Transcript [00:03] Hello everyone and welcome to Fedsock [00:05] Forums. Today, September 15, 2026, we're [00:09] delighted to host a conversation [00:11] entitled Revisiting Philadelphia [00:13] National Bank, the structural [00:14] presumption and the future of merger [00:17] review. My name is Emma Blakemore and [00:19] I'm an associate director of practice [00:20] groups at the Federalist Society. As [00:23] always, please note that all expressions [00:24] of opinion are those of the experts on [00:26] today's call as the Federal Society [00:28] takes no position on particular legal or [00:31] public policy issues. We're very pleased [00:34] to welcome Michael Murray as our [00:35] moderator today. Mr. Murray is co-chair [00:38] of the antitrust and competition [00:39] practice at Paul Hastings and represents [00:42] clients in high stakes mergers and [00:43] acquisitions and antitrust litigation [00:45] and investigations. [00:47] Based in the firm's Washington DC [00:49] office, Michael is Chambers ranked and [00:51] brings significant government antitrust [00:53] and competition experience, having most [00:55] recently served as the princ principal [00:57] deputy assistant attorney general in the [00:59] antitrust division at the Department of [01:01] Justice, where he oversaw the work of [01:03] approximately 350 lawyers and 50 [01:06] economists. In that capacity, Michael [01:08] supervised DOJ's merger investigations, [01:11] uh, conduct matters, and litigation for [01:13] several years. I will leave it there, [01:16] but one last note throughout the panel. [01:18] If you have any questions, we ask that [01:20] you please submit them through the [01:22] question and answer feature below, not [01:24] the chat, so that we will have access to [01:25] them when we get to that portion of the [01:27] webinar. We do ask that questions [01:29] submitted there both pertain to this [01:30] discussion and end with a question mark. [01:33] And with that, thank you for being with [01:34] us today. And I will turn things over to [01:37] our speakers to start the conversation. [01:39] Thank you, Mr. Murray, for moderating. [01:41] >> Thank you, Emma. And I'm uh pleased to [01:43] be here today. This is a a really [01:45] all-star panel that we have with some of [01:47] the foremost uh thinkers and scholars [01:50] and practitioners in antitrust law today [01:53] uh with decades of experience discussing [01:55] the question that we're uh going to [01:57] discuss today. I'll do brief introduc [01:59] introductions, a quick level set on what [02:02] we're talking about and then jump right [02:03] in uh so that we can hear from our uh [02:05] our panelists. First, Debbie Feinstein's [02:08] one of the leading antitrust lawyers in [02:10] the country. She's a partner at Arnold [02:12] and Porter and she served in as the [02:14] director of the Bureau of Competition at [02:16] the FTC from 2013 to 2017. We also have [02:21] Judge Ginsburg uh who is a senior judge [02:24] on the DC circuit. He previously [02:26] previously served as assistant attorney [02:28] general of the antitrust division and is [02:30] of course an accomplished scholar and [02:32] professor at multiple universities. We [02:35] have Herb Herbert Hogenamp who's the [02:37] James G. Dynam University professor at [02:39] the University of Pennsylvania Law [02:40] School. The New York Times has called [02:42] him the dean of antitrust law and he's [02:45] authored numerous case books and [02:46] treatises on antitrust law. We also have [02:49] professor Daniel so who's the Carolyn [02:51] Craig Franklin chair in law and a [02:54] professor of law and business at the USC [02:56] gold school of law and Marshall School [02:58] of Business in the marketing department. [03:00] And last but not least, we have Rahul [03:02] Ralph who is a partner at Whit and Case. [03:04] He served as a deputy director at the [03:06] FTC from 2022 to 2025 and also in the [03:09] Washington State AG's office from 2018 [03:13] uh to 2022. I'd also like to thank [03:16] Satetana Gans for helping to organize uh [03:18] this panel. So today we're talking about [03:20] the Philadelphia National Bank case. [03:22] It's a 1963 Supreme Court case. It's [03:25] establishes a structural presumption. If [03:28] a merger creates a single entity [03:30] controlling 30% or more of the market, [03:32] it's legally presumed to lessen uh [03:34] competition in violation of section 7 of [03:36] the Clayton Act. Federal and state [03:38] enforcers have been challenging mergers, [03:40] relying on this presumption for uh quite [03:43] some time since at least since the [03:45] decision in ' 63, and certain state [03:47] attorneys generals have also relied on [03:48] it perhaps most recently in the [03:50] Paramount uh case. the 2023 guidelines [03:53] also cite the decision uh uh positively [03:57] and rely on it in um developing the [04:00] guidelines that came out in 2023. Today [04:03] we're going to talk about several topics [04:05] related to the case. Uh the first is [04:07] whether it's the right approach or not, [04:09] whether economic uh developments have [04:11] changed or whether uh uh Philadelphia [04:13] National Bank as originally conceived or [04:15] some version of it uh is the right [04:17] approach for antitrust law. Second, [04:19] we'll talk about uh what courts and [04:21] agencies should do in light of the [04:23] foregoing discussion. And third, uh for [04:25] those private practitioners on the line, [04:27] we'll talk about counseling private [04:28] parties uh given the the foregoing [04:31] discussion. And with that, I'll turn it [04:33] over first uh for the first question, [04:35] which is whether uh Philadelphia [04:38] National Bank or a version of [04:39] Philadelphia National Bank is the right [04:41] approach. I'll start with Professor [04:44] Hogenamp. Uh you've recently published a [04:47] uh a post on your Substack uh entitled [04:50] The Rehabilitation of Philadelphia [04:52] National Bank uh in which you state [04:54] among other things that recent [04:56] scholarship provides compelling evidence [04:58] of a correlation between increases in [05:00] concentration that result from a merger [05:03] and higher product prices. I'm wondering [05:05] if you could unpack that for a little [05:07] bit unpack uh that for us for for a [05:10] little bit and uh describe your your [05:11] recent thinking on Philadelphia National [05:13] Bank. Yeah, thank you and thank you very [05:16] much for inviting me to this panel. Uh, [05:18] [clears throat] Philadelphia Bank came [05:20] only one year after the Supreme [05:23] [clears throat] Court's decision in [05:24] Brown Shoe, but it dramatically turned [05:28] the direction of merger policy. Brown [05:30] Shoe had actually condemned a merger [05:33] because it resulted in lower prices that [05:35] undersold smaller rivals. and [05:38] Philadelphia Bank got [05:42] shifted course to focus on uh what the [05:46] then prevailing Harvard School regarded [05:48] as the true effects of higher [05:50] concentration which were higher profits [05:52] pri and prices stagnant markets and so [05:56] on and to do that the Philadelphia bank [06:00] decision actually developed two [06:02] different presumptions I'll just quote [06:04] it here uh the court spoke of a merger [06:07] that quote quote produces a firm [06:09] controlling an undue percentage of the [06:12] relevant market and results in a [06:15] significant increase in the [06:16] concentration of firms in that