History of The Merger Guidelines
The first merger guidelines set forth by the DOJ were the 1968 Merger Guidelines, which remained largely unchanged until 1982. The 1968 guidelines were developed by former U.S. Assistant Attorney General Dr. Donald Turner, an economist and lawyer with expertise in the field of industrial organization. These merger guidelines were criticized in some quarters as being overly concerned with issues of market structure such as barriers to entry and concentration ratios at the expense of efficiency and economies of scale. They were, however, a step forward in two ways: they gave more accurate advice to corporate management as to when and how mergers would be examined, and brought new economic ideas into antitrust enforcement, specifically the "structure-conduct-performance" model of industrial organization.
In 1982, Associate Attorney General Bill Baxter, under the authority of U.S. Attorney General William French Smith, released a new set of guidelines, which made heavier use of modern concepts of microeconomic theory, including the using the Herfindahl index to determine market concentration. The newer guidelines took a more favorable view of economies of scale and efficiency of production as rationales for integration. Moreover, they raised the level of market concentration necessary for the government to scrutinize mergers, effectively treating competition as a means to greater efficiency rather than as a goal in and of itself. This was quite a controversial approach at the time: some antitrust lawyers saw it as a loosening of previous restraints on corporate consolidation, and some State Attorneys General responded to Baxter's changes by tightening merger enforcement at the state level.
The guidelines were revised again in 1984. The only remaining portion of the 1984 guidelines which remains in effect is Section Four, which governs the examination of market effects of vertical integration. These guidelines were later replaced by the 1992 Merger Guidelines, which represented a fine-tuning of previously established tools and policies, such as the SSNIP test and rules governing the acquisition of failing firms. The 1992 Guidelines were revised in 1997, almost concurrently with the FTC's challenge of the Staples-Office Depot merger in federal court.
The 1997 Horizontal Merger Guidelines were replaced with the most recent version in 2010. This version was released on August 19, 2010. The 2010 Guidelines introduced the concept of "upward pricing pressure" resulting from a merger between competing firms.
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