Prepared remarks: The Under-Explored Institutional Side of Merger Review, NYU Law School (Sept. 29, 2023)
I am delighted to join you all here to celebrate three tremendous professors and friends, Dan Rubinfeld, Harry First, and Eleanor Fox. Today’s topic of the substantive revision of the Merger Guidelines provides me with a puzzle and an opportunity. The puzzle is that when I think of the important contributions of Dan, Harry, and Eleanor, my first thought is not substantive merger law, but rather their work as institution builders and scholars of the institutional side of antitrust. But that’s also an opportunity because the institutional side of merger review rarely receives the attention it deserves. After all, the merger guidelines themselves reflect ongoing dialogue between multiple institutions (the FTC, the DOJ, State AGs, other stakeholders and, of course, the judiciary).
In the case of Dan, Harry, and Eleanor, they have devoted their careers to understanding how often overlooked institutions work in practice and calling our attention to their importance. So that’s what I will focus on in my remarks. In particular, I will discuss three principal points—(1) why institutional issues are overlooked; (2) the role of the states in merger review; and (3) some issues raised by the increasingly used tactic of “litigating the fix.” The Merger Guidelines’ treatment of the last two issues as an afterthought makes my first point—we need to spend more time reflecting on the institutional side of antitrust law and policy.
I. The Institutional Side of Antitrust
It merits note that antitrust law, while often talked about as a national endeavor, operates in both a global environment and a local one. Today, we are living at a time where there are forces that make interconnected global markets a critical locus of analysis as well as call on policymakers to take a local emphasis. To appreciate this need to think both internationally and locally at the same time, consider two lessons from the COVID-19 pandemic and its impact on global and local supply chains: (1) we live in an interconnected society where pandemics and other systemic shocks can come from anywhere and affect all of us; and (2) local supply chains can dictate which communities are resilient and which ones are not.
All of us have learned from Eleanor about the need to understand international antitrust institutions. When I worked as counsel to Joel Klein in 1996, Eleanor’s leadership and guidance helped convince Joel to develop the international competition network, or ICN, an organization of member states from across the globe. As Eleanor has since explained, this initiative provides national antitrust authorities with both the ability to learn from one another, and the disposition to work with one another, leading to greater convergence and harmonization. In a subsequent tour of duty at the Department of Justice’s Antitrust Division, I served as the deputy for international relations, participating in this initiative and preaching its virtues. I can thus confirm what Professor Fox has highlighted—the development of the ICN as a legitimate institution with “soft power” and the ability to facilitate convergence in antitrust thinking is real and important. It has also helped antitrust enforcement globally, to the benefit of consumers and of parties to multijurisdictional transactions, as enforcers learn from one another how to best protect competition.
To give Eleanor her rightful due for this monumental achievement, let me quote from a statement she made when the ICN annual conference recognized her along with Jim Rill and Merit Janow for their work on ICPAC and in founding the ICN. As she explained at the time:
In 2000, we submitted our report proposing the formation of an international network of competition authorities wherein officials from developed and developing countries would work informally, sharing knowledge and expertise and working towards convergence of antitrust laws and procedures and understanding of divergences. The idea was backed by Joel Klein, then Assistant Attorney General in Charge of Antitrust in the US Department of Justice, and adopted by, at first, 14 nations’ competition authorities.
ICN is now one of the most successful networks in the world for convergence and informed divergence of national laws in specific areas. It is exemplary as a mode of global governance, for it effectively links more than 120 different national competition laws, many of which simultaneously apply to the same cross-border transactions and conduct of transnational dimensions.
This development is truly an example of what I have called policy entrepreneurship. And we need more of it.
I had the pleasure of working with Dan Rubinfeld at the Justice Department, where he served as the Chief Economist. In one of the most important institutional innovations in antitrust history, the Justice Department decided to hire economists to work alongside lawyers. This move—and the culture of collaboration that exists—provided additional rigor and valuable perspectives that helped shape modern antitrust law. Oliver Williamson, the Nobel Laureate who was a pioneer at the Department as a Special Economic Assistant, left the Department concerned that “the prevailing attitude toward nonstandard and unfamiliar contractual practices and organization structures was that such ‘abnormalities could be presumed to have anticompetitive purpose and effect.’” Williamson, moreover, made the case that merger policy—in order to be rational—needed to take efficiencies seriously as a defense. And, over time, it has.