market. [06:19] So one was the absolute level of [06:22] concentration and the court held that [06:25] the 30% uh I'm sorry the uh the 30% [06:29] market share in the case satisfied that [06:33] the other one was the significant [06:35] increase in concentration. [06:37] uh the court didn't use the HHI which [06:40] was not in common use among u judges [06:44] judges and lawyers at that time but it [06:46] did use the two-firm concentration ratio [06:49] and found a significant uh increase. Now [06:53] what's happened to those two different [06:55] presumptions? Number one, the 30% [07:00] presumption, even though it's widely [07:02] associated with the Philadelphia bank [07:04] case, never really got a lot of [07:06] traction. Uh, Judge Ginsburg has written [07:10] about it, and I think he and I are in [07:12] agreement about that. The 30% uh [07:16] presumption was not mentioned in [07:18] previous editions of the merger [07:19] guidelines prior to 2023 when it was [07:23] revived and uh it didn't get a lot of [07:25] traction in the courts. On the other [07:27] hand, the requirement of a significant [07:30] increase in concentration [07:33] has it's mentioned in every single [07:36] edition of the merger guidelines [07:39] different numbers and different [07:41] guidelines, but nevertheless, it's [07:42] always been an important uh important [07:46] feature. uh and uh then uh oh roughly [07:52] three years ago we've now had a couple [07:54] of very important papers uh both of them [07:57] published in the American economics [07:59] review which is one of the top five [08:02] American uh economics journals uh who [08:06] have shown pretty persuasively [08:09] that there are high correlations [08:12] not with the absolute level of [08:14] concentration. So this is not a uh this [08:18] is not an improve mour on the 30% rule [08:22] but rather a high degree of [08:24] concentration between price increases [08:27] and the increase or the delta uh of of [08:31] concentration. [08:33] uh what Naki and Winston in the first [08:35] paper concluded [08:37] uh was that uh the current the then [08:42] existing merger guidelines those were [08:44] 2010 were too uh too conservative [08:48] because uh their concentration numbers [08:51] did not reach far enough uh and they've [08:56] more or less concluded that uh an HHI [09:01] increase of roughly a 00 points uh would [09:04] offset efficiency gains in the 2 to 3% [09:08] range. That is the question as they pose [09:11] it is how much efficiency gain is [09:14] necessary to offset a particular [09:18] increase in the HHI [09:22] uh and that's the number they came up [09:24] with. And then in this more recent study [09:26] that just came out in the American [09:28] Economic Review uh by Bacharia and a [09:32] group of his co-authors, they looked at [09:35] a fairly significant number of mergers, [09:37] nearly a hundred mergers in fairly [09:39] highly concentrated markets. And they [09:42] also found that there was really no good [09:44] concent uh correlation [09:47] between price increases and the absolute [09:50] level of concentration, but that there [09:53] was a pretty good correlation between [09:55] price increases and the change in [09:58] increases in concentration. So I I [10:01] regard that as a this as a a important [10:05] but yet rather early stage development. [10:09] Most merger retrospective studies have [10:12] looked at concentrated mainly on [10:14] absolute levels of concentration. I [10:17] think we need to spend a little bit more [10:19] time in the future looking at changes in [10:21] concentration. You can get that from [10:23] data in some of the retrospective [10:25] studies. Uh but it has the potential to [10:28] simplify merger litigation if you can [10:30] start focusing on you have to define a [10:33] market and compute market shares. But if [10:36] you can if you can focus on the increase [10:39] in concentration as between the merging [10:42] parties, we might get a reliable rule uh [10:46] that equates that change with predicted [10:50] price increases. Okay, now I know I've [10:52] gone a long time, but just one [10:54] concluding sentence. All of this is [10:56] premised on the idea that the principal [10:59] concern of merger policy is mergers that [11:03] threaten price increases. If we want to [11:06] challenge mergers for some other reason, [11:08] and we should, mergers that threaten to [11:11] reduce innovation uh or something like [11:14] that, then these studies don't speak as [11:16] directly to those types of conclusions. [11:20] Thank you. [11:21] >> Thank you, professor. So there was a [11:23] there was a lot in there uh to to to [11:25] further uh think about and I I'd first [11:27] like to turn to professor soil. Um I [11:30] know that several years ago you wrote uh [11:32] that your view was that Philadelphia [11:34] National Bank should evolve. Uh and I'm [11:36] curious if you think that some of these [11:38] recent studies that Professor Hovamp [11:40] mentioned and maybe other developments [11:41] as well are sort of consistent with that [11:43] view. Uh and and if you'd like to react [11:45] to to that. [11:46] >> Sure. So first of all, thank you. This [11:49] is actually the very first time I've [11:50] been a speaker at a Federalist Society [11:52] event. So, that's very exciting. Um, [11:56] a few thoughts. First of all, if [12:00] Philadelphia National Bank were to come [12:02] up today in front of the court, I I [12:04] think we could agree it it would not [12:06] come out the same way. There's a lot [12:08] more that we know and [12:11] some of the things that animated judges [12:13] in the 1960s is not what we think about [12:16] today. Do I think that there's some [12:18] aspects of it that are still very [12:20] useful? Actually, like Herb, I think the [12:22] answer is yes. Are there things that [12:24] still need to evolve? I think the answer [12:26] is also yes. So I so I'll give a I'll [12:30] give a defense to having a structural [12:32] presumption of some sort. It's a good [12:34] starting point um for analysis. Uh [12:38] unfortunately in the 60s it was a [12:40] starting and end point for the most [12:42] part. Um so if we think about [12:46] what does a presumption tell us? It [12:48] gives us a little bit of a road map for [12:51] um what's [12:53] safe, what might be contested, what and [12:56] and what might be highly contested, high [12:59] high risk. Uh and if we think from a [13:02] risk matrix type perspective, I think [13:05] business people want to have clarity. [13:08] That said, um does the 30% make sense? [13:12] No, you know, artificially low and all [13:16] of this also presumes that in the the [13:19] second part of the presumption in terms [13:21] of what the parties show entry for [13:23] example that that I think we have a lot [13:25] of clarity on. I actually feel that [13:28] unfortunately we still don't pay enough [13:30] attention to efficiencies. Now, there [13:32] are some times where uh merging parties [13:34] might invent efficiencies, but it it it [13:37] seems to me uh borne out by literally [13:40] since the year 2000 [13:43] um 185 different efficiency studies [13:47] across FT50 [13:49] journals plus strong uh IO journals like [13:54] RAND or JIE. [13:56] There's a lot more that we know about [13:58] how do we measure efficiencies? How do [14:00] we think about efficiencies? Uh that [14:02] hasn't really been embraced by the [14:05] agencies or the judges and because [14:08] the the kind of cases that involve [14:10] efficiencies are so rare that this [14:12] should be the the most important thing. [14:14] Um those are the deals that basically go [14:17] through. Uh so we don't have a good [14:19] sense of how to conceptualize [14:21] efficiencies. And I don't think that the [14:23] 2023 merger guidelines did a good job [14:26] with that. It certainly was not in line [14:28] with with what we know. Uh but it was [14:30] aspirational based on the the prior [14:32] administration. Where I think [14:34] Philadelphia National Bank [14:37] remains very helpful is thinking about [14:40] as as Herb said um the the increase for [14:45] for related reasons. We know also [14:47] there's another strand of literature [14:49] most recently covered by Ali Rakoglu and [14:53] Carl Shapiro saying we see rising [14:55] concentration. It's still unclear what [14:58] that means. The concentration itself is [15:00] not the problem. It's what happens. I [15:03] think as Herb rightly said um in more [15:07] concentrated markets with with the other [15:09] kinds of things that might happen [15:10] particularly on the price side. Herb is [15:12] also right that this is not a [15:14] particularly great proxy for measuring [15:16] innovation related effects. So does it [15:20] need to evolve? I think yes. I think [15:22] we've already seen re uh evolution over [15:24] the years. Uh I think Baker Hughes is [15:27] the most important evolution of [15:29] Philadelphia National Bank and I I [15:33] and I'd like to see further evolution [15:35] that reflects a little more business and [15:38] economics reality. Um and but I also [15:43] want to make very clear without this [15:45] kind of presumption where we set the [15:48] presumption I want to leave aside but [15:49] without presumptions it's hard for [15:51] judges and it's hard for the agencies [15:53] it's hard for the agencies to to really [15:55] bring cases uh when when there's a an uh [16:00] an asymmetry in terms of uh what what [16:04] they know and the and the resources that [16:06] they have relative to the merging [16:07] parties. And I think from that [16:09] standpoint, Philadelphia National Bank [16:11] has been a success. Now, it's just [16:13] pairing it back to sort of what it can [16:15] do. Well, [16:21] thanks, Professor So, that that's very [16:23] that's a a good tour, I think, of of [16:26] some what has happened in the past few [16:28] decades. Uh, Judge Ginsburg, I know that [16:30] you've been a long-term critic of [16:32] Philadelphia National Bank. Um the [16:34] article that caught my attention was [16:36] Philadelphia National Bank bad economics [16:38] bad law good riddance which was uh [16:40] eloquently titled I'm curious uh what do [16:43] you think of the recent scholarship uh [16:45] and professor soil and comment just at [16:49] the end that that the national bank has [16:50] been uh a success. Well, thank you, [16:53] Michael. [16:54] Pardon me. Now, look, the 30% [16:57] presumption is a product of its times [17:02] and particularly a derivative of the the [17:04] structured conduct performance paradigm. [17:07] Um, economists uh no longer go to [17:11] graduate school to learn the [17:14] structured conduct performance paradigm. [17:16] It's an historical relic. [17:19] And I was surprised to hear uh Professor [17:22] Hoven Camp say that it never really got [17:24] much traction because it didn't show up [17:28] in uh the merger guidelines uh until [17:31] recently. But it's been invoked by [17:34] [clears throat] 100 122 times by CA in [17:37] cases brought by the agencies um and [17:41] dispelled in only 16 times. It's been a [17:43] very powerful [17:46] uh aspect of uh of merger litigation. Um [17:52] from the from 82 through 92 guidelines [17:56] 97 2010 there was essentially a [18:00] bipartisan agreement that shares and [18:03] concentration matter less and direct [18:06] effects matter more. [18:08] And from that consensus emerged [18:11] empirical metrics that really made the [18:13] consensus possible. Empirical metrics [18:16] like um uh like uh gross upward pressure [18:21] uh pricing pressure diversion ratios uh [18:25] greater attention to natural experiments [18:27] where where that's possible. But this [18:30] bipartisan convention was abandoned in [18:33] the 2023 guidelines which reverted to [18:36] the structural u thresholds. Um [18:40] professor soal said 30% make sense? No. [18:44] He said well if it doesn't make sense [18:46] let's let's think about what we can do [18:49] that that does make sense. And I think [18:52] this is an important point that bears um [18:54] repeating from time to time. the the PNB [18:58] presumption is a rule of law. It's not [19:02] just a processing guideline for the [19:04] agencies as which as to which maybe it [19:06] would make some sense in terms of how [19:08] they allocate their investigative [19:10] resources, but it's a rule of law and [19:13] the agencies seem to have invited the [19:15] courts and everyone else to sort of [19:18] confuse the two. U PI briefs commonly uh [19:22] cite the presumption and offer evidence [19:25] of market shares uh and uh say now we've [19:29] made our primacasia case and and and [19:32] quite commonly succeed with that in a [19:34] pre PI context. Um so [19:40] the PNB presumption is sharebased. Okay. [19:44] And the share of the merged company as [19:47] professor Hovamp uh brought out talking [19:50] about undue concentration for that [19:52] combined share. Um [19:55] just keep in mind what it's saying. [19:57] observing that a post merger share is [20:00] going to exceed 30% implies that it's [20:03] more likely than not that civil [20:04] preponderance standard that it's that [20:07] it's anti-competitive and it just isn't [20:09] empirical evidence to support that. We [20:12] have better [20:14] techniques the agencies in particular [20:16] have better techniques and a better [20:18] understanding of the uh world than than [20:21] that implies. So we get this rigid [20:24] judicial shortcut that inappropriately [20:26] shifts the burden of proof of [20:28] production, pardon me, from where it [20:30] belongs with the agencies and the [20:32] private claims to the defendants. Um, by [20:36] the time the defendants are allowed to [20:38] rebut, the court has already been told [20:41] by the that they're that they're more [20:43] likely than not going to be to lose [20:46] this. Just think about this situation [20:48] without the presumption, right? The [20:50] plaintiff, the agencies bring in their [20:52] their best evidence, uh, market [20:55] definition, shares, hhis, documents, [20:58] guppies, unilateral effects, [21:00] efficiencies, whatever they think is [21:01] relevant to their case, and the [21:04] defendant responds in kind, and the [21:06] court weighs the totality of that [21:08] evidence. Without the presumption, the [21:11] party with the best evidence wins. No [21:13] one gets an early advantage in the [21:16] contest. [21:17] And the idea that plaintiffs typically [21:20] show up in court uh and the agencies [21:23] with more evidence than sharers and his [21:26] is really uh not helpful. They get the [21:29] presumption regardless of the evidence [21:32] that they actually produce. So it just [21:35] seems to me backward in the most obvious [21:38] ways to continue to rely on this. Now [21:41] her professor hoving camp has introduced [21:43] an interesting alternative based on some [21:46] research that is provisional let's say [21:49] or far from conclusive at this point. Um [21:51] and I have no problem with seeing that. [21:53] In fact I would like to see that [21:55] explored further in terms of what the [21:57] empirics actually show us. It may prove [22:00] useful and divert our attention to to [22:02] the delta in HHIS if that proves to be [22:06] more indicative. But a presumption is an [22:09] entirely different animal and it's one [22:11] that should be really foreign to the to [22:13] litigation over mergers. [22:17] Thanks Judge Judge Ginsburg. I think [22:19] you've introduced a couple additional um [22:21] topics that I suspect Debbie and Rahul [22:24] will want to react to. Um well maybe [22:27] we'll start with Debbie Debbie first. [22:29] One of the the things that I think [22:30] Professor Hoben mentioned was uh you [22:33] know what is the goal of merger policy? [22:35] How does this debate relate to that? Uh, [22:37] and I think that another topic that [22:39] we've been talking about is whether [22:40] there's parts of of of Philadelphia [22:42] National Bank that should be kept, other [22:45] parts perhaps should evolve. Uh, and I'm [22:47] curious based on your experience in [22:48] private practice, in government, how you [22:51] sort of react both for both of those two [22:53] ideas and frankly anything else that was [22:55] said by our Steve panelists. [22:57] >> Thanks. Well, it's a pleasure to be [22:59] here. Um, so I did um like Danny read [23:02] the two the two cases that I read this [23:04] morning. um were Philadelphia National [23:06] Bank and uh Baker Hughes uh because I do [23:09] think they they sort of um make the the [23:11] two points. So I would say this. So [23:13] first um neither at the FTC nor in [23:16] private practice do I utter the phrase [23:18] Philadelphia National Bank or [23:19] presumption or 30% to most clients. Um, [23:23] right? Because we all know that most uh [23:27] deals with a 30% market share don't get [23:30] looked at, don't get a second request, [23:32] aren't issues. Um, you know, usually [23:36] it's it's much higher market shares uh [23:39] than that. It is true that deals under [23:41] 30% rarely get blocked. That is [23:43] something that when we talk about 30%, [23:45] it's almost a safe harbor. Um I think [23:47] the two examples to the contrary that I [23:50] can think of are Hula Packer Juniper and [23:52] H&R Block. Those were both eminently 3 [23:56] to2 mergers once you agreed on them the [23:59] market definition which I'll get to in a [24:00] minute. They were three to two. So the [24:02] fact that the market share for the two [24:04] smaller companies, Baby Food's another [24:06] example of you know courts don't like [24:08] the argument that well the two smaller [24:10] guys in a 3 to2 market have to merge to [24:13] compete more aggressively against the [24:14] big guy. that's just not going to play [24:16] almost no matter what the market shares [24:19] uh are. So, those are the the rare [24:21] examples where deals under 30% get [24:23] blocked. Deals over 30%, I mean, like I [24:27] said, very few of them make it out of [24:29] the government to begin with, but those [24:31] that do, um, very mixed bag. And one of [24:34] the reason it's a very mixed bag is [24:36] because there's so often the 30% depends [24:40] on the government's market definition [24:42] which is often something that can be [24:44] debated and the government's uh uh [24:48] method of calculating those market [24:51] shares. And often courts will say I [24:54] don't buy the market definition. I don't [24:56] buy the calculation. they don't even [24:59] have to get to overcoming the [25:01] presumption because they're just looking [25:03] at the whole merger and the landscape [25:05] and the market and the shares a [25:07] completely different way. Um so how [25:12] important is the Philadelphia National [25:15] Bank presumption? It's still sort of [25:17] important. Um you see that it's much [25:19] harder to bring potential competition [25:21] cases and vertical cases. You don't have [25:22] that anchoring for the courts. um uh the [25:27] the government if they convince the [25:30] judge that the market definition is [25:32] right and convince them that the shares [25:34] are over 30%. They win the vast majority [25:38] of those cases. It is harder to find the [25:40] cases uh where uh the over the [25:44] presumption is overcome. Now is that [25:46] because I really think that the judges [25:48] are relying on the Philadelphia National [25:50] Bank presumption? I'm not sure I that I [25:52] really think that. I think it's because [25:55] when the government brings a case that's [25:57] just slightly above 30%, you know, if [25:59] it's above 50 or 60%, those are easy [26:01] cases to bring. But if it's 30 or 40%, [26:04] is it the presumption? No, it's all the [26:07] other evidence that's going into it. [26:09] When I first got to the FTC, [26:11] Commissioner Wright sort of publicly [26:13] said, you know, Debbie, you're the [26:15] bureau director. Will you promise me [26:17] that you won't site Philadelphia [26:18] National Bank? And I said, I will not [26:20] promise that. it is, you know, the law [26:22] of the land is the Supreme Court said [26:24] it. But I will promise you this that [26:26] it'll be a paragraph and that the rest [26:29] of the brief will be about the [26:30] anti-competitive effects of the merger. [26:33] It will be about the evidence of [26:35] head-to-head closeness of competition, [26:38] the evidence that there are entry [26:39] barriers, the evidence that there are, [26:41] you know, strong documents and the [26:43] evidence that uh customers are [26:46] concerned. you know, concentration is [26:48] really only a small part of this. In [26:51] fact, the first time I was at the FDC, [26:53] one of the um senior managers said, [26:55] "Look, to really build an antitrust [26:57] merger case, you need three legs to the [26:59] stools, the three ages. Higher herd [27:02] dolls, high documents, hostile [27:04] customers." And I think the latter two [27:07] kind of help inform the market [27:09] definition in the shares in a way that [27:12] if you didn't have the national [27:13] Philadelphia national bank presumption, [27:15] do I still think that the government [27:16] could win the cases that it has won? [27:18] Yes. It's just kind of a comfortable [27:20] framework. Just like I think market [27:23] definition is a comfortable framework as [27:26] a starting point to kind of get people's [27:28] heads in the right places even though um [27:31] you can often show that a market is [27:34] problematic without relying on market [27:36] definition as such and in fact the [27:38] agency often does that they decide [27:40] there's a problem then it's like okay [27:41] how should we talk about the market [27:42] definition because we have to do that [27:44] for a court. [27:46] >> Thanks Debbie. Uh that that's very [27:48] interesting. I wanted to turn to to [27:50] Rahul as another one of our private [27:52] practitioners to to comment both on what [27:54] what Debbie just said and also if you [27:56] want to pull in your state ag experience [27:58] as well and I I think the 2023 merger [28:01] guidelines have been getting a little [28:02] bit of a discussion the various [28:04] panelists. I suspect you were uh uh have [28:07] a view on that as well given the the the [28:10] tenure of your service. [28:11] >> Yeah. No well Mike thanks for u the [28:14] question and thank you for uh having me [28:16] on this panel. Um, a a lot of what I'm [28:19] going