New reports by the International Center for Law and Economics (ICLE) show that many high-profile mergers have been highly criticized, saying they will do major harm to both competition and consumers.
According to the International Center for Law and Economics, critics like Federal Trade Commission Chair Lina Khan said that Amazon’s acquisition of Whole Foods in 2017 would crush competitors in physical retail.
“The recent report from the ICLE clearly illustrates, through an abundance of high-profile examples, that the doom and gloom predictions that seem to go hand-in-hand with reports of potential mergers have been overblown time and time again,” said Robert Bork Jr., president of the Antitrust Education Project. “Even Lina Khan’s own prediction that Amazon’s acquisition of Whole Foods would stifle innovation has proven false. What that tells us is markets tend to produce better outcomes than government bureaucrats with their narrow-minded ideological world view believe possible.”
Khan said in a New York Times op-ed, “Buying Whole Foods will enable Amazon to leverage and amplify the extraordinary power it enjoys in online markets and delivery, making an even greater share of commerce part of its fief.”
The report by the International Center for Law and Economics also said that Amazon has failed to beat their physical retail competitors adding, "At the time of writing, several large retailers have grown faster than Amazon; Whole Foods’ market share has barely budged and several new players have entered the online retail space.”
The report states that Amazon's Whole Foods deal has actually delivered lower grocery prices and increased convenience for consumers.
Anheuser-Busch's 2016 acquisition of SABMiller was also criticized in that report. According to the report, critics of the merger claimed it would have negative effects, including increased prices and decimating the craft-beer aspect of the market which was burgeoning. Prices of beer did rise, the report stated, but on average prices went down, and the craft-beer segment actually thrived.
Google's acquisition of Fitbit was criticized in the report as well, saying, “Opponents claimed the merger would reinforce Google’s position in the ad industry and prevent new entry; harm user privacy by enabling Google to integrate Fitbit health data into its other ad services (or sell this data to health insurers) and crush burgeoning rivals in the wearable-device industry."
Since the merger, Google's share of the online advertising industry has decreased, and the company has entered into the smartwatch market as a competitor against market leader, Apple.
Various examples like these led the authors of the report to conclude, "Most mergers, even the ones we picked as noteworthy, are largely benign but pose a set of tradeoffs... In the end, reality failed to match the rhetoric. These ambiguous effects are precisely why evidence-based antitrust enforcement—along with remedies that can separate the wheat from the chaff—is as important today as it has ever been.”