1 

UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION

WASHINGTON, DC 20580 

Prepared Remarks of 

Bilal Sayyed, 

Director, Office of Policy Planning, 

Federal Trade Commission

September 10, 2019

Georgetown University Law Center

 

Before beginning, I note that my remarks do not necessarily reflect the policy or views of 

the Commission or of any individual Commissioner. 

A revolution in antitrust and consumer protection law began fifty years ago. The 

foundation of that revolution was the recommendation of President Johnson’s Task Force on 

Antitrust Policy (the “Neal Report”) that the antitrust laws be used and strengthened to effect a 

significant restructuring of the American economy. The Neal Report, completed in July 1968 and 

made public in May 1969, found that “highly concentrated industries represent a significant 

segment of the American economy.”1

 

In support of “effective antitrust,” the Neal Report recommended legislation to give 

antitrust enforcement authorities a “clear mandate to use established techniques of divestiture to 

reduce concentration in industries where monopoly power is shared by a few very large firms.”2

 

The Neal Report also recommended legislation that would prohibit mergers in which a “very 

 

1

 PHIL C. NEAL ET AL., WHITE HOUSE TASK FORCE REPORT ON ANTITRUST POLICY 3 (1969) [hereinafter 1969 NEAL 

REPORT], reprinted in 411 ANTITRUST & TRADE REGULATION REPORT (May 27, 1969) (Special Supplement). 

President Nixon appointed a task force in 1969 to do a study of the same issue. The report of that task force came to 

significantly different conclusions from those reached by the Johnson Task Force. See GEORGE J. STIGLER ET AL.,

REPORT OF THE TASK FORCE ON PRODUCTIVITY AND COMPETITION (1969), reprinted in 413 ANTITRUST & TRADE 

REGULATION REPORT X-1 (June 10, 1969). 2 1969 NEAL REPORT, supra note 1, at 3.
2 

large firm acquires one of the leading firms in a concentrated industry.”3

 The task force 

recognized that the primary impact of the legislation would be on “diversification” or 

“conglomerate” mergers and explained that the basis for this recommendation was their 

understanding that Section 7 of the Clayton Act was not effective against mergers where the 

detection of adverse effects would depend on “factual and theoretical judgments” that “are 

highly speculative.”4 

The spark of the revolution was two reports that concluded that the FTC was failing in its 

mission to protect consumers and maintain competitive markets. The NADER REPORT ON THE 

FEDERAL TRADE COMMISSION,

5 the summer work project of a small handful of law students, 

criticized the Commission’s consumer protection program. Although some practitioners and 

agency officials found the report’s findings unfair, they also recognized the criticisms as 

“nothing new.”6 

The Kirkpatrick Report—more formally the 1969 REPORT OF THE AMERICAN BAR 

ASSOCIATION COMMISSION TO STUDY THE FEDERAL TRADE COMMISSION, published fifty years 

ago this coming Sunday, September 15, heavily criticized the FTC’s application of its antitrust 

and consumer protection authority.

7 It found that the agency largely pursued trivial matters, and, 

absent a radical change and significant redirection, believed Congressional action to shutter and 

replace the agency would be appropriate.8

 

3 Id.

4 Id. 

5 See EDWARD F. COX ET AL., “THE NADER REPORT” ON THE FEDERAL TRADE COMMISSION (1969). 6 Panel At Advertising Meeting Agrees Attack By Nader Associates Says “Nothing New,” 398 ANTITRUST & TRADE 

REGULATION REPORT, Feb. 25, 1969, at A-5-6. 7 See MILES W. KIRKPATRICK ET AL, REPORT OF THE ABA COMMISSION TO STUDY THE FEDERAL TRADE 

COMMISSION (1969) [hereinafter KIRKPATRICK REPORT], reprinted in 427 ANTITRUST & TRADE REGULATION 

REPORT (Sept. 16, 1969) (Special Supplement); see also Richard A. Posner, The Federal Trade Commission, 37 U.

CHI. L. REV. 47 (1969-70). 8 The Kirkpatrick Report described the work of the Bureau of Economics as “of substantial value.” KIRKPATRICK 

REPORT, supra note 7, at 2.
3

In response, the FTC began a decade-long effort to deconcentrate significant sectors of 

the U.S. economy, and to expand significantly its industrywide consumer protection trade

regulation rules. Bill Kovacic identifies a partial list of the firms and industries caught up in the 

FTC’s monopolization and attempted monopolization claims and industry restructuring efforts: 

Exxon, Mobil, Chevron, Amoco, Gulf, Atlantic Richfield, Shell, Texaco; Borden, 

Coca-Cola, Pepsi-Cola, Crush, Seven-Up; IT&T, General Foods, Kellogg, 

General Mills, Sunkist; the American Medical Association; Levi Strauss; Boise 

Cascade, Weyerhaeuser; General Motors; Boeing, Lockheed, McDonnell 

Douglas; Xerox; Hertz, Avis, and National Car Rental.9

Further, in response to the ABA and Nader reports’ questions concerning the FTC’s vigor and 

utility, the agency initiated a significant rule-making effort and completed six major consumer

protection trade-regulation rules between 1969 and 1977 (and had an additional 16 such rules 

pending in the period 1973-1976).

10 The appointment of Michael Pertschuk as Chairman in 1977 

added a boost to the FTC’s expansive use of its antitrust and consumer protection authority. 

