The U.S. antitrust agencies, particularly the FTC, have announced that their work is “just getting started” as they show a growing antipathy towards mergers and economic growth through acquisitions. Business leaders and policymakers are sounding the alarm that these efforts could have a chilling effect on small businesses, consumers, and the entire U.S. innovation economy. 

Here’s what you need to know: 

The FTC’s policies are especially harmful to innovative small businesses.

— The FTC’s anti-merger policies actively work against small-business startups, Ken Griffin, the founder and CEO of the investment firm Citadel Securities, told CNBC last week. He explains: “One of the key ways that venture-capital businesses actually realize their full potential is when they are bought by large companies that have the distribution and scale to really capitalize on the innovation that was built. So the FTC’s adamant anti-merger stance is really reducing the efficiency of capital formation in the United States.”

— Griffin’s statement echoed the concern for startups that Small Business and Entrepreneurship Council CEO Karen Kerrigan expressed last summer.  “Competition is flourishing and many new businesses and entrepreneurs have big dreams to vastly scale and take their innovations national or global. These startups and innovative businesses often partner and merge with larger companies to connect with the capital, resources and talent they need to scale and bring their innovations to the mass marketplace. It is hard to see how any, any small business or startup will have the opportunity to merge or be acquired given these proposed set of guidelines.”

The FTC’s approach ignores established economic principles and stifles business activity.

— Peter Orszag, who directed the Office of Management and Budget in the Obama administration, recently observed that the FTC’s “big is bad” movement has been a “headwind” to important business merger activity. He said that the headwind has lifted somewhat as courts reassert what antitrust law says, not what the FTC alleges. “There have been a series of court losses,” he notes, and the courts, not the FTC, “are the ones that are going to be interpreting the law; none of the laws here have changed.”

— Research suggests that mergers and company growth are a natural part of economic efficiency, Orszag pointed out in a 2023 conversation with Lina Khan. “[Economics professor] Nick Bloom at Stanford, along with others, has done research into… what leads to some firms outperforming and gaining market share, and what he would say is… better management teams [and] better use of technology can lead to growth and often lead to benefits from mergers.” 

— The FTC’s approach toward mergers also doesn’t prioritize consumers and is “almost like a war on business,” former Clinton administration treasury secretary Larry Summers told Bloomberg last summer. “[The FTC’s merger] guidelines—by moving away from an emphasis on lower prices for consumers to broader abstractions—are a substantial risk. I wish that this stepping back and offering merger guidelines had been taken as an opportunity to rationalize the policy.”

The FTC’s stance toward mergers and acquisitions is made worse by policies that threaten American international business competitiveness.

— In Chair Khan’s testimony before the House Appropriations Committee this week, Representative Ashley Hinson (IA-02) raised concerns that the FTC has supported digital trade rules that harm businesses’ ability to compete abroad. “A recent FOIA request by the U.S. Chamber of Commerce revealed that FTC staff were heavily involved in correspondence with the Office of the U.S. Trade Representative (USTR), ultimately leading to broad departures from bipartisan support for domestic digital trade rules that protect U.S. exports,” Hinson explained. This process “resulted in the USTR abandoning rules that protect $626 billion worth of digitally enabled exports that the United States generates in just a year.”