Dan served as Chief Economist at the Justice Department at the time of the Microsoft case. In so doing, he worked to develop the economic theory of harm that Microsoft engaged in illegal monopoly maintenance. Consider, for example, that Dan worked with an incredible team to develop the crucial insight that Microsoft benefited from the “applications barrier to entry,” meaning that its existing installed base of customers encouraged a critical mass of applications developers to focus on its platform and not to develop applications for rival operating systems. The core threat that Microsoft faced was that the Netscape Navigator and the Java programming language could erode this barrier to entry. As Dan has explained, Microsoft responded by engaging in a range of practices not designed to compete on the merits, but rather to erode competition and undermine rivals. The collaboration in that case between lawyers and economics—thanks in considerable part to Dan’s leadership—is a testament to the institutional wisdom of developing economic expertise in the Department. It’s also no accident that Dan has spent so much of his career at law schools, enabling him to encourage this form of interdisciplinary collaboration, which is part of what makes antitrust so special.
Part of why people don’t invest time in institution-building, or in understanding how institutions work, is that it is hard work. On that point, Judge Posner’s warning a generation ago about the state of antitrust law remains true today—“[t]he real problem lies on the institutional side: the enforcement agencies and the courts do not have adequate technical resources, and do not move fast enough, to cope effectively with a very complex business sector that changes very rapidly.” To that end, we need to develop strategies to enable more effective merger review where the merging parties and interested stakeholders may well appreciate the impact of the merger in ways that antitrust authorities do not. One option is to give those engaging in merger review more latitude to review mergers after-the-fact where, for example, there are a series of mergers that are designed to prevent today’s upstart from displacing an incumbent firm. In a troubling ruling that undermined the ability of state enforcers to do just that, the United States District Court for the District of Columbia concluded that the doctrine of laches applies against state antitrust enforcement. Given the institutional structure of antitrust law as based on a cooperative federalism, with dual federal and state oversight, this is a ruling that Congress should fix by making clear that State Attorneys General stand on equal footing with their federal counterparts, to whom the doctrine of laches does not apply.
II. The Role of the States in Merger Review
As I turn to the topic of the role of the States in antitrust review, let me start by celebrating Harry First. As is appreciated at NYU, Harry served in the New York Attorney General’s Office as the head of it Antitrust Section. And with Scott Hemphill, a fellow NYU professor who also held this position, I believe NYU Law holds a special position within the orbit of state antitrust, counting two esteemed former state antitrust heads among its faculty. Additionally, it’s worth noting that Bob Abrams, after whom the Abrams Lecture is named, played a pivotal role in establishing the significance of state antitrust during a time when the Reagan Administration scaled back antitrust enforcement efforts.
Let me begin by sharing what Bob stated in a recent interview, reflecting on his great book, the Luckiest Man Alive:
My election as New York AG in 1978 was just after the 1976 Hart Scott Rodino Act, which called for a spirit of cooperative federalism, where states would be given the opportunity to directly enforce federal antitrust law. As the Supreme Court stated in the California v. American Stores case, in which I was involved, the role of states in antitrust enforcement “was in no sense an afterthought; it was an integral part of the congressional plan for protecting competition.”
I worked to make that vision a reality, and state AGs became a force in the antitrust arena. During the hands-off Reagan years, New York and other states acted together and effectively filled the void due to the lack of federal enforcement. Former US Attorney General Ed Meese made a revealing admission to me: “All that stuff about returning power to the states, that wasn’t really what we wanted. We had a laissez-faire plan of non-enforcement. You outfoxed us. We won the battle, but lost the war! We never thought that you guys would have the competence to do this. We never imagined that you would be able to work together.”
Bob Abrams’ focus on the Hart Scott Rodino law is apt—the essence of that regime is that state attorneys general are given authority to enforce federal law, providing a backstop for when the federal government fails to enforce the antitrust laws in an effective manner or when it fails to appreciate the full impact a merger may have on a particular state or local market. As I put it recently, Congress “adopted a hedging strategy–ensuring a base level of uniformity, allowing for appropriate experimentation, and building in the opportunity to pick up the slack as to any underenforcement at the federal level.”
