Washington, D.C. — Following the FTC’s court win against the Kroger-Albertsons mega-merger—a high-profile rejection of the common argument that two firms must be allowed to merge to compete with a larger rival—the American Economic Liberties Project today released a brief debunking the argument in depth.

“The ‘merge-to-compete’ argument is an Orwellian attempt to flip antitrust law on its head by justifying consolidation trends instead of stopping them as Congress intended,” said Laurel Kilgour, Research Manager at the American Economic Liberties Project. “The historical record clearly shows that mergers approved on these grounds have harmed consumers, workers, and local communities, while triggering a vicious cycle of further harmful consolidation. Furthermore, the merge-to-compete argument is contrary to the policy goals of Congress as recognized in Supreme Court precedent. With dealmakers eagerly ramping up their ambitions in hopeful anticipation of lax enforcement under the Trump administration, regulators and the courts must continue rejecting this bogus argument, as Judge Adrienne Nelson in Oregon and Judge Marshall Ferguson in Washington rightly did by enjoining the Kroger-Albertsons merger.”

The brief provides numerous examples of mergers-to-compete that ultimately led to foreseeable harms—layoffs, higher prices, and product degradation. It also reviews the academic literature on corporate consolidation broadly, which has tied market concentration to weak productivity growth, declining investment, and stifled innovation, stagnant and reduced wages for workers, rising corporate profit rates and markups, resulting in higher prices for consumers, and fewer startups pursuing new, bold, innovative products that directly compete with incumbents.

On the legal side of the equation, the brief breaks down the Supreme Court precedent recognizing that alleged “pro-competitive” benefits of merge-to-compete situations do not override merger harms. Additionally, lower courts have regularly acknowledged that the congressional intent of the antitrust laws is to prevent consolidation in its “incipiency.” In 2023, the DOJ and FTC updated merger guidelines to focus on transactions that would accelerate harmful consolidation trends, and made clear that generic assertions that mergers generate “efficiencies” cannot justify otherwise illegal mergers.

Read the full brief here.

Learn more about Economic Liberties here.

###

The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.