Chairman Pertschuk wanted to use the Commission’s authority to restructure the economy “into 

line with the nation’s democratic political and social ideals” on issues such as “social and 

environmental harms,” including “resource depletion, energy waste, environmental 

contamination, worker alienation, and the psychological and social consequences of marketingstimulated demands.”11 He called for the new sources of professional expertise – such as tax 

policy and planning, business planning, marketing science, sociology, psychology, history, and 

 9 William E. Kovacic, “Competition Policy in Its Broadest Sense:” Michael Pertschuk’s Chairmanship of the 

Federal Trade Commission 1977-1981, 60 WM. & MARY L. REV. 1269, 1287 (2019). 10 Id. at 1289–91. For a complete list of rulemakings during the 1970s, see William MacLeod et al., Three Rules and 

a Constitution: Consumer Protection Finds its Limits in Competition Policy, 72 ANTITRUST L.J. 943, 953 & n.57 

(2005). 

11 Kovacic, supra note 9, at 1294–95 (quoting Michael Pertschuk, Chairman, Fed. Trade Comm’n, New Directions 

for the FTC, Remarks Before the Eleventh New England Antitrust Conference (Nov. 18, 1977), reprinted in 840 

ANTITRUST & TRADE REGULATION REPORT F-1 (Nov. 24, 1977). 
4

political science—to help formulate competition policy, and anticipated the expansive use of the 

“actual potential competition theory in future cases.”12 

By the early 1980s, the revolution had run its course, with the agency having very little to 

show for its efforts to restructure the U.S. economy and better oversee consumers’ and firms’

market interactions. Starting with the Reagan administration, the FTC, across politically different 

administrations, has pursued sharply more defined and restrained antitrust and consumer 

protection missions.

13

Today there is a strong body of opinion that challenges the enforcement choices and 

performance of the Commission and the Department of Justice of the last 20-40 years—

Republican and Democratic administrations both. Advocates call for a program of antitrust 

enforcement that would, among other things: 

(i) more aggressively investigate, challenge, and reverse the conduct and transactions 

of significant and otherwise successful tech firms;14

(ii) undertake a review and restructuring of the investment choices of the multitrillion-dollar investment industry;15

(iii) substantially increase legal challenges to vertical integration by acquisition,16 and 

break-up or prevent certain firms from being both vertically integrated and a 

supplier of services to competitors;17

 12 Id. at F-1, F-2. 13 See THE REGULATORY REVOLUTION AT THE FTC: A THIRTY-YEAR PERSPECTIVE ON COMPETITION AND 

CONSUMER PROTECTION (James Campbell Cooper ed., 2013). 14 See, e.g., A Better Deal – Crack Down on Corporate Monopolies & the Abuse of Economic and Political Power, 

HOUSE DEMOCRATS [hereinafter A Better Deal, HOUSE DEMOCRATS], https://abetterdeal.democraticleader.gov/theproposals/crack-down-on-abuse-of-power/ (last visited Sept. 10, 2019); Diana L. Moss, American Antitrust Inst., 

The Record of Weak U.S. Merger Enforcement in Big Tech (July 8, 2019), https://www.antitrustinstitute.org/wpcontent/uploads/2019/07/Merger-Enforcement_Big-Tech_7.8.19.pdf. 15 See, e.g., Fiona Scott Morton & Herbert Hovenkamp, Horizontal Shareholding and Antitrust Policy, 127 YALE 

L.J. 2026 (2018); Eric A. Posner, Fiona Scott Morton, & E. Glen Weyl, A Proposal to Limit the Anti-Competitive 

Power of Institutional Investors, 81 ANTITRUST L.J. 669 (2017); Einer Elhauge, Horizontal Shareholding, 129 

HARV. L. REV. 1267 (2016).
5

(iv) evaluate much more closely, or in some cases bar, the acquisition of relatively 

small but growing firms on the speculative concern that such acquisitions may 

eliminate unique and significant competitive threats to the acquiring firm;18

(v) address concerns about economic mobility, and about income and wealth 

disparities, through the prohibition of firm expansion, organically or through 

acquisition;19

(vi) limit the amount of personal information collected and retained by firms;20 and,

(vii) recognize and remediate the alleged power of large corporations to shape

legislation, regulation, and political outcomes.21

If you are familiar with our hearings, you know we sought comment on whether current antitrust 

and consumer protection law and doctrine could put such a program into force, and how best to 

enforce antitrust law in response to concerns over novel forms of anticompetitive conduct, 

anticompetitive transactions, and the allegedly diminished competitiveness of U.S. markets. 

If we are to revisit issues from four and five decades ago, it seemed sensible to determine 

what we could learn from that experience. In the footnotes, I cite to published works of Bill 

 16 See, e.g., Steven C. Salop, Invigorating Vertical Merger Enforcement, 127 YALE. L.J. 1962 (2018); Senator 

Elizabeth Warren, Reigniting Competition in the American Economy at 6 (Jun. 29, 2016), 

https://www.warren.senate.gov/files/documents/2016-6-29_Warren_Antitrust_Speech.pdf (calling for an update of 

the 1984 vertical merger guidelines). 17 Elizabeth Warren, How We Can Break Up Big Tech, MEDIUM (Mar. 8, 2019),

https://medium.com/@teamwarren/heres-how-we-can-break-up-big-tech-9ad9e0da324c. 18 See, e.g., Carl Shapiro, Protecting Competition in the American Economy: Merger Control, Tech Titans, Labor 

Markets, 33 J. ECON. PERSP. 69, 78 (2019); Moss, supra note 14, at 7; Press Release, Open Markets Institute 

