisition (“M&A”) antitrust enforcement. As noted below, the past eight years have seen impressive improvements in the merger review process, use of economics and reliance on evidence in merger analysis, and U.S. participation in international policy fora. Increased transparency has been an important element in achieving these objectives.
Nevertheless, charges have been made by some antitrust economists and practitioners that federal antitrust enforcement has been lax during the Bush Administration. The record, however, critics rely upon is far from clear, particularly given the complexities in trying to make those comparisons. Paradoxically, while attacking the agencies for under-enforcement, the critics point to a poor track record in court to suggest that “anything goes” on the merger front. Perceptions of enforcement level can be skewed by a few high-profile decisions by the enforcement agencies not to challenge a merger as well as a limited set of court decisions that were highly fact-specific and of marginal bearing for future jurisprudence. Moreover, such perceptions are often lagging indicators of present or future outcomes.
This article will describe some of the achievements during the past eight years that the new antitrust leadership can build upon. We will also discuss the perception of lax enforcement, as well as what we believe is the actual status quo, as a basis for forecasting what future enforcement policy might be. Finally, this article recommends some changes the new administration can undertake that would increase the efficiency and efficacy of merger enforcement.