Holman Jenkins’ Wall Street Journal column explains that government agencies have a natural – and corrupting – incentive to make decisions that rationalize their existence and increase their budgets. In the case of antitrust decisions, it therefore is not surprising that bureaucrats narrowly define product markets so as to give them an excuse to regulate, litigate, and otherwise interfere with market forces. To be fair, this is not just a public‐sector problem. Tax lobbyists and tax preparation practitioners routinely oppose tax reform for the same reason. The unifying problem, of course, is government policy:
Federal agencies have two choices when presented with a merger. They can find a “problem” — in which case their budgets are justified and their walls fill up with scalps. Or they can find no problem. Guess which they do? Take the Federal Trade Commission lawsuit to block a proposed merger of Office Depot and Staples, a close parallel to Sirius‐XM. The two would have accounted for just 4% of the office‐supply market, but 100% of the market for office supplies purchased from … Office Depot or Staples! Take FTC’s failed attempt to block a deal bringing Häagen‐Dazs and Dreyer’s under the same roof, which in a better world would forever have deprived its promoters of the respect of their peers. The agency’s case was built on the premise that “superpremium” ice cream doesn’t compete with, er, ice cream. … Antitrust battles may depend on the illusion of fierce debate about economics, but there’s only one antitrust establishment in Washington whose pre‐emptive interest is keeping the charade going. … Even the alarm over Sarbanes‐Oxley and its effect in driving listed companies offshore or into the hands of private equity is akin to fretting about tennis elbow when the arm may be amputated. Not when you have Congress eagerly promoting bills to put Congress in charge of deciding foreign investment inflows, to punish energy consumption, to prop up a dying private‐sector labor movement and regulate CEO pay.