Having served at both the national level and the state level, I can report—as Harry’s leadership and scholarship makes plain—that antitrust enforcement at the local level has critical advantages in serving closer to the people. In a recent merger review, for example, we evaluated a merger in Colorado Springs between DaVita’s clinical network and UnitedHealth Group’s Medicare Advantage insurance product. In this case, UnitedHealth consummated the merger after its market share declined from around 75% to around 50% as a result of the emergence of a disruptive entrant, Humana. Humana emerged as a rival after building its relationship with DaVita’s clinics, which referred patients to Humana’s Medicare Advantage offering. In the wake of the merger, however, Humana faced the prospect of losing access to referrals for its Medicare Advantage product from patients at DaVita’s clinics.
In that case, the Federal Trade Commission (FTC) reviewed the UnitedHealth/DaVita merger and declined to take action in the Colorado Springs market. In Colorado, however, the Attorney General’s office was concerned about the prospect of UnitedHealth using control over DaVita’s clinics to reestablish its dominant position in the Medicare Advantage market–thereby leading to higher prices, less choice, and lower quality offerings to patients. By taking action in this case, separate and apart from the FTC, we were able to protect Colorado consumers. And rather than protest our action, the FTC respected our authority. That’s cooperative federalism in action.
Currently, we are reviewing the merger between Kroger and Albertsons. What’s unique about this merger is that the end-consumers are not specialized buyers, but rather members of the public who shop for groceries. In recognition of that situation, our office has hosted a series of town halls to learn directly from consumers, workers, and suppliers what they think about the merger. To date, we have hosted 17 such events. And this inquiry, along with the dedicated work of our team, will enable us to form our own view of the merger.
In reflecting on the role of states in merger review, it’s important to discuss the recent challenge by the New York Attorney General’s office, along with other states, to the merger between Sprint and T-Mobile. That case raised a legal issue that, like the laches issue I discussed earlier, warrants attention. Notably, in that case, the Department of Justice argued that it is the supreme arbiter of antitrust law and that, when it concludes a merger is benign, the states lack authority to challenge a merger. In that case, New York Attorney General Tish James led the coalition of states in pushing back on this claim, explaining that “[s]tates are independent enforcers of the antitrust laws, and it is the role of the Court–not any federal agency–to decide the lawfulness of the merger.” The court properly accepted this argument, and rejected the Department of Justice’s view, concluding that “[h]aving been tasked with independently reviewing the legality of the Proposed Merger, the Court is not bound by the conclusions of [the US DOJ and the FCC].”
The Department of Justice position in the Sprint/T-Mobile case recalls an earlier dispute over state AG authority during the Microsoft litigation. During that dispute, and in its aftermath, Harry First played a critical role in defending state authority. The principle at issue in that case, and in the Sprint/T-Mobile case, is whether an action by the federal government can extinguish the authority of State AGs. If the federal government wielded such authority, one could readily imagine the ability of the federal government to use de minimis settlements to preclude contrary state actions. And, yet, like in the earlier Microsoft case, the federal government took an expansive view of its authority. Judge Posner, moreover, while not making a descriptive claim about state authority, did advance the normative view that states don’t add value to antitrust enforcement. To that, Harry First responded effectively, explaining that “an examination of Posner’s arguments, however, shows that his policy prescription is extreme and his supporting arguments are weak, if not mean-spirited.”
III. Litigating the Fix
As we consider the realities of merger review, it’s important to recognize merger parties’ increasing use of a strategy known as “litigating the fix” to defend a merger by offering a remedy of the parties’ own making. In 2022, for example, UnitedHealth Group Inc. successfully defended its vertical merger with Change Healthcare by promising to divest a particular unit to a private equity firm. By contrast in United States v. Aetna Inc., the court concluded that the proposed divestiture of a portion of the parties’ Medicare Advantage business to a third party would not replicate the lost competition. And the list goes on. For purposes of my discussion today, however, I am not interested in analyzing the substance of those decisions, but rather—you guessed it—the institutional side of the issue.
