Two years ago President Joe Biden issued with great fanfare an Executive Order on Promoting Competition in the American Economy that called for greater enforcement of the antitrust laws. He observed that the antitrust laws have been underenforced, resulting in more powerful corporations, higher prices, lower wages, and greater inequality. The two major antitrust agencies, the Department of Justice and the Federal Trade Commission, heeded his call by aggressively challenging high-profile mergers. But, though they gained some significant victories, again and again they have been thwarted by the courts.

Today may be a turning point as the two agencies issue a draft revision of their Merger Guidelines, the influential document that they first released to the public in 1968, and which has helped—for both good and for ill—to shape how the courts interpret merger law. Some might wonder how courts will receive the new Guidelines after a string of defeats. The answer is that the Guidelines will succeed only if the courts are willing to open their eyes to the new learning that they represent.

Section 7 of the Clayton Act of 1914 prohibits mergers whose effect “may be substantially to lessen competition or tend to create a monopoly.” The agencies typically challenge so-called horizontal mergers between competitors (e.g., Ford and GM), though they may try to block other kinds of mergers as well. A merger between competitors lessens competition virtually by definition; thus, the word “substantially” limits merger enforcement to “large” firms, which usually means at least one firm with, say, 30% of the market or more. The words “may be” direct courts to predict what will happen: mergers are typically challenged before they are consummated, so courts deal with “probabilities, not certainties.”

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