to say is actually you're going to [28:20] hear u we already virtual speaker you [28:23] know uh I want to just start with just [28:26] like level setting where uh the [28:28] conversation that was heard earlier [28:30] between kind of Danny Herb Ginsbury. Um [28:34] I think that's a that's a really [28:35] important debate. Uh it's a it's a [28:37] really important debate that captures [28:40] really important policy questions of [28:42] what are we trying to achieve with [28:44] merger control regimes? How do we [28:46] achieve that? Um, do we focus are we [28:48] only focused on prices and output? Do we [28:51] care more about holistic anamorphous [28:53] concerns about concentrated power which [28:55] could include political or social [28:57] effects or is there something else? And [29:00] I think those are those are valid [29:01] questions for policy makers to grapple [29:04] with and and they're questions where uh [29:07] people are going to fall on different [29:08] points on on the spectrum. Uh but as a [29:12] former former federal and state enforcer [29:16] uh I do want to also ground this [29:18] conversation from an enforcement vantage [29:21] and uh I think I want to start with you [29:24] know uh recognizing that there is a [29:25] difference between crafting policy and [29:28] enforcing the law. So when I was at the [29:30] Bureau of Complications when I was in [29:31] the state a's office we were very [29:34] intentional about not calling ourselves [29:36] regulators. You know we prefer the firm [29:38] enforcers. We enforce the laws as it [29:41] exists. We don't regulate markets [29:44] according to what we prefer them to look [29:45] like. That is a job for others. And so [29:48] at the end of the day, Philadelphia [29:51] National Bank, as old as it may be, as [29:53] reliant as it may be on outdated [29:55] economic thinking, it's still good law. [29:58] And as Supreme Court, it's still [30:01] controlling law. Neither the Supreme [30:03] Court nor Congress has overturned it. So [30:06] even if you think sharebased or [30:08] concentration based metrics are an [30:11] imprecise or even an outdated or or [30:15] incorrect economic proxy for predicting [30:17] merger harm, that critique doesn't [30:20] entirely capture the doctrine's legal [30:22] relevant. Uh so until Congress or the [30:27] Supreme Court overturns Philadelphia [30:28] National Banks, I think you're going to [30:30] you're going to continue to see [30:31] enforcers apply it. That said, as a [30:36] practical matter, this is, you know, I'm [30:38] going to uh build on something Debbie [30:40] had just mentioned is I really doubt [30:42] that you will see an agency, at least a [30:44] federal agency, rest the states solely [30:48] on fraudulent affair or Hback. Uh [30:51] they're not going to do it without some [30:52] allegation of concrete armed attack. And [30:56] that's not about doctrine or policy. [30:59] That's about, at least for me, that's [31:01] about litigation strategy, right? [31:03] Litigation the end of the day is a [31:05] storytelling episode and a compelling [31:08] story needs something tangible for the [31:10] reader to connect with and in this [31:12] context that's that's something like [31:14] price effects it's something like wage [31:16] effects or reduced output judges [31:18] especially lay judges uh they understand [31:20] that hhis they're they're kind of harder [31:23] to internalize so while the presumption [31:27] does real legal work right it shifts the [31:29] initial burden it I think it's not how [31:32] agencies receives tax date for winning [31:34] murder statements. Uh now I was looking [31:37] I didn't I didn't read Philadelphia back [31:39] this morning. Uh but the description of [31:41] today's panel did mention the Paramount [31:43] Warner Brothers complaint. Uh and I [31:46] looked at that that complaint and I [31:48] think that's actually a pretty clean [31:49] illustration of of this narrative focus. [31:52] Right? The states open with the [31:54] structural presumption but then they [31:57] plead separate unilateral effects. uh [31:59] they also plead uh coordinated facts. Uh [32:03] and so that's the storytelling [32:04] architecture at work. It's it's giving [32:06] the tryer effect room to not have to [32:09] rely solely on APHI with theirs. And and [32:12] now I also want to also build on [32:15] something Danny had mentioned. Uh [32:17] relying on these structural presumptions [32:20] even if they may be outdated. I'm I'm [32:22] not entirely convinced that's a bad [32:24] thing. You know, more than anything, and [32:27] this is from a private practice [32:28] perspective, [32:30] businesses and markets need [32:32] predictability uh for as much of it as [32:35] things that can be like reasonably [32:36] achieved. And so, a bright line [32:38] structural presumption gives merging [32:41] parties a clear threshold to plan [32:43] around. I mean, that's that's valuable [32:45] even if if uh if it is not a perfect [32:48] predictor of of competitive harm. So um [32:52] at the end of the day uh some benchmark [32:55] to guide businesses is better than not. [32:59] >> Yeah. Can I just one minute disagree on [33:01] that? Um given how few cases are brought [33:05] at 30% and given how few cases are [33:07] brought with the numbers of the new [33:09] guidelines, I actually think it was a [33:11] step backward in suggesting that a whole [33:13] bunch of mergers are problems that none [33:16] of the administrations have brought [33:17] cases under. So I I actually um think [33:21] that the Philadelphia National Bank [33:22] presumption is what it is, but the [33:24] guidelines uh need to give, you know, [33:26] better better guidance to businesses [33:29] than they do now. [33:32] >> So one of the questions in the chat [33:34] actually kind of gets at this question [33:36] about the 30% specifically and I thought [33:38] I would would pose it uh maybe to [33:40] Professor Hoben first and then and for [33:42] others partly because I think it's a [33:44] good question, partly because I like to [33:45] encourage questions in the chat. Uh and [33:47] so the question from the from the [33:49] audience is if 30% isn't the right [33:51] number and I think Debbie you were just [33:53] expressing that 30% is way too low and [33:55] we heard that from others on the panel [33:56] as well. Is there a number that is [34:00] appropriate as either a screening [34:01] mechanism or the right approach uh and [34:04] and that that a guideline uh or I [34:08] suppose a court uh should adopt. [34:12] Well, [34:14] if you take these this recent research [34:17] seriously, [34:19] any number that expresses the market [34:22] share of the post merger firm is the [34:25] wrong number. That's not what we should [34:28] be looking at. What we should be looking [34:30] at, remember the merger, the statute [34:34] requires a change. It says a merger must [34:37] lessen competition. [34:39] And uh one of the points that Naki and [34:43] Winston make is you know what what we're [34:46] trying to measure is what changes as a [34:49] result of the merger and for that the [34:51] important number is the increase in [34:54] concentration. Both of these studies [34:57] find no correlation between the absolute [34:59] amount of cor of concentration [35:02] and uh and uh [35:07] and and mer and price increases. The the [35:09] correlation is between the amount of the [35:12] increase. I think that's the [35:14] presumption. I'd be fine dropping the [35:17] 