Behavioral Merger Remedies: Evaluation and Implications for Antitrust Enforcement

Abstract

The 2011 Antitrust Division Policy Guide to Merger Remedies offers a more favorable view of behavioral remedies relative to structural divestitures than past U.S. Department of Justice (DOJ) policy and practice. Moreover, some prominent recent merger cases at DOJ have been settled using behavioral remedies that permit the mergers to go forward subject to ongoing restrictions on the merged firm's conduct. This article raises some concerns about this policy shift. It notes that structural remedies preserve incentives for independent action by firms, whereas behavioral remedies can seek only to prevent firms from acting on their incentives. The difficulties with the latter approach are in some ways analogous to those associated with economic regulation, which seeks to constrain firm incentives and behavior. This article discusses that analogy, evaluates the application of behavioral remedies in the Ticketmaster-Live Nation, Google-ITA, and Comcast-NBC mergers, and concludes with some recommendations for future policy.