Today, the Organization for Competitive Markets (OCM) submitted public comments on the new U.S. Department of Justice (DOJ) and Federal Trade Commission (FTC) Draft Vertical Merger Guidelines.
The 1984 Non-Horizontal Merger Guidelines, currently in place, should be rescinded, as the nearly 40-year-old merger review standards do not reflect today’s economic realities in which consolidation in agriculture has driven farmers off the land, reduced farm income, and eroded small towns and rural economies. OCM applauds the DOJ and FTC for taking steps to improve its guidelines, however, the proposed Draft Vertical Merger Guidelines do not adequately address the many concerns surrounding vertical mergers, especially those in agriculture.
Among its suggestions, OCM outlined the need for a detailed rule that outlines specific violations, creates a broad framework for identifying competitive harm, is enforceable, and applies significant consequences for companies that commit violations. For too long, OCM’s comments argue, “subjective interpretation of antitrust law has led to widespread anticompetitive behavior. These abuses have been permitted for so long that they are now considered to be common industry practice.”
“Farmers and ranchers are hurting right now, and vertical integration, including the mergers of large corporations, is a major cause,” said Ben Gotschall, OCM Policy and Research Director. “Too much concentration in the marketplace drives down farm and ranch income, prevents new businesses from getting started, and ultimately puts farmers and ranchers off the land. We believe stopping potentially anticompetitive mergers can keep those injustices from happening.”
OCM’s suggestions call for a focus on producer protections, which would take into account the effects mergers would have on farms and farm laborers who produce commodities and food products. “Anticompetitive practices, including horizontal and vertical mergers that jeopardize the ability of producers to compete, have drastic economic consequences, particularly in rural areas and among minority populations,” the group’s comments state.
“At some point, our government must recognize the very real harm consolidation of corporate power has done to farm and ranch families, rural communities, and small-town economies. That time is now. We are grateful for this opportunity to provide input to federal agencies to develop sound vertical merger guidelines that can help make our agriculture economy function for the people, like it should,” Gotschall concluded.
OCM intends to participate in the DOJ and FTC joint public workshops on the Draft Vertical Merger Guidelines in March 2020.
Organization for Competitive Markets (OCM) is a membership-based research and advocacy organization working for transparent, fair and truly competitive agricultural and food markets.