30% rule from Philadelphia Bank, but [35:20] focusing more closely on the amount of [35:23] the increase. Now there are other [35:25] concerns for example the Sherman Act [35:28] which condemns mergers to monopoly. So [35:30] you certainly might want to have a rule [35:32] that says uh that a merger that creates [35:36] a 60% firm might be unlawful on the [35:40] basis of absolute concentration. Uh but [35:44] uh in the r in the enforcement range [35:47] where most merger enforcement goes on, [35:49] both both of these studies, by the way, [35:51] looked at mergers that survived [35:54] scrutiny. They're they're in [35:56] concentrated markets, but they're all [35:58] mergers that actually occurred. So, they [36:00] weren't successfully challenged. And uh [36:03] and so looking back at those, both [36:06] studies find we tend to under enforce in [36:08] that range. in that range, you know, [36:12] where most mergers are challenged and [36:14] that the biggest price changes occur uh [36:19] as the as the amount of concentration [36:21] goes up. So, I think we need I just [36:24] think we need to stop thinking about the [36:25] 30% rule and think about the amount of [36:28] the increase. [36:32] >> Michael, if I may. [36:33] >> Yes, of course. Um well I'm glad to hear [36:36] um Herb saying that the forget about the [36:39] 30% rule and look at something that [36:41] might be more productive. Um I just [36:45] think it's at this early stage I [36:48] wouldn't put um much stock in the papers [36:52] that we have. The Nakia Winston paper in [36:55] particular u it's interesting but it's a [36:58] theoretical exercise in in merger [37:01] simulation models looks at possible [37:04] mergers between different brands of beer [37:06] in a highly regulated environment. one [37:09] in which the uh vertical integration in [37:11] most of the states is is prohibited and [37:13] it's a peculiar market and in itself for [37:17] that reason. Um, so fine, they've got [37:20] something that's suggestive and I hope [37:22] there'll be more research uh following [37:25] it up. But just bear in mind about as [37:28] long as we do have the 30% presumption, [37:31] judges take presumptions like the rest [37:34] of the law very seriously. And the [37:37] agency can come in and of course it's [37:39] going to say more than 30%. It's going [37:40] to talk about its market definition at [37:43] the very least and maybe something more. [37:46] But nonetheless, the mindset is that for [37:49] its judge that this is presumptively [37:52] unlawful and the defendant's going to [37:55] have to find its way out of this to [37:58] convince us that this is not not [38:00] actually harmful. And [38:03] we're used to dealing with presumptions. [38:06] Usually the presumptions are ones that [38:08] are are well tested, tried and true. the [38:11] presumption of innocence in in a [38:12] criminal matter, the presumption of [38:14] regularity in administrative affairs, [38:16] things of that sort that shift the [38:18] burden or define the burden of [38:21] production. Uh and so it's it's not a [38:24] small matter that this presumption still [38:27] exists and is invoked regularly uh by [38:30] the agencies. So I mentioned uh 116 [38:34] times since uh since it was uh decided. [38:38] It's actually been cited in 167 of the [38:41] government's briefs but actually relied [38:43] upon in in 122 of them and it's very [38:48] effective. It does what Debbie talked [38:50] about that creating a mindset is is key [38:54] and this does so in a way that's just [38:56] unfounded. [39:02] Thanks, Judge Ginsburg. Uh, I wanted to [39:04] shift gears a little bit and maybe pull [39:06] on something a little bit of what Judge [39:08] Ginsburg said and then I think also what [39:09] Professor Zel said about uh the Supreme [39:13] Court, courts in general and agencies. [39:15] So, it seems that we've been talking to [39:17] some extent more explicitly on what the [39:20] right approach should be uh as opposed [39:22] to perhaps a screening mechanism or a [39:24] rule of decision. Although Judge [39:26] Ginsburg's comments just now brought out [39:28] the idea of a presumption versus uh sort [39:31] of a substantive rule of decision, I [39:33] thought perhaps we'd start with [39:34] Professor Soal. I know you mentioned you [39:36] think the Supreme Court might come out [39:37] the other way. I guess there's another [39:39] question as to whether this case, this [39:41] type of issue would ever get back up to [39:42] the Supreme Court, which is a given how [39:44] merger litigation goes. But I'm curious [39:47] if you have a view regarding the issue [39:49] of the of something like Philadelphia [39:51] National Bank as a screening mechanism [39:53] as something that agencies or courts use [39:56] as opposed to the actual you know [39:58] ultimate ultimate question. [40:01] >> So um let me handle both those [40:06] on how it would come out. I [40:09] I I [40:11] have 99% certainty it would not come out [40:15] the same way today and I think most [40:17] commentators would agree with me on [40:19] that. Um [40:22] there are two issues that you raised. [40:24] One is one sort of gets to sort of the [40:26] screening mechanism. I agree that's [40:29] essentially what it's there for. I also [40:30] agree with Debbie, which is that [40:34] some judges, they kind of know where [40:37] they want to come out and they're going [40:38] to find whichever mechanism necessary to [40:42] get to the outcome that they want. But [40:45] overall, it would it be useful it was a [40:48] if it was a more effective screening [40:50] mechanism? Yes. But frankly, that's what [40:52] the merchant guidelines should be there [40:54] for to be giving that kind of certainty. [40:57] Uh, and [41:06] I think the the 2000 guidelines are [41:11] difficult uh to provide that level of [41:14] certainty. I we could have a whole [41:16] another session on on what it did well [41:19] and the many things that it did less [41:22] well. Um, I think though that [41:26] we wouldn't have had merger guidelines [41:28] if we didn't have a case like a [41:30] Philadelphia National Bank. But I think [41:32] you raise another question which is a [41:34] really important one which is why don't [41:36] we see merger litigation that goes all [41:37] the way to the Supreme Court. Um, it [41:43] it's 50 years since we've seen [41:46] substantive Supreme Court antitrust [41:48] merger cases. [41:52] It might be time, but the incentives are [41:54] often not in favor of firms to push uh [41:58] aggressively to get it in front of the [41:59] court to show that the court has uh that [42:03] that it should be of interest to the [42:05] court. But I think we are in desperate [42:07] need uh of of that. Um and and I'll just [42:11] leave it at that. [42:14] >> That ain't going to happen, Danny. [42:17] But there's a but it's because a very [42:19] specific reason. The antitrust [42:21] expediting act was essentially repealed [42:24] as a part of the Tony Acts. [42:27] So it's not it's just not not practical [42:29] for these deals to hang around waiting [42:31] for the Supreme Court. Um in in the [42:34] Montford of Colorado case when I was [42:35] assistant attorney general, I called the [42:38] lawyer for the company of my new and [42:41] said um why are we in the Supreme Court [42:43] on a $15 million deal? And the answer [42:46] was it was a fluke. Local council forgot [42:48] to provide we get our money back. [42:52] So, you know, that's the only kind of [42:53] thing