Confronting Consummated Mergers: An Inquiry into Policy and Practice

Mergers usually come with a promise: greater efficiency, innovation, better products. Sometimes that promise is kept. But other times, the merger turns out to be a mistake, for consumers, for markets, and for competition.

By then, of course, it’s generally too late.

In our forthcoming article in the Antitrust Law Journal, we tackle an uncomfortable truth: many harmful mergers are discovered only after they’re completed, and by then, fixing the problem is hard.

This is not just a theoretical concern. The US antitrust agencies (Federal Trade Commission and Department of Justice) increasingly acknowledge the limits of their merger enforcement tools. The 2023 revision of the Merger Guidelines was a step toward tightening ex ante (pre-merger) scrutiny. But what happens when a merger slips through the cracks, due to underreporting, misjudgment, or sheer agency overload?

A Blind Spot in Merger Control

The logic of merger enforcement has long been built on prediction: authorities must decide in advance whether a deal is likely to harm competition. But prediction is fallible, especially in fast-moving or data-scarce markets. New evidence often emerges only after the fact, when the damage is done.

Take the Federal Trade Commission’s clearance of Facebook’s acquisition of WhatsApp in 2014. At the time, regulators couldn’t be certain whether WhatsApp posed a real threat to Facebook. Years later, with more data and a different administration, the agency reversed course and sued. But by then, Facebook (now Meta) had deeply integrated WhatsApp into its platform so that addressing the harm would be more difficult.

This case is not unique. Many mergers, especially small ones, are never reported at all. In the US, even of those that are reported, most escape formal scrutiny. Others are waved through due to limited resources or overconfidence in behavioral remedies. The result is a growing stockpile of ‘consummated mergers’ that may be quietly undermining competition.

A Theory — and a Data Set

We approach the issue from two angles. First, we build a simple but powerful economic model of optimal merger policy timing. It frames the trade-off between:

• Ex ante enforcement, which is cheaper and easier to apply, but relies on predictions that may be wrong; and
• Ex post enforcement, which benefits from more information but is practically more difficult and often politically fraught.

Our model shows, not surprisingly, that ex post intervention only works if the remedy is both effective and affordable. It also demonstrates that when breakups are too difficult, or behavioral remedies don’t work, the solution is more aggressive pre-merger blocking.

Then, we put this theory to the test.

For the first time, we build a comprehensive data set of all 48 US enforcement actions against consummated mergers from 2001 to 2023. We examine:

• What prompted the ex post action?
• What remedies were used?
• Did those remedies actually work?

The Grim Realities of Undoing a Merger

Our findings are sobering. Of the 48 post-merger enforcement cases we studied:

• Only 2 were resolved purely with structural remedies (e.g. divestitures).
• Most used hybrid remedies (a mix of structural and behavioral).
• Behavioral-only remedies were more common when the agency waited longer to act.

But here’s the kicker: in almost half the cases (44 percent) the divested assets did not even remain in the market after 2–4 years. As for the rest, we could not assess their effectiveness in restoring competition. But even in the unlikely event that those were all effective, the overall rate of competitive restoration is modest at best.

In other words: even when agencies catch a harmful merger and order remedies, the fix often fails.

We also found that when divestitures did preserve assets, this was more likely when:

• The agency acted quickly after the merger.
• The assets were sold to an independent third party (not the original owner or a startup).
• The merger was notified in advance (i.e., not below the radar).

Implications: Rethinking the Balance

So where does this leave us?

Our work suggests a serious rethink is needed in the way we balance ex ante vs ex post merger enforcement. While there’s a role for ex post action, especially when new information emerges, we should recognize its limits:

• Although undoing a merger is not as rare as one would have thought, it is also really hard — structurally, legally, and politically.
• Remedies often underdeliver, especially when delayed or reliant on behavioral promises.
• Market harm can persist for years, even when enforcement eventually catches up.

Given all this, we argue that ex ante enforcement must do the heavy lifting. If we can’t reliably fix bad mergers after they happen, we should err on the side of stopping them before they do harm.

That means:

• Stronger presumptions against high-concentration mergers.
• Skepticism toward remedies, especially behavioral remedies.
• Lower thresholds for scrutiny (especially of serial acquirers in digital markets).
• And better resourcing for agencies, so that fewer cases fall through the cracks.

Looking Ahead

Merger control is not about punishing companies after the fact. It’s about protecting competition before it’s lost.

But when that fails, we need a system capable of acting and succeeding after the fact. Right now, our post-merger enforcement toolbox is underpowered, underused, and often ineffective.

Until that changes, our only real defense is to be more cautious upfront.

The authors’ paper can be accessed here.

John Kwoka is Neal F. Finnegan Distinguished Professor of Economics, Northeastern University.

Tommaso Valletti is a Professor of Economics, Imperial College Business School.