Calls on the FTC to Block All Facebook Acquisitions (Nov. 1, 2017), 

https://openmarketsinstitute.org/releases/open-markets-institute-calls-on-the-ftc-to-block-all-facebook-acquisitions/. 19 See, e.g., JOSEPH E. STIGLITZ, THE PRICE OF INEQUALITY: HOW TODAY’S DIVIDED SOCIETY ENDANGERS OUR

FUTURE 44-45 (2012); Jonathan B. Baker & Steven C. Salop, Antitrust, Competition Policy, and Inequality, 104 

GEO. L.J. ONLINE 1 (2015). 20 See, e.g., Allen P. Grunes & Maurice E. Stucke, No Mistake About It: The Important Role of Antitrust in the Era 

of Big Data, ANTITRUST SOURCE, Apr. 2015. 21 See, e.g., A Better Deal, HOUSE DEMOCRATS, supra note 14; JONATHAN B. BAKER, THE ANTITRUST PARADIGM:

RESTORING A COMPETITIVE ECONOMY 55 (2019).
6

Kovacic,22 Tim Muris,23 Bob Pitofsky24—all former Chairmen—and Robert Katzmann,25 now 

Chief Judge of the U.S. Court of Appeals for the Second Circuit. Those writings recount the 

history of, and analyze, the FTC’s activities during the 1970s. A review of those works, and 

some others—including the 1980 Report of the ABA Section of Antitrust Law Concerning 

Federal Trade Commission Structures, Powers and Procedures—was instructive.26 

What stood out was not the breadth of the FTC actions but the nearly unanimous 

agreement that the agency embarked upon its efforts to reshape whole industries without a clear 

framework to guide what it was looking for and how it would analyze what it found. For 

example, Bob Pitofsky concluded that “[i]ndustry-wide investigations and cases were initiated 

under section 2 with no clear theory of what constituted monopolizing behavior.”27 Jim Liebeler, 

a former head of the FTC’s Office of Policy Planning and Evaluation, wrote similarly: “[M]ost 

industry-wide matters have been instituted without any clear articulation of a theory of how 

successful prosecution of the case will improve economic welfare.”28 Such conclusions are 

common to the literature evaluating the FTC’s antitrust and consumer protection program in the 

1970s.29

 22 See Kovacic, supra note 9; William E. Kovacic, The Modern Evolution of U.S. Competition

Policy Enforcement Norms, 71 ANTITRUST L. J. 377 (2003); William E. Kovacic, Failed Expectations: The Troubled 

Past and Uncertain Future of the Sherman Act as a Tool for Deconcentration, 74 IOWA L. REV. 1105 (1989); 

William E. Kovacic, The Federal Trade Commission and Congressional Oversight of Antitrust Enforcement, 17 

TULSA L. REV. 587 (1982). 23 See THE FEDERAL TRADE COMMISSION SINCE 1970: ECONOMIC REGULATION AND BUREAUCRATIC BEHAVIOR

(Kenneth W. Clarkson & Timothy J. Muris eds., 1981) [hereinafter FTC SINCE 1970]; Timothy J. Muris, Chairman, 

Fed. Trade Comm’n, Looking Forward: The Federal Trade Commission and the Future Development of U.S. Competition 

Policy, Remarks before the Milton Handler Annual Antitrust Review (Dec. 10, 2002). 24 See Robert Pitofsky, Does Antitrust Have a Future? 76 GEO. L. J. 321 (1987). 25 See ROBERT A. KATZMANN, REGULATORY BUREAUCRACY: THE FEDERAL TRADE COMMISSION AND ANTITRUST 

POLICY (1980). 26 See Report Of The Section Concerning Federal Trade Commission Structures, Powers, And Procedures, 49 

ANTITRUST L.J. 323 (1980). 27 Pitofsky, supra note 24, at 324 (emphasis added). 28 Wesley J. Liebeler, Bureau of Competition: Antitrust Enforcement Activities in FTC SINCE 1970, 65, 72-73.

29 See, e.g., the materials cited, supra, notes 22-24. 
7

Some are advancing a new narrative—that the antitrust challenges of the 1970s, while not 

successful, were important to changing the behavior of the targeted firms such that new firms 

could enter and make markets more competitive. An example of this is Professor Tim Wu’s 

discussion of the Department of Justice’s unsuccessful thirteen-year prosecution of antitrust 

claims against IBM. In Professor Wu’s view, that case changed IBM’s behavior sufficiently to 

allow the entry of new firms into its markets, thus accomplishing what a successful prosecution 

would have achieved.

30 As a rationale for the filing of an antitrust complaint, this strikes me as 

an abuse of prosecutorial power. I think if it came from someone other than the always amiable 

and provocative Professor Wu, we would immediately recognize it as a highly problematic 

rationale for initiating and continuing an investigation. 

Proceeding as such today—without a clear theory, without an articulation of a theory—is

inconsistent with stewardship of the Commission’s resources and contrary to the public good. It 

is neither good government nor good enforcement policy and raises the concern that more 

fruitful enforcement opportunities would be lost through such misallocation of Commission 

resources. 

The antitrust law enforcement entities—the Commission, the Department of Justice, and 

the states—may be at the early stage of a series of significant single-firm conduct investigations.

There is also Congressional interest in revamping existing antitrust law to accomplish both the 

de-concentration goals of the 1960s and 1970s and broader current societal and political 

objectives.31 

 30 See Tim Wu, Tech Dominance and the Policeman at the Elbow (Columbia Public Law Research Paper No. 14-

623), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3342598. 31 See, e.g., A Better Deal, HOUSE DEMOCRATS, supra note 14; Designing Accounting Safeguards to Help Broaden 

Oversight And Regulations on Data (DASHBOARD) Act, S. 1951, 116th Cong. (2019) (sponsored by Senators 

Mark Warner (D-VA) and Josh Hawley (R-MO)); Merger Enforcement Improvement Act, S. 306, 116th Cong. 