that's ever going to get it to the [42:54] Supreme Court and just can't count on [42:56] that ever happening. [42:58] >> Oh, they would come if the government [43:00] lost and then won on appeal. Uh because [43:03] then the parties do have an incentive. [43:05] They've already closed their deal. Uh [43:07] and they can continue. Uh so that's the [43:10] kind of case uh where you could see um [43:14] uh it going to the the Supreme Court. I [43:16] can think of a couple um that would have [43:19] gone to the Supreme Court if uh uh you [43:23] know um the the government had decided [43:25] to keep pursuing it after losing a [43:27] circuit court opinion. That's the way it [43:29] would get to the Supreme Court if if the [43:31] the parties won the first time and then [43:33] the government won the neck at the [43:35] appeal appellet level um and decided to [43:38] to one of them decided to keep or and [43:41] then the parties decided to um uh fight [43:44] that. [43:46] But there just haven't been very many [43:48] like that. [43:50] >> Yes. I guess we'll see. It's uh it'll be [43:52] interesting to see. We have a lot of [43:54] litigation going on right now. uh and [43:56] some of which is the folks you're are [43:58] involved with. So I guess we'll see if [43:59] some of those defy the the trend and uh [44:03] or not. Another example like Judge um [44:05] Ginsburg uh just gave there was there's [44:08] one other um concept that I think was [44:12] pulled out uh and I forgetting actually [44:15] who mentioned it. Uh but there's the [44:17] role of the Supreme Court. There's the [44:18] role of the agencies. Obviously, there's [44:20] another player in antitrust law that we [44:23] occasionally comes up and Judge Ginsburg [44:25] just mentioned it about the Tony Act. [44:27] Uh, and that's Congress. And I'm curious [44:29] if there there's anyone on the panel who [44:32] thinks that this type of issue is up uh [44:35] and and ripe for a congressional [44:38] resolution, whether that would be a good [44:39] intervention, a bad intervention uh uh [44:42] on that particular issue. Maybe we'll [44:44] start with Rahul and and and and go from [44:46] from there. [44:48] I mean it would be uh at least an [44:52] appropriate forum for map and I'll just [44:54] be I'll be frank in my criticism that I [44:58] think Congress is you know not the most [45:00] functional at the moment. So I wouldn't [45:02] uh I wouldn't bet a lot of money on uh [45:07] there being a resolution or or like a [45:10] good one out of the process today. But [45:13] that's not to say that, you know, [45:15] Congress conceptually doesn't have an [45:18] important role to play here. [45:23] >> Just open that up if any others have uh [45:25] thoughts on the politics. [45:26] >> Yeah, I have a thought or two. Um I [45:29] don't think this is a good issue for [45:30] Congress to take on right now. It it [45:33] would be too political. There would be [45:35] too many interest groups involved. What [45:38] we've seen in the state level has been [45:42] more in the direction of using antitrust [45:45] law to protect competitors rather than [45:47] consumers. [45:49] Uh I just think there's so many sideways [45:52] directions that could go that it would [45:54] be it would be risky. Uh the real [45:56] problem is of course how to interpret [45:59] the may substantially lessen competition [46:02] standard. Uh, and uh, I think any [46:07] guidance Congress could give on that [46:09] would probably end up doing more harm [46:11] than good. [46:15] >> What I've noticed in the uh, attendee [46:18] list that we have quite a few private [46:19] practitioners in the list as well as uh, [46:22] different members of the bar, academy, [46:24] etc. One question I wanted to pose to [46:27] and maybe I'll start with Judge Ginsburg [46:28] and then move over to to Debbie uh, [46:31] Feinstein. Um, we've talked a little bit [46:33] about how these how the presumption [46:37] works in practice, whether it's in the [46:38] courts, whether it's in uh private [46:41] practice, whether it's in the agencies. [46:42] What is the best way um to sort of [46:46] advise uh and recognize judge? Maybe [46:48] you're not doing the advising, but [46:49] you're the person that maybe the the [46:51] case comes would have come before [46:53] private parties given the current state [46:56] of the law and scholarship and uh agency [46:59] practice. When thinking about um the the [47:03] presumption, I know you mentioned Judge [47:04] Ginsburg, there's I thought you said 166 [47:07] citations and agency uh pleadings um and [47:12] uh to the to the presumption. Uh and I'm [47:14] curious how you think that that should [47:16] affect how merging parties should think [47:18] about uh their deals. [47:21] >> Well, I think I mean it's been a long [47:24] time since I've been advising clients. [47:27] Um I I think any lawyer has got to be uh [47:32] frankly skittish about any deal that [47:35] crosses the that 30% threshold for the [47:37] merged company. Now maybe not based on [47:40] what Debbie was saying. Maybe only a few [47:42] of those get challenged. Um I'd like to [47:45] know more about that if I were advising. [47:48] >> Yeah. Yeah. So why don't we turn to [47:50] Debbie just to to spell out a little bit [47:52] more about what you had said before [47:53] about uh your view on on how how the [47:56] boardroom should think about uh the 30% [47:59] number [48:00] >> or the generally [48:01] >> I think there are so many other factors [48:04] they should think about more it's not [48:06] the first I mean I might ask about [48:07] shares sure because of course you would [48:09] but my first question is how are [48:11] customers going to react to this? How do [48:13] you run into each other in the [48:14] marketplace? How do you compete? Do you [48:16] compete for the same customers? There's [48:18] a whole bunch of questions that I ask [48:21] before I ask what are the market shares. [48:24] The FTC used to put out this document [48:27] which I thought was so useful and I wish [48:29] they would do it again. Um, which was uh [48:33] an economist went through all the memos [48:36] uh that were sent up to the commission [48:38] about murderers and he categorized them. [48:41] How many of them were 2:1 ones, 3:2s, 4 [48:44] to 3es, you know, in terms of [48:45] substantial number of competitors. he [48:47] would look at the shares. Um, but that [48:49] was kind of subsidi. It was just one of [48:51] many factors. Were there a lot of hot [48:53] documents? Were there a lot of customer [48:56] uh complaints? A whole bunch of other [48:58] things. And what I found that I remember [49:01] in terms of what I tell clients and I do [49:03] today because I remember that is I talk [49:06] about the number of meaningful [49:07] competitors much more often than I talk [49:09] about the shares. If it's a two to one, [49:12] I got one of those through once. It was [49:13] a very unique circumstance. it was a [49:16] potential competition case. Two to one's [49:18] generally don't get through. 3 to2s [49:20] generally don't get through. Four to [49:22] three is the evidence showed that it was [49:24] 50/50 and then you go on from there. [49:26] That was much more helpful to me than [49:28] the shares because shares alone don't [49:30] tell you anything as as I think [49:31] professor Hovamp said. It's like how [49:33] much is it increasing? Right? 