Lina Khan 3, Competition and Regulation in Disrupted Times, Brussels, Belgium by Cory Doctorow is licensed under Attribution-ShareAlike (CC BY-SA 2.0).

Rep. Nathaniel Moran (R-Texas) has led a letter to Federal Trade Commission Chair Lina Khan demanding answers on the agency’s approach to mergers and acquisitions (M+A). The letter outlines the numerous ways Khan’s FTC has chilled M+A activity, raising questions that bureaucrats are picking economic winners and losers instead of evaluating deals on their merits. The letter concludes by requesting information from the FTC that will give taxpayers much-needed transparency on agency practices. 

ATR commends Rep. Moran and co-signers Reps. Andy Biggs (R-Ariz.), Jeff Van Drew (R-N.J.), Scott Fitzgerald (R-Wis.), Barry Moore (R-Ala.), and Laurel Lee (R-Fla.) for holding the FTC accountable to the American people. 

Read the full letter here or below: 

Dear Chair Khan:

We write to express our concern regarding the Federal Trade Commission’s (FTC) ill-advised current approach to mergers and acquisitions, an approach that stifles innovation, impedes competition, and diminishes consumer choice. The FTC’s decisions are decreasing the predictability in the merger review process that is critical for American enterprises to grow and innovate and for markets to function efficiently. As Members of Congress, we are concerned with the Biden FTC’s pursuit of a partisan agenda that expands agency power and discards decades of experience to the detriment of the American people. We urge the FTC to revert to a principled approach that puts consumers above partisan agendas and write to request information and documents relevant to Congress’s oversight.

The consumer welfare standard, which the FTC had followed for over forty years, provides an important basis for merger review and enforcement by assessing the impact that a planned merger may have on consumers The analysis includes metrics such as changes in price and output, as well as product quality and innovation.  Under this standard, enforcers must treat all businesses fairly, regardless of size, which supports the rule of law. Conversely, without the consumer welfare standard, the FTC can effectively “pick[] winners and losers” and centrally plan the economy.

The Trump Administration understood the importance of focusing on consumer welfare and maintaining sound antitrust policy. For example, during the Trump Administration, the FTC kept the 2010 Horizontal Merger Guidelines, which courts have heavily relied on in analyzing transactions. Similarly, the FTC’s 2020 Vertical Merger Guidelines accounted for the effects that deals have on consumers. But in 2021, the Biden FTC voted—along party lines—to rescind those guidelines, even as the Biden Justice Department’s Antitrust Division left them in place.  The FTC’s unilateral reversal has created uncertainty that is harming competition and the American people, and has imperiled the rule of law by allowing the merger review standard that is applied to vary depending upon which agency conducts the review.

In addition to rejecting consumer-centric antitrust policy, the Biden FTC has needlessly slow-walked merger reviews and intentionally undermined dealmaking. Citing resource constraints and merger volume, the Biden FTC announced in early 2021 that it would suspend “early terminations,” which allow mergers that pose no competitive risk to close before a thirty-day waiting period. Accordingly, the FTC has been holding mergers—including some of the smallest and least competitively consequential—for at least thirty days. The Biden FTC’s approach has “introduce[d] inefficiency into market operation, harming consumers.” In some cases, the Biden FTC has also sent letters informing merging parties that they are still under investigation even after the expiration of the waiting period. These letters, often sent without a reason to believe the merger is unlawful, effectively extend investigations past the timeline that Congress has set for the FTC’s merger review. Threatening future litigation even when the FTC may have little reason to believe a deal is anticompetitive chills the growth and innovation of American businesses, and is inconsistent with Congress’s intent in establishing merger review.

Despite receiving additional funding from Congress at the end of 2022, and a significant drop in merger activity, the FTC has not resumed early terminations and has continued to exceed the statutory deadline for reviewing mergers.  Yet, according to Commissioner Christine Wilson, FTC “enforcement numbers under this administration are significantly lower than enforcement numbers under the Trump Administration.” One must wonder, then, if the Biden FTC is shirking its responsibility to investigate mergers effectively and efficiently, and instead wasting new funds on partisan projects like illegal rulemaking.

Based on early indicators, it seems unlikely that the Biden FTC will re-embrace the consumer welfare standard. For example, the FTC’s Request for Information on Merger Enforcement foreshadows a skepticism toward mergers by dismissing out of hand potential procompetitive and cost-cutting justifications. Instead, the FTC seems poised to implement a new approach that focuses on factors that may be unrelated to sound, economics-based merger analysis. Additionally, it may be much harder for companies to pass the FTC’s scrutiny under any new merger guidelines, even when a merger will benefit consumers. Focusing on new considerations other than consumer welfare without accounting for relevant economic harms is a disservice to the American people.

The Biden FTC’s approach to mergers and acquisitions ignores market realities. Many startups pursue the long-term goal of being acquired. Accordingly, the FTC’s actions in the merger space chill investment and discourage start-ups from growing and developing their businesses, because the prospect of an acquisition may disappear. This could have a lasting impact on the flourishing of U.S. markets. It is critical, now more than ever, to establish certainty in our marketplace that provides incentives for American innovators to continue competing. The American people would be best served if Biden antitrust enforcers would abandon partisan agendas and restore traditional antitrust principles and processes that promote competitive markets, transparency, and the rule of law.

To allow us to conduct oversight of the FTC’s approach, please provide the following information and material:

  1. A comprehensive list of each factor or consideration other than consumer welfare that the Biden FTC has used in any assessment of a proposed transaction since June 15, 2021.
  1. For each factor or consideration listed in response to question one, please explain how the FTC evaluates a proposed transaction’s effects on consumers relative to any effects relating to other factors or considerations.
  1. The date when the Biden FTC will issue new merger guidelines.
  1. All documents and communications referring or relating to the decision to withdraw the Trump Administration’s 2020 vertical merger guidelines.
  1. The date when the Biden FTC will reestablish the practice of early terminations. If the Biden FTC will not resume the practice of early terminations, please explain the FTC’s rationale in detail, including for any types of transactions where the FTC routinely finds no anticompetitive effects.
  1. The number of proposed transactions since June 15, 2021, where the FTC:
    1. has not granted an early termination;
    2. has not issued a second request;
    3. has issued a second request;
    4. has told parties to a proposed transaction that the agency would challenge a proposed transaction; or,
    5. has challenged a proposed transaction.
  1. All documents and communications, including any on personal devices and any communications with the Executive Office of the President or CFPB Director Rohit Chopra, relating to the FTC’s policy concerning early terminations.
  1. A precise description of how the FTC expects to spend its increased funding from December 2022 appropriations, and any merger fee revenues in 2023 in excess of appropriations, with respect to merger investigation and enforcement.

Please provide this information as soon as possible but no later than 5:00 p.m. on March 23, 2023.

Thank you for your attention to this matter.


Nathaniel Moran
Member of Congress

Andy Biggs
Member of Congress

Jeff Van Drew
Member of Congress

Scott Fitzgerald
Member of Congress

Barry Moore
Member of Congress

Laurel Lee
Member of Congress