(2019) (sponsored by Senator Klobuchar (D-MN)); Consolidation Prevention and Competition Promotion Act, S. 

307, 116th Cong. (2019) (sponsored by Senator Klobuchar (D-MN)). 
8

Given this, it seemed to us that the most beneficial next step in our Competition and 

Consumer Protection Hearings is the articulation and publication of a clear analytical framework 

for the evaluation of: 

(i) unilateral conduct by allegedly dominant technology platforms; 

(ii) vertical integration through acquisition or merger; 

(iii) certain horizontal merger transactions; 

(iv) whether common ownership has demonstrably anticompetitive effects; 

(v) the authority of the FTC, and the limitations on that authority, to identify and 

prohibit or remedy anticompetitive and unfair or deceptive acts or practices within 

the broadband industry; and,

(vi) the consumer welfare standard—and alternatives to the consumer welfare 

standard—as organizing principle of antitrust analysis. 

This effort will help us identify areas where the case law could be clarified or improved to allow 

for more certain and successful challenge to unfair, anticompetitive conduct. The Commission 

can achieve that clarification or improvement through its own case selection and amicus 

participation—the development of the common law—or through a request or support for 

legislative action. It may also strengthen the basis and direction of ongoing or future 

investigations of dominant firm conduct or anticompetitive mergers, through the development of 

the case law and agency practice. 

Our models for this type of output are the Guidelines and Commentary the agencies have 

periodically issued (and updated) in the areas of horizontal mergers, competitor collaborations, 

and intellectual property rights, and statements the Commission has issued with respect to its 

application of Section 5. 
9

In addition, the Office of Policy Planning, in conjunction with the Bureau of Economics, 

is reviewing the economic literature that supports some of the arguments for a more expansive 

and structure-based antitrust enforcement regime.32 Our intention is to advise on whether this 

research provides sufficient or strong support for a significantly broader commitment of 

resources to antitrust enforcement in general and to certain industries or practices in particular.

In that spirit, here is what we are working on.

Our highest priority is to complete and release a guidance document on the application of 

the antitrust laws to conduct by technology platforms. These guidelines will be similar in form, 

structure, and purpose to the Competitor Collaboration Guidelines.33 If we are successful, this 

document will identify an analytic framework for identifying, evaluating and remedying conduct 

by dominant technology platform companies. It will help the Commission and interested parties

to understand better whether there are limitations in antitrust law that prevent the agencies from 

prohibiting or successfully remedying anticompetitive or unfair conduct. 

It will support, if appropriate, efforts by the Commission to develop the law through case 

selection and amicus participation. The executive and legislative branches may find this 

document helpful as each considers whether new laws or new regulations are appropriate and 

necessary with respect to single-firm conduct by large tech platforms in order to maintain or 

create competitive markets. The hurdle, of course, is whether we can articulate a framework for 

evaluating single-firm conduct in this area, in the same way the Competitor Collaboration 

Guidelines were successful in doing so for competitor collaborations. 

 32 This literature is surveyed in Chad Syverson, Macroeconomics and Market Power: Facts, Potential Explanations, 

and Open Questions, Brookings Institution, Jan. 2019; Susanto Basu, Are Price-Cost Markups Rising in the United

States? A Discussion of the Evidence;" 33 J. ECON. PERSP. 3 (2019); Chad Syverson, Macroeconomics and Market

Power: Context, Implications, and Open Questions, 33 J. ECON. PERSP. 23 (2019); Steven Berry et al., Do

Increasing Markups Matter? Lessons from Empirical Industrial Organization, 33 J. ECON. PERSP. 44 (2019). 33 See FED. TRADE COMM’N & U.S. DEP’T OF JUSTICE, ANTITRUST GUIDELINES FOR COLLABORATIONS AMONG 

COMPETITORS (2000), https://www.ftc.gov/sites/default/files/documents/public_events/joint-venture-hearingsantitrust-guidelines-collaboration-among-competitors/ftcdojguidelines-2.pdf. 
10

We did hear some concern that we do not have much experience applying the antitrust 

laws to platforms. I think that is incorrect. Two-sided markets are not new to antitrust. And, there 

are significant guideposts in Sherman Act Section 2 and FTC Act Section 5 law that we can 

apply. The document will also discuss the application of Sherman Act Section 1. 

We also heard that if we did not advance, or even affirmatively dismissed, a particular 

theory of harm or interpretation of law in the guidance document, then that might make it more 

difficult to advance that theory or interpretation even if it would be helpful to prosecution of a 

particular enforcement action. This is a legitimate concern in the abstract. But open-ended law 

enforcement or application of vague or speculative theories is not good practice; this, I think, is 

what professors Pitofsky and Liebeler were in part referring to in the quotes I referenced earlier. 

The collective intellectual effort to define a framework and the manner in which that framework 

may be applied will strengthen our investigation and prosecution of conduct and transaction 

claims. 

The contemplated guidance document is an enforcement document. It will support the 

immediate and long-term enforcement efforts of the Commission. In this respect, it will have a 

similar purpose as the Horizontal Merger Guidelines,34 the Intellectual Property Guidelines,35

and the Competitor Collaboration Guidelines.

