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Companies can get creative when they want to fend off a government challenge to an illegal merger. As chair of the Federal Trade Commission, I’ve heard would-be merging parties make all sorts of commitments to be better corporate citizens if only we would back off from a lawsuit. If only we hold off on suing to block the merger, they promise they will reduce their carbon footprints, give back to the community and so on. These commitments sometimes fall under the heading of ESG, for environmental, social and corporate governance factors. Some in corporate America seem to think that the FTC won’t challenge an otherwise illegal deal if we approve of its ESG impact.
They are mistaken. The antitrust laws don’t permit us to turn a blind eye to an illegal deal just because the parties commit to some unrelated social benefit. The laws we enforce are explicit: They prohibit mergers that “may substantially lessen competition or tend to create a monopoly.” They don’t ask us to pick between good and bad monopolies. Our statutory mandate is to halt a lessening of competition “in any line of commerce.” So we can’t act as deal makers, allowing reduced competition in one market in exchange for some unrelated commitment or benefit in another.
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