Comment on the January 2022 DOJ and FTC RFI on Merger Enforcement : Issues Related to Digital Markets

The Federal Trade Commission and Antitrust Division of the Department of Justice (“the agencies”) have recently published a Request for Information (“RFI”) on Merger Enforcement in which they “seek public comment on how the agencies can modernize enforcement of the antitrust laws regarding mergers,” and list “digital markets” as one of 15 top-level topics. In the RFI, the agencies seem to imply that digital markets are unique in the following ways:• Rapid technological change• Network effects and the possibility of “tipping”• Common use of zero or negative prices, or lack of explicit prices• Involvement of multisided platforms, including transaction platforms• Potential for mergers to lead to data aggregation and economies of scale and scope• Importance of multi-homing and interoperability• Importance of competition for attentionWhile these are interesting economic issues deserving of consideration when they are relevant to a merger inquiry, they are neither new nor unique to digital markets. Rather, each has been studied in non-digital contexts, and economists have frameworks to analyze these phenomena. We do not see any reason to “single out” digital markets in the merger guidelines. We will explain why in this Comment