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On 19 July 2023, the US Department of Justice and Federal Trade Commission released the Draft Merger Guidelines, which represent a significant departure from previous iterations of merger review guidelines. The Draft Merger Guidelines introduce new challenges for merging firms, including stringent structural presumptions and additional considerations such as evaluations of trends in concentration and whether there is a history of serial acquisitions.

In this white paper, NERA Economic Consulting Directors Dr. Robert Kulick and Dr. Emily Walden propose using available data and economic analyses to address agency concerns efficiently. For example, trends in industrial concentration can be assessed using data from the US Census Bureau’s quinquennial economic censuses, data on patent filings and measures of R&D spending from the National Science Foundation can be used to provide evidence to pre-empt or rebut assertions of harm to innovation, and evidence of a dynamic market structure available from the Census Bureau’s Business Dynamics Statistics program can be used to evaluate ease of entry and exit and low barriers to entry. By providing early evidence, the authors anticipate merging parties will be able to expedite the review and ease the burden on all parties involved.

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