Academic journal article William and Mary Law Review

Guideline Institutionalization: The Role of Merger Guidelines in Antitrust Discourse

Academic journal article William and Mary Law Review

Guideline Institutionalization: The Role of Merger Guidelines in Antitrust Discourse

Article excerpt


With the growth of the administrative state, agency-promulgated enforcement policy statements, typically referred to as guidelines, have become ubiquitous in the U.S. federal system. Yet, the actual usage and impact of such guidelines is poorly understood. Often the issuing agencies declare the guidelines to be nonbinding, even for themselves. Notwithstanding this disclaimer, the government, private parties, and even the courts frequently rely on the guidelines in a precedent-like manner.

In this Article, Professor Greene examines the evolution of one system of enforcement policy guidelines--the U.S. federal antitrust merger guidelines--and finds that these guidelines have acted as a stealth force on the development of antitrust merger law. The influence of this guideline system, she hypothesizes, emerges from a process of institutionalization through which the guidelines become valued for more than the persuasive power of their ideas. This institutionalization process arguably has had an undue influence upon common law development, as courts have failed to fully engage the legal and economic substance of the guidelines. These findings raise the more general concern that the courts have frequently ceded their role as checks on administrative agency power operating through nonbinding policy statements such as enforcement guidelines. Such questions regarding the judiciary's role in the separation of powers are broadly analogous to those raised by Theodore Lowi regarding Congress's role in the legislative process.

Professor Greene chronicles the history of the guidelines through a series of case studies involving key elements in merger analysis. Then, based on a review of all rulings from 1969 to 2003 concerning section 7 of the Clayton Act, she generates basic quantitative measures regarding judicial references to the guidelines and then qualitatively assesses the extent to which judicial reference to the guidelines reflects substantive reliance on them. Both the case studies and statistical data provide strong evidence supporting the institutionalization theory. Having raised normative questions regarding guideline institutionalization, she then evaluates several strategies to counter that influence and proposes conduct-oriented recommendations.

Though specifics may vary, the unacknowledged phenomenon of guideline institutionalization is not unique to antitrust law. As such, Professor Greene concludes this Article with an examination of guideline institutionalization in other contexts, including the FCC and FERC, state consumer protection, and federal sentencing.


   A. Express Role: Explain Reasoning and Analysis
      Underlying Agency Exercise of
      Prosecutorial Discretion
   B. Implicit Role: Commentary on the Law
   A. Case Studies in Guideline Usage
      1. 1968 Merger Guidelines
      2. 1982 and 1984 Merger Guidelines--Department of
         Justice; 1982 Merger Statement--Federal
         Trade Commission
         a. HHI: Changing the Frame for Concentration
         b. Market Concentration Thresholds
            Table 1
         c. SSNIP: Changing the Frame for
            Market Definition
      3. 1992 Merger Guidelines
         a. Entry
         b. Treatment of Production Substitution and Entry
   B. Evidence of Overall Influence of the
      Merger Guidelines
      Graph 1
      Graph 2
      Graph 3
   C. Reliance on Guidelines Within Reported and
      Unreported Decisions
      Table 2
   A. A Theory of Guideline Influence
      Through Institutionalization
   B. Mechanisms of Institutionalization
      1. Demand for Guidance: The Relative Lack of
         Controlling Authority
      2. User-friendly Guidance: The Attractiveness of the
         Guidelines Package
         a. … 
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