Michael Froman’s Speech, The Value of Conversations on Policy, Morality, and Research in the Legal System

Michael Froman’s Speech, The Value of Conversations on Policy, Morality, and Research in the Legal System

Opening Remarks and Fond Memories

Thank you, Josh, for the kind introduction, I appreciate your discretion in not mentioning our time together at the Federal Trade Commission.

Recently in Milwaukee, Wisconsin, I shared stories with my daughter at the Pfister Hotel, reminiscing about my clerkship at the Federal Courthouse.

Nostalgic Clerkship Moments with Judge Reynolds

Fond memories of late-night discussions with Judge Reynolds in his empty office dominate my recollections.

Despite the amusing anecdotes, there’s a deeper lesson about the importance of both policy and research in our work.

The Significance of “May” in Section 7 of the Clayton Act

In honor of Judge Reynolds, I want to delve into two contentious issues in merger litigation: the text of Section 7 of the Clayton Act and the economic consensus supporting the structural presumption.

The use of the word “may” in the statute is crucial, emphasizing a “reasonable probability” of substantially lessening competition, not a certainty.

Burden of Proof and Policy Judgment

The burden on the government to prove a merger’s potential harm is explicitly outlined in the statute.

This legal standard, combined with the structural presumption, underscores the policy judgment favoring prevention of anticompetitive mergers.

Economic Consensus on Structural Presumption

Moving beyond the legal aspects, the economic literature strongly supports the structural presumption.

Notable economists across ideologies emphasize that mergers significantly increasing market concentration are likely to harm competition, reflecting a consensus stronger than ever.

Historical Perspective and Line Drawing

Examining history, we find that early correlations between market structure and performance were misinterpreted.

The structural presumption, while involving some line drawing, is supported by empirical work, with current literature suggesting even more stringent thresholds than those outlined in the 2023 Merger Guidelines.

Acknowledging Opposing Views and Judicial Validation

It’s crucial to acknowledge opposing views, but recent judicial decisions, like FTC v. IQVIA, validate the structural presumption.

Returning to basic principles reminds us of the importance of Congress’s choice to use “may,” defining the government’s burden and emphasizing the value of the structural presumption.

Guiding Principles for Merger Assessment

In conclusion, our work is guided by both the risk assessment nature of Section 7 and the continued importance of the structural presumption.