The Evolution of Merger Enforcement Intensity: What Do the Data Show?

Abstract

A growing narrative has arisen that antitrust regulators have systematically relaxed enforcement over time. This narrative has led to calls for reinvigorated enforcement and the passage of new tougher antitrust legislation. In this paper, we employ data drawn directly from the antitrust agencies to examine this claim. Data collected from 1979 to 2017 indicate that, contrary to the popular narrative, regulators have become more likely to challenge proposed mergers over time. Controlling for the number of merger proposals submitted to the agencies, the likelihood of a merger challenge has more than doubled over this period. After remaining relatively constant over previous administrations, merger enforcement intensity (MEI) rose in the G.W. Bush and even more so in the Obama administrations. The data also reveal that MEI is positively influenced by the agency budget size. Were historical enforcement tendencies to continue, a ten percent increase in the agencies’ budgets would yield an eight percent increase in merger challenges. This finding suggests that, independent of any statutory changes to existing antitrust laws, variation in agency budgets provides a viable pathway to enhanced merger enforcement.