36 Each of those documents: (i) state the federal 

antitrust agencies’ enforcement intentions, (ii) lay out an analytic framework without fixing, as 

 34 See U.S. DEP’T OF JUSTICE & FED. TRADE COMM’N, HORIZONTAL MERGER GUIDELINES (2010), 

https://www.ftc.gov/sites/default/files/attachments/merger-review/100819hmg.pdf [hereinafter 2010 HORIZONTAL 

MERGER GUIDELINES]. 35 See U.S. DEP’T OF JUSTICE & FED. TRADE COMM’N, ANTITRUST GUIDELINES FOR THE LICENSING OF 

INTELLECTUAL PROPERTY (2017), 

https://www.ftc.gov/system/files/documents/public_statements/1049793/ip_guidelines_2017.pdf [hereinafter 2017 

IP GUIDELINES]. 36 See FED. TRADE COMM’N & U.S. DEP’T OF JUSTICE, ANTITRUST GUIDELINES FOR COLLABORATIONS AMONG 

COMPETITORS, supra note 33.
11

static, the application of the framework, and (iii) allow for changes through updates and revisions 

consistent with developments in agency practice and case law. 

I do not want to discuss the substance of this document yet but do want to identify and 

highlight a foundational principle for us in OPP. OPP believes it is necessary for the 

Commission (and courts) to start with a careful evaluation of the effect of conduct under 

review, not its label. Characterizing a platform as an “essential facility” or a platform’s conduct 

as “an exclusive deal,” a “refusal to deal,” or a “product design decision” may be helpful in 

identifying relevant prior case law and in identifying the appropriate legal framework. Such 

labeling should not distract from the focus of the Commission’s inquiry, which should be on 

whether and how the conduct affects competition—including competition for inputs—and 

consumers. We want to apply our enforcement resources to deter, identify, prohibit and 

remediate practices only those that actually restrict competition and actually injure consumers.

Proposals to regulate the operational decisions of platform companies because of 

competitive concerns seem to me insufficiently confident in the strength, vitality and dynamism 

of the federal antitrust laws and of the common law’s ability to integrate new or refreshed 

economic concepts. This guidance document will make clear, or perhaps just clearer, whether 

this view is correct and whether and where the utility-style regulation proposed by some is 

appropriate or necessary.37

Also well up in the queue is guidance on the analytical framework used to evaluate 

vertical mergers. In conjunction with staff from the Bureau of Economics and Bureau of 

 37 See, e.g., GEORGE J. STIGLER CENTER FOR THE STUDY OF THE ECONOMY AND THE STATE, REPORT ON MARKET 

STRUCTURE AND ANTITRUST SUBCOMMITTEE (2019),

https://research.chicagobooth.edu/-/media/research/stigler/pdfs/market-structurereport.pdf?la=en&hash=E08C7C9AA7367F2D612DE24F814074BA43CAED8C; Ganesh Sitaraman, How To 

Regulate Tech Platforms, THE AMERICAN PROSPECT, Nov. 8, 2018, https://prospect.org/article/how-regulate-techplatforms; K. Sabeel Rahman, The New Utilities: Private Power, Social Infrastructure, and the Revival of the Public 

Utility Concept, 39 CARDOZO L. REV. 1621 (2018). 
12

Competition, we are drafting a “vertical merger commentary,” similar in form and purpose to the 

2006 Commentary on Horizontal Merger Guidelines.

38 The Antitrust Division’s litigation of the 

AT&T/Time Warner case identified substantial misconceptions about the antitrust agencies’

interest in and willingness to challenge vertical mergers.39 

This commentary, which could serve as a substitute for, or complement to, vertical 

merger guidelines, is intended to articulate and explain the Commission staff’s analytic 

framework for reviewing, analyzing and remedying what might be an anticompetitive vertical 

merger, and will include case examples. 

Unlike the 2006 Horizontal Merger Commentary, we do not have an up-to-date set of 

U.S. vertical merger guidelines to structure our analysis.40 Thus, the structure the commentary 

sets out could support a path to updated and joint FTC/DOJ vertical merger guidelines. The 

commentary will likely include a legal overview of the application of Section 7 to mergers, a 

discussion of the relevance of market definition and market shares, sources of evidence, and, 

more substantively, theories of unilateral and coordinated harm, the treatment of efficiencies, and 

consideration and adoption of remedies sufficient to address competitive harms. 

Whether the Commission ought to be challenging more (or fewer) vertical merger 

transactions is a reasonable question to ask, but this document will not take a position on that 

question. Viewers of our hearing session on vertical mergers will recall that BE Director 

 38 See U.S. DEP’T OF JUSTICE & FED. TRADE COMM’N, COMMENTARY ON THE HORIZONTAL MERGER GUIDELINES

(2006),

https://www.ftc.gov/sites/default/files/attachments/mergerreview/commentaryonthehorizontalmergerguidelinesmarch2006.pdf. 39 See United States v. AT&T, Inc., 916 F.3d 1029 (D.C. Cir. 2019); see also Makan Delrahim, Assistant Attorney 

Gen., U.S. Dep’t of Justice, Harder Better Faster Stronger: Evaluating EDM as a Defense in Vertical Mergers (Feb.

15, 2019), https://www.justice.gov/opa/speech/file/1132831/download; Jon Sallet, Deputy Assistant Attorney 

General, The Interesting Case of the Vertical Merger (Nov. 17, 2016),

https://www.justice.gov/opa/speech/file/938236/download. 40 U.S. DEP’T OF JUSTICE, NON-HORIZONTAL MERGER GUIDELINES (1984), 

https://www.justice.gov/atr/page/file/1175141/download. 
13

Kobayashi expressed his and the Chairman’s interest in vertical merger retrospectives. The more 

than two dozen retrospectives the Bureau has done—all available on the Commission’s 

website—have focused on horizontal transactions.41 Extending the merger retrospective 

program to include vertical merger transactions is a significant priority for the Chairman and 

Director Kobayashi. We are also considering how best to do retrospectives that help us identify 

conditions or situations where we might unnecessarily block or force divestiture as a condition to 

clearance.