28 plus [49:36] two is very different than 15 and 15 [49:39] when the other competitors are 60 and [49:42] whatever the rest is. Um, you know, [49:45] there's all of those factors matter a [49:47] lot more to me than what are the merging [49:49] party shares. [49:53] >> Thanks, Debbie. Uh, Professor So, I saw [49:56] that you were nodding vigorously, [49:58] drawing what Debbie was saying, so I [50:00] thought I'd give you an opportunity to [50:01] weigh in on that. I know that you're [50:03] teaching in the law school and you're [50:04] also teaching in the business school. [50:06] And so, you're you're you're crafting [50:08] young minds in an AI era. uh and I'm [50:10] curious how uh you would you would [50:13] propose this to uh for for thinking [50:16] about for those contemplating [50:17] transactions. [50:19] >> So I think first of all Debbie's an [50:21] amazing lawyer. Um and I would always [50:24] want her representing me. Um [50:29] I think there I I think she's right. Uh [50:31] I think there are a lot of factors and [50:33] you look across all the different risks [50:35] and all the different things that [50:36] matter. Uh I think in practice we we see [50:42] this already happening and it's been [50:44] happening for decades the but I think [50:48] that overall having certain cases helps [50:52] anchor the debate on certain issues uh [50:55] for for that very very difficult [50:57] conversation where the parties andor the [51:00] agency say I guess we're going to in [51:02] court and the question is are we [51:04] anchoring on the right kind of uh [51:08] presumptions and and here I think [51:13] we do need to fix some things but [51:14] overall [51:18] we do need to have that kind of anchor [51:20] where we have a credible threat. [51:23] [snorts] [51:23] Um but it needs to be a nuanced and well [51:27] thoughtout uh set of discussions. Uh it [51:31] matters for credibility of the agencies. [51:33] It matters in front of the courts, but [51:34] frankly, it also matters to to the [51:37] executives proposing these deals and [51:38] negotiating them. [snorts] [51:42] >> Great. Thank you. I think we have uh [51:44] time for just any last closing remarks [51:48] or thoughts or reflections before we [51:50] wrap up at the end of the hour. Uh and [51:52] so, uh of course, welcome to pass, but I [51:56] thought I'd start with Professor [51:56] Hopenamp and then we'll go around [51:58] virtually in my in my circle. [52:01] >> Yeah. Just one thing to follow up on [52:03] what something Debbie said a minute ago. [52:06] You know, one message of this recent [52:09] scholarship is you can't throw all three [52:11] to two mergers or all four to three [52:13] mergers [52:15] into the same boat. Uh if you're looking [52:18] at the amount of the increase, it makes [52:20] a whole lot of difference what the [52:21] relative size of the merging firms are. [52:24] There's a whole lot of difference [52:25] between a merger of two uh 20% firms [52:30] which produces a huge increase in the [52:33] HHI or a merger of a 39% firm and a 1% [52:38] firm which uh still give you the same [52:41] market share but only a very small [52:44] increase and those kinds of pairs of [52:46] mergers need to be valuated [52:49] uh differently. [52:54] >> [clears throat] [52:54] >> to think that uh every 3 to2 merger [52:57] involves some kind of unique story. [53:02] It's almost unimaginable otherwise. I [53:04] had one when I was a a [53:07] three firms involved in uh very close [53:10] rivals in desktop quotation systems. One [53:15] of them uh it was definitively shown the [53:18] first was acquiring the third as I [53:20] recall. In any event, the uh the the the [53:23] odd man out, not in the that was being [53:25] acquired had not invested in the [53:28] technology that the other two had. It [53:30] was going to be out of the business one [53:32] way or another within a couple of years. [53:34] And the acquiring firm basically wanted [53:36] to have a be able to smoothly take a [53:41] shot at their customers, but it was [53:43] going to be two no matter what. [53:46] That's that's a you know unusual story [53:48] to be say the least. [53:50] >> Yeah. Yeah. Yeah. Debbie, I I think [53:53] Professor Hos Hovenam just said you're [53:55] too cautious in uh some of your advice. [53:59] So I'll let you respond on the 3 to2 [54:01] merger point. [54:03] >> Look, I said that the government mostly [54:06] does it uh mostly does it. uh 3 to2s are [54:09] are mostly a problem and most 3:22s do [54:12] get challenged um even if the share is [54:15] below 30%. So I think whether or not [54:18] they should be is a different question [54:21] than whether I should be advising [54:22] clients um that if they're doing a 3 to2 [54:26] merger they should be looking at a long [54:28] long battle. [54:30] >> Yeah. And uh Rahul and then we'll close [54:32] with Danny. Uh yeah, I'll just be really [54:35] clear and I think it's the I think [54:37] there's a very important conversation [54:38] about whether these presumptions make [54:40] sense. I think it's a practical matter. [54:43] I don't think they're going that it's a [54:45] reality that you know going to have to [54:48] deal with now and I agree with Debbie [54:49] that I don't think is going to challenge [54:51] something that's a 31% market share. U [54:55] but you're still going to use as a [54:57] rhetorical device, right? that this [54:59] North is 50 times more, you know, [55:02] whatever bigger than the threshold on [55:04] the H5 or something. So, uh, it's not [55:07] going anywhere. [55:08] >> Yep. And last word out from the West [55:11] Coast. [55:15] >> Thank you. Um, [55:20] if I recall, Bourke himself [55:25] set the limit at [55:28] four to three as the important merger [55:30] justification. Here we're talking about [55:33] 3 to2. Um, I [55:38] I think that is a tough slog. Um, but [55:42] again, this is where competitive effects [55:43] matter. This is where I have a lot of [55:45] sympathy for Judge Ginsburgg and his [55:48] view of like what do the economics show? [55:50] The economics show that there are a lot [55:51] of other things that matter too. Uh and [55:54] we should be focusing on that. This is [55:56] just in some ways [55:59] a first step, but god forbid it should [56:02] be the final step. And I think that's my [56:04] my big takeaway. merger control should [56:07] not begin and end with uh h how do we [56:12] define the market and do we have do we [56:14] hit 30% or something like that that's [56:18] inconsistent with merger practice with [56:20] the economics and frankly with how even [56:23] the ICN thinks about uh these issues [56:26] simply as a first step in terms of [56:28] global best practices and I think we [56:31] just need to keep that in in mind. [56:34] >> Thank you. Thank you for all the [56:36] panelists. Uh this has been a great [56:38] discussion that I was um very honored to [56:40] uh attempt to facilitate. I'm going to [56:43] turn it back over for em to Emma for uh [56:45] concluding the remark. [56:47] >> Thanks, Michael. On behalf of the [56:49] Federal Society, I want to thank our [56:51] experts for the benefit of their [56:52] valuable time and expertise today. I [56:54] also want to thank you, our audience, [56:56] for joining and participating. We also [56:58] welcome listener feedback if you have [57:00] any by email at [57:01] fedsockforumsfedsock.org. [57:04] As always, please keep an eye on our [57:06] website and on your emails for any [57:08] announcements about upcoming virtual [57:09] events. Thank you all again for joining [57:11] us today and we are adjourned.
