Proposed Oil Mergers Will Improve Competition

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Under Chairperson Lina Khan, the Federal Trade Commission (FTC) has consistently used speculative consumer harms to justify regulatory actions. Unfortunately, these actions often stop mergers that would have improved consumer wellbeing and promoted greater innovation. Making these regulatory actions worse, the agency has too often used dubious justifications and novel theories, even overruling their own procedures to facilitate this harmful regulatory overreach.

Despite this anti-growth record, the FTC has an opportunity to demonstrate that it can objectively fulfill its mission and ensure that markets are competitive for the benefit of consumers. This is assuming, of course, the commissioners resist the pressure from Sen. Chuck Schumer and 22 other Senate Democrats.

At issue are two mergers in the oil and gas industry – ExxonMobil’sXOM -0.2% proposed merger with Pioneer Natural ResourcesPXD +0.1% and Chevron’sCVX -0.5% proposed merger with Hess Oil. Sen. Schumer warns in his correspondence with the FTC, “that Exxon’s deal – and Chevron’s announced merger with Hess – had the red flags of anticompetitive behavior. I warned that these deals could open the floodgates to more consolidation, less competition, higher prices – just to pad the profits of the largest oil companies.”

Click to read the full article in Forbes.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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