MSCI Warns U.S. Policymakers Not To Inject Uncertainty Into Mergers Process

Since the late 1970s, federal antitrust policy has been guided by the consumer welfare standard and sound economic analysis. The United States also generally adopted a deregulatory approach to the market that embraced private-sector competition over a government-knows-best approach to picking winners and losers. The result has led to the unleashing of the modern U.S. economy, defined by the competition, innovation, and dynamism.

Injecting uncertainty into merger reviews or making mergers unduly difficult would harm consumers and U.S. competitiveness.

Unfortunately, U.S. antitrust regulators began the year by announcing plans to rewrite merger guidelines.

To address these efforts, on April 19 the Metals Service Center Institute, the U.S. Chamber of Commerce, and more than a dozen trade associations sent a letter to the U.S. Department of Justice and the Federal Trade Commission regarding federal merger reviews.

Broadly, the letter argued the federal government should not make mergers too difficult. The letter advised that “any revised guidelines should continue to recognize that most mergers promote competition” and that agencies should update the guidelines—not rewrite them—in an incremental fashion to build on their long and successful record of informing the courts, agencies, and business community.

The letter also argued, “Mergers drive capital formation, create efficiencies, reduce costs, and lead to innovative new products and services. They provide acquired companies with critical financing and allow acquiring companies to bring new products to consumers faster, better, and cheaper.”

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