We intend to prepare an update or addendum to the 2006 Commentary on the Horizontal 

Merger Guidelines, addressing at least the following topics: 

(i) elimination of future, nascent or potential competition; 

(ii) acquisitions where the concern is diminished competition for non-price attributes; 

(iii) acquisitions where “data” is a key asset or output of one or both parties, or a key input to 

competitors of the combining firms; 

(iv) buyer and monopsony power, acquired through acquisition (including but not limited to 

labor markets); and,

(v) mergers and acquisitions that enhance and diversify the merged firm’s “portfolio” of 

products or intellectual property rights. 

These are all topics that have come up in the Commission’s previous horizontal merger reviews. 

We think that a clear explication of the theory of competitive harm, the framework for 

identifying and remedying such harm, and the incorporation of case summaries will be useful in 

 41 See Fed. Trade Comm’n, Hearing Transcript of Competition and Consumer Protection in the 21st Century 86:5-7 

(Bruce Kobayashi) (Nov. 1, 2018),

https://www.ftc.gov/system/files/documents/public_events/1415284/ftc_hearings_session_5_transcript_11-1-

18.pdf; List of FTC Bureau of Economics Retrospective Studies, FED. TRADE COMM’N, 

https://www.ftc.gov/system/files/attachments/press-releases/ftc-announces-agenda-14th-session-its-hearingscompetition-consumer-protection-21st-century/list_of_be_retrospective_studies.pdf (last visited Sept. 10, 2019). 
14

identifying whether existing merger law and practice successfully and sufficiently takes account 

of these concerns. 

Participants at our hearing session on nascent competition made the point that the large 

tech firms—defined usually to include or to be limited to Alphabet, Amazon, Apple, Facebook 

and Microsoft—have made hundreds of acquisitions in the past decade, some of which they 

suggest must have been anticompetitive.42 Recent reports have found the same.43 Whether or not 

tech firms do more acquisitions than non-tech firms, we know that only a relatively small 

percentage of those “hundreds” of transactions were the subject of a Hart-Scott-Rodino filing. 

This may be consistent with existing law and rules. A transaction may not have met the 

jurisdictional thresholds. A rule-based exemption (or the interpretation of a rule or statutory 

exemption) may have exempted a transaction from the notification and waiting period 

requirements of the HSR Act. 

This issue may be a relevant to our scheduled review of the HSR Act rules.44 Perhaps it is 

time to consider whether the Commission’s current rules implementing the Act sufficiently take 

account of jurisdictional issues associated with acquisitions of potential future competitors.45 The 

Congress has previously amended the HSR Act to address this concern. The December 2000 

 42 Fed. Trade Comm’n, Hearing Transcript of Competition and Consumer Protection in the 21st Century 254:12-17 

(Diana Moss) (Oct. 17, 2018); id. at 265:8-14 (Sally Hubbard), 

https://www.ftc.gov/system/files/documents/public_events/1413712/ftc_hearings_session_3_transcript_day_3_10-

17-18_0.pdf. 43 See DIG. COMPETITION EXPERT PANEL (UK), UNLOCKING DIGITAL COMPETITION: REPORT OF THE DIGITAL 

COMPETITION EXPERT PANEL 12 (2019). 44 The Commission’s rule review schedule brings the HSR rules up for consideration in 2020. Federal Trade 

Commission, REGULATORY REVIEW SCHEDULE, 84 F.R. 18746-48 (May 2, 2019), available at 

https://www.govinfo.gov/content/pkg/FR-2019-05-02/pdf/2019-08936.pdf. 45 Any future review should bear in mind that the nexus requirements for merger notification determinations should 

incorporate a material nexus to the jurisdiction and be based on clear and objective thresholds. See e.g., ICN 

Recommended Practices for Merger Notification and Review Procedures,

https://www.internationalcompetitionnetwork.org/wp-content/uploads/2018/09/MWG_NPRecPractices2018.pdf,

and the OECD Recommendation on Merger Review,

https://www.oecd.org/daf/competition/oecdrecommendationonmergerreview.htm. This principle is appropriate and 

necessary to provide certainty as to the filing obligations of merging parties trying to determine where and whether 

they must file a merger notification.
15

legislative changes to the HSR Act eliminated notification and waiting period requirements for 

relatively small dollar transactions unlikely to raise competitive concerns. The December 2000 

changes also removed the “size-of-person” jurisdictional threshold for transactions valued in 

excess of $200 million (adjusted annually). This change captured within the Act’s notification 

and waiting period requirements certain acquisitions that would not previously have been subject 

to the Act – acquisitions of companies with limited current sales and assets but that might

nevertheless be a future competitive threat to the acquiring firm.46

We are preparing an analysis of the “consumer welfare standard” and alternatives to the 

consumer welfare standard as the proper organizing principle of judicial and agency antitrust 

review. This analysis will include a review and evaluation of the recent literature on trends in 

concentration in product and labor markets and in profits and margins. This recent empirical 

work is relied on to support arguments that the consumer welfare standard is an insufficient 

organizing principle for maintaining competitive markets or addressing issues not clearly 

associated with antitrust review.47 This research formed the basis for many of the comments we 

received questioning the current and recent historical direction of antitrust enforcement.48 

 46 See Hart-Scott-Rodino Antitrust Improvements Act of 1976, 15 U.S.C. § 18a; see also 146 CONG. REC. S10,989-

90 (daily ed. Oct. 25, 2000) (statement of Sen. Hatch on S. 1854, The 21st Century Acquisition Reform and 

Improvement Act of 2000), https://www.congress.gov/crec/2000/10/25/CREC-2000-10-25-pt1-PgS10989.pdf. 47 See, e.g., Fed. Trade Comm’n, Hearing Transcript of Competition and Consumer Protection in the 21st Century

14:1-35:17 (Joseph E. Stiglitz) (Sept. 21, 2018),

https://www.ftc.gov/system/files/documents/public_events/1408208/ftc_hearings_session_2_transcript_9-21-

18.pdf; id. at 112:1-124:3 (Jonathan B. Baker) (Sept. 13, 2018), 

https://www.ftc.gov/system/files/documents/public_events/1398386/ftc_hearings_session_1_transcript_9-13-

18_1.pdf; see also WILLIAM A. GALSTON & CLARA HENDRICKSON, BROOKINGS INST., A POLICY AT PEACE WITH 

ITSELF: ANTITRUST REMEDIES FOR OUR CONCENTRATED, UNCOMPETITIVE ECONOMY (2018),

https://www.brookings.edu/research/a-policy-at-peace-with-itself-antitrust-remedies-for-our-concentrateduncompetitive-economy/. 48 See, e.g., Comment of Tim Wu, Columbia Law School (Nov, 1, 2018),

https://www.ftc.gov/system/files/documents/public_comments/2018/11/ftc-2018-0091-d-0008-156114.pdf; 

Comment of Robert Weissman, Public Citizen (Aug. 20, 2018),

https://www.ftc.gov/system/files/documents/public_comments/2018/08/ftc-2018-0048-d-0062-155233.pdf; 

Comment of Justice Catalyst, Towards Justice, & Eric Posner, Univ. Chi. Law Sch. (Dec. 14, 2018), 

https://www.ftc.gov/system/files/documents/public_comments/2018/12/ftc-2018-0088-d-0016-163103.pdf.
16

The research has been the subject of commentary by economists and lawyers familiar 

with antitrust analysis.49 It bears similarities to the Structure-Conduct-Performance research of 

the 1950s and 1960s, which formed the overarching basis for the FTC’s industrywide cases of 

the 1970s.50 Some reviews have found the results of this empirical research, because of 

methodological limitations of the studies, to be insufficient to serve as a basis for a change in 

antitrust policy. OPP and BE are reviewing this work with fresh eyes and will come to our own 

conclusions.

51 

To the extent that courts and agencies believe that application of the consumer welfare 

standard turns solely or substantially on short-term price effects, we intend to correct this view. 

FTC enforcement actions do not conform to this alleged limitation and I do not think the staff 

views itself as acting outside the law. 

Whether the consumer welfare standard is otherwise still too narrow to address all 

competitive harms that can be associated with business conduct or transactions is something we 

will consider. There was a robust discussion of this issue at our hearing session on the consumer 

welfare standard, and we intend to take the concerns and alternative proposals expressed at that 

session seriously.52 Our recommendations and conclusions should be of interest to the judicial 

 49 See, e.g., A. Douglas Melamed & Nicolas Petit, The Misguided Assault on the Consumer Welfare Standard in the 

Age of Platform Markets, 54 REV. INDUS. ORG. 741 (2019); Joshua D. Wright et al., Requiem for a Paradox: The 

Dubious Rise and Inevitable Fall of Hipster Antitrust, 51 ARIZ. ST. L.J. 293 (2019); Carl Shapiro, Antitrust in a 

Time of Populism, 61 INT’L J. INDUS. ORG. 714 (2018). 50 See generally JOE S. BAIN, INDUSTRIAL ORGANIZATION (1959). For a review of the literature and the 

reconsideration of the SCP and concentration-profit relationship, see Michael Salinger, The Concentration-Margins 

Relationship Reconsidered, 21 BROOKINGS PAPERS ON ECON. ACTIVITY 287 (1990); Timothy F. Bresnahan, 

Empirical Studies of Industries with Market Power, in 2 HANDBOOK OF INDUSTRIAL ORGANIZATION 1011 (Richard 

Schmalensee & Robert Willig eds., 1989); Richard Schmalensee, Inter-Industry Studies of Structure and 

Performance, in 2 HANDBOOK OF INDUSTRIAL ORGANIZATION 1011 (Richard Schmalensee & Robert Willig eds., 

1989); Harold Demsetz, Industry Structure, Market Rivalry, and Public Policy, 16 J.L. & ECON. 1 (1973). 51 See, e.g., Melamed & Petit, supra note 49; Wright et al., supra note 49; Shapiro, supra note 49. 52 Fed. Trade Comm’n, Hearing Transcript of Competition and Consumer Protection in the 21st Century 162-289 

(Nov. 1, 2018),

https://www.ftc.gov/system/files/documents/public_events/1415284/ftc_hearings_session_5_transcript_11-1-

18.pdf. 
17

and legislative branches. Our conclusions may also help flesh out the Commission’s Statement of 

Enforcement Principles Regarding “Unfair Methods of Competition” Under Section 5 of the 

FTC Act.53

Antitrust law recognizes that minority ownership and cross-ownership—ownership stakes 

in a competing company—can have anticompetitive consequences.54 Some early empirical 

literature on common ownership and horizontal shareholding of airlines and banking firms

suggests the possibility of a long-term, broad drag on competitive behavior.55 While other 

empirical studies have not reached the same conclusion, we place a high priority on determining 

the merits of this position and of any proposed remedies.56 Some observers have suggested the 

Commission use its 6(b) authority to undertake a broad study of this issue; before determining 

whether our resources should be so used, we are reviewing the empirical work.57 

With the support of the Bureau of Economics, we are preparing an OPP staff paper 

evaluating and analyzing the empirical and theoretical literature on horizontal shareholding and 

common ownership. Appearing at our hearing on this issue, Professor Martin Schmalz criticized 

the characterization of these empirical papers as outliers.58 In his comments, he stated that there 

are dozens of economic and legal papers that broadly support concerns about the competitive 

impact of common ownership. 

 53 FED. TRADE COMM’N, STATEMENT OF ENFORCEMENT PRINCIPLES REGARDING “UNFAIR METHODS OF 

COMPETITION” UNDER SECTION 5 OF THE FTC ACT (2015), 

https://www.ftc.gov/system/files/documents/public_statements/735201/150813section5enforcement.pdf. 54 See, e.g., 2010 HORIZONTAL MERGER GUIDELINES, supra note 34. 55 See, e.g., José Azar, Martin C. Schmalz & Isabel Tecu, Anticompetitive Effects of Common Ownership, 73 J. FIN.

1513 (2018); José Azar, Sahil Raina & Martin C. Schmalz, Ultimate Ownership and Bank Competition (May 8, 

2019) (Working Paper), https://ssrn.com/abstract=2710252. 56 For one review of the literature, see Matthew Backus et al., The Common Ownership Hypothesis: Theory and 

Evidence (Brookings Institution, Working Paper 2019), 

https://www.brookings.edu/wp-content/uploads/2019/02/ES_20190205_Common-Ownership.pdf. 57 See, e.g., Fed. Trade Comm’n, Hearing Transcript of Competition and Consumer Protection in the 21st Century 

225:15-226:1, 244:16-22 (Fiona M. Scott Morton) (Dec. 6, 2018), 

https://www.ftc.gov/system/files/documents/public_events/1422929/ftc_hearings_session_8_transcript_12-6-18.pdf; 

id. at 285:8-12 (Serafin J. Grundl); id. at 304:9-25 (Martin Schmalz). 58 Id. at 195:1-7 (Martin Schmalz).
18

We are taking his criticism to heart in conducting our own review. We are doing a deep 

dive into those dozens of papers—he is referring to about sixty papers, mostly referenced in his 

work—to determine whether they are closely applicable to the theory; we are also reviewing the 

newest economic literature on this topic.59 We will advise the Commission whether this 

literature is sufficient to support or require the broad enforcement, policy, and remedial changes 

that proponents of the competitive theory have called for. 

Our planned addendum to the 2006 COMMENTARY ON THE HORIZONTAL MERGER 

GUIDELINES may articulate the theories of harm that could arise from the ownership of small 

minority interests in a firm, cross-ownership, and from passive or active common ownership 

stakes, and provide an analytic framework for considering the possibility and likelihood of such 

harm. I hasten to add that the theories are interesting but surveys of the literature find that the 

evidence of anticompetitive common ownership appears to be limited, but for a few empirical 

studies.

60 

Our hearing session on competition and consumer protection issues in U.S. broadband 

markets was done in conjunction with all the bureaus of the agency, and our output is going to 

focus on the competition and consumer protection topics discussed at the hearing session and in 

our questions for comment. In part, where useful and relevant, our output will update the 

Commission’s 2007 Broadband Connectivity Competition Policy Report.61 However, our focus 

will be on addressing the technological, consumer protection, and competition oriented questions 

we put out for comment. 

 59 A partial bibliography is provided in Matthew Backus et al., supra note 56, and in the papers cited, supra note 55. 60 See, e.g., Backus, Conlon & Sinkinson, supra note 56. 61 FED. TRADE COMM’N, BROADBAND CONNECTIVITY COMPETITION POLICY (June 2007), 

https://www.ftc.gov/sites/default/files/documents/reports/broadband-connectivity-competitionpolicy/v070000report.pdf. 
19

We have not yet settled on the scope of our output related to our hearing sessions and 

questions in two areas where competition and consumer protection concerns are closely 

intertwined: big data and artificial intelligence, including “machine learning” and “machine 

based” decision making. Here are a few areas of interest. 

• Should we, and how would we, account for privacy considerations in antitrust

matters, especially merger review? 

• How should harm to privacy, in a competition matter, be defined and measured?

• Are the Commission’s statements on unfairness, deception, and unfair methods of 

competition sufficiently flexible to address consumer and competitive harms (if 

any) associated with the use of data, artificial intelligence and machine learning?

What are those harms? 

In a few weeks, we will articulate more clearly our approach to these two topics. 

Similarly, we are thinking about, but have not yet settled on, the scope of our output with respect 

to privacy and data security. 

On all of the projects I have announced, where there are overlaps in authority or 

enforcement responsibility, we are consulting with the Antitrust Division to get the benefit of 

their thinking and to achieve consistency in analytic frameworks, if possible. 

I have laid out quite a lot here, but before finishing up, I want to make sure I note that 

there are other, non-hearings related projects in our shop. We continue to be active in reviewing 

proposed state legislation and federal regulations for comment where such legislation or 

regulations may have anticompetitive effects or otherwise diminish protections available to 

consumers, and we are also considering our policy and enforcement agenda for when our 

hearings projects are completed. 
20

We are quite busy in OPP. I said last year when we opened our hearings that I have the 

best job in the agency and that I work with a great group in OPP, and within the agency. I still 

believe it. The Chairman and I are grateful for all the hard work by the OPP team—a band of 

consummate professionals.