Comments of J. Gregory Sidak and David J. Teece before the Federal Trade Commission & U.S. Department of Justice on the Horizontal Merger Guidelines Review Project

2009 ◽  
Author(s):  
J. Gregory Sidak ◽  
David J. Teece
Keyword(s):  
Federal Trade Commission ◽  
Horizontal Merger ◽  
Department Of Justice ◽  
Merger Guidelines

scholarly journals Judicial Response to the 2010 Horizontal Merger Guidelines

2021 ◽  
Vol 58 (1) ◽  
pp. 51-79
Author(s):  