Responding to the Reaction: The Draftsman's Viewepartment of Justice Antitrust Division Merger Guidelines

The Antitrust Division of the US Department of Justice set 2 goals in updating the 1968 Merger Guidelines: 1. to conform them to subsequent developments in antitrust law and economics, and 2. to establish more certain standards for evaluating mergers and acquisitions. Many of the criticisms of the new Guidelines were foreseen. The primary concern of the antitrust laws is to protect and improve economic efficiency; although this concern frequently also furthers social and political goals, when there is a conflict, economic considerations should prevail. The most innovative and controversial concept of the Guidelines is the approach to market definition. The relevant market is generally considered to be the smallest one. The effect of a merger in the relevant market is predicted primarily by the degree of concentration in a market and by the size distribution of sellers' market shares, using the Herfindahl-Hirschman Index. Other factors affecting the ability of firms to use market power are listed in the Guidelines but are not assigned relative weights. Future revisions will even more effectively protect consumer welfare.