For parties in a merger review, there is an ample opportunity after a merger is submitted to propose a “fix” to the antitrust authorities. In my experience, antitrust practice at the federal agencies and at the state level is committed to providing procedural transparency. Ideally, in these discussions, any fix should be presented and considered. But there is currently no requirement that a fix be presented or considered in a timely or structured manner.
A significant risk when parties are permitted to “litigate a fix” during a merger challenge is that a proposal that was never seriously vetted or even defined clearly becomes the potential basis for a merger defense. For courts considering such a defense, it’s critical to keep in mind the institutional side of this issue—did antitrust authorities have an opportunity to evaluate a specific proposal and can a court conclude, with a level of high confidence, that the proposal has a reasonable level of definiteness? In making any such evaluation, courts would be wise to resolve all doubts on this score in favor of the antitrust agencies. Picking up on this concern, Steven C. Salop and Jennifer E. Sturiale have developed a proposal for a required filing by parties seeking to use this defense, preventing the sort of gamesmanship that otherwise could be used by parties who propose potential remedies in a slippery or potentially elusive manner.
* * *
This is a timely conference to celebrate three giants in the antitrust community and use the occasion of the proposed merger guidelines to spur dialogue in their honor. As a student of their scholarship, and as a colleague and friend, I am in their debt for their leadership and insights. I also appreciate that NYU Law has brought on board—Dan Francis, Scott Hemphill, and Chris Sprigman—a new generation of outstanding antitrust scholars to continue this great school’s tradition of leadership in this area. Thanks for the opportunity to join you.
 For a discussion on the need to pay increased attention to resilience, see https://coag.gov/blog-post/prepared-remarks-resilience-as-a-policy-guide-for-water-management-oct-27-2021.
 The development of the ICN followed a report from the International Competition Policy Advisory Committee (ICPAC), on which Professor Fox served as a distinguished and influential member. Professor Fox discussed the work of the ICPAC in “Linked-in: Antitrust and the Virtues of a Virtual Network”. Eleanor M. Fox, Linked-in: Antitrust and the Virtues of a Virtual Network, 43 INT’L L. 151 at 113-17 (2009), available at https://scholar.smu.edu/til/vol43/iss1/18.
 See generally supra n. 2.
 For my take on the importance of this work, see Philip J. Weiser, Towards an International Dialogue on the Institutional Side of Antitrust, 66 N.Y.U. Ann. Surv. Am. L. 445 (2011), available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1716392. As I noted in that talk, “[i]n the effort to reevaluate the 1992 Horizontal Merger Guidelines, one of our first thoughts was to ask how this effort related to, could be informed by, and would affect other jurisdictions around the world. . . . To the extent that our guidelines are less than clear, feedback from developing authorities help us evaluate how our guidelines can be made more transparent, more practicable, and easier to understand.” Id. at 445-46.
 Eleanor Fox Honored as One of Founders of Global Antitrust Network, NYU Law News (May 22, 2013), https://www.law.nyu.edu/news/Eleanor-Fox-honored-as-one-of-founders-of-global-antitrust-network.
 For a longer discussion of this topic, see: Philip J. Weiser, Entrepreneurial Administration, 97 B.U. L. Rev. 2011 (2017), available at https://scholar.law.colorado.edu/facultyarticles/838.
 Oliver E. Williamson – Biographical, NobelPrize.org (Sep. 6, 2023). As Carl Shapiro has explained, the credit in hiring Williamson goes to Donald Turner, “who served as the Assistant Attorney General for Antitrust from 1965-1968 and who was committed to putting antitrust enforcement on sounder economic foundations.” Carl Shapiro, A Tribute to Oliver Williamson: Antitrust Economics, 52, Calif Manage Rev. 138 (2010), available at https://faculty.haas.berkeley.edu/shapiro/williamson.pdf.
 Oliver E. Williamson, Economies as an Antitrust Defense: The Welfare Tradeoffs, 58 AM. 10 ECON. REV. 34 (1969).
