The Merger of Guidelines and the Integration of Efficiencies into Antitrust Review of Horizontal Mergers

There is a widening consensus among jurisdictions with competition laws that “the basic objective of competition policy is to protect competition as the most appropriate means of ensuring the efficient allocation of resources—and thus efficientmarket outcomes—in free market economies.” 1 As this statement indicates, it is efficiency, not competition, that is the ultimate goal of the antitrust laws. One of the senior economists of the Justice Department’s Antitrust Division put it very well recently: “efficiency is the goal, competition is the process.”2 When the competitive process is allowed to run its course—unfettered by exclusionary practices or anticompetitive agreements among firms—the incentive of firms to lure away rivals’ customers by offering them lower prices, superior quality, or new product features will necessarily lead these firms to seek more efficient ways to do business. Only by devising more efficient means to produce and distribute their goods, or by finding ways to offer superior or additional features for the same cost, can firms displace sales by their competitors. Antitrust enforcement therefore assumes as its mandate the deterrence of business conduct that threatens to distort the competitive process in product and innovation markets