 For a telling of the facts and theory of the case, see Daniel L. Rubenfield, “Maintenance of Monopoly: U.S. v. Microsoft (2001)” in John E. Kwoka Jr. and Lawrence J. White, 4th ed, The Antitrust Revolution: Economics, Competition, and Policy (Oxford, Oxford University Press, 2004) 476.
 Richard A. Posner, Antitrust in the New Economy, 68 ANTITRUST L.J. 925, 925 (2001).
 New York v. Facebook, Inc., 549 F. Supp. 3d 6 (D.D.C. 2021).
 For a discussion of this era, and Professors First and Fox’s criticism of it, see William E. Kovacic, The Modern Evolution of U.S. Competition Policy Enforcement Norms, 2 Antitrust L.J. 377 at 385-88 (2003), available at https://www.ftc.gov/sites/default/files/documents/public_statements/modern-evolution-u.s.competition-policy-enforcement-norms/0304modernevolution.pdf,
 Colorado AG Phil Weiser ’94 Interviews Former New York AG Robert Abrams ’63 About His New Memoir, NYU Law News (Mar. 16, 2021), available at https://www.law.nyu.edu/news/robert-abrams-memoir-phil-weiser-alumni.
 Philip J. Weiser, The Enduring Promise of Antitrust, 52 Loy. U. Chi. L.J. 1 (2020).
 For details on this action, see Complaint Colorado ex rel. Weiser v. UnitedHealth Grp., Inc., No. 2019CV31424 (Colo. Dist. Ct. June 19, 2019).
 Colorado was not involved in that challenge.
 See Statement of Interest of the United States at 25, New York v. Deutsche Telekom AG, 439 F. Supp. 3d 179 (S.D.N.Y. 2020) (No. 1:19-cv-5434-VM-RWL) (hereinafter Deutsche Telekom) (“The Litigating States’ strong interest in this merger does not justify their attempt to substitute their judgment for the nationwide perspective of the United States.”).
 Plaintiffs’ Response to Statement of Interest of the United States, Deutsche Telekom; see also Letter from Bob Ferguson, Att’y Gen. of Wash., to Hon. Victor Marrero, J. S.D.N.Y (Jan. 14, 2020), available at https://www.courtlistener.com/re-cap/gov.uscourts.nysd.517350/gov.uscourts.nysd.517350.372.0.pdf (“States–and, for that matter, private parties–have every right to bring a merger challenge that the evidence and the law warrants, regardless of the position of the federal enforcers, or whether the markets are national or local.”).
 Deutsche Telekom.
 See New York v. Microsoft Corp., 224 F. Supp. 2d 76, 87 (D.D.C. 2002) (rejecting DOJ argument that dissenting states lacked authority to propose an alternative remedy); Makan Delrahim, Asst. Att’y Gen., U.S. Dep’t of Just., Remarks at Media Institute Luncheon, “Getting Better”: Progress and Remaining Challenges in Merger Review (Feb. 5, 2020), available at https://www.justice.gov/opa/speech/assistant-attorney-general-makan-delrahim-delivers-remarks-media-institute-luncheon (“Permitting states to undermine federal enforcement also would be contrary to congressional intent.”).
 Harry First, Delivering Remedies: The Role of States in Antitrust Enforcement, 69 GEO. WASH. L. REV. 1004, 1005 (2001).
 United States v. UnitedHealth Grp Inc. and Change Healthcare Inc., F. Supp. 3d 6 (D.D.C. 2022)
 240 F.Supp.3d 70, 72-73. (D.D.C. 2017).
 This means, as I explained previously:
parties should be invited to present their perspective on the facts and the law at all parts of the process. But this openness to dialogue only works in an environment of mutual respect and decorum. Just as enforcers should not keep parties guessing about what their concerns are, private parties should not engage in disrespectful or obstructive advocacy. Private parties that engage in bullying tactics and are not interested in an honest interchange of ideas chill the environment for reasonable discussion.
Towards An International Dialogue, supra n. 4.
 See Steven C. Salop and Jennifer E. Sturiale, Fixing “Litigating the Fix,” (forthcoming) (2023), available at https://scholarship.law.georgetown.edu/cgi/viewcontent.cgi?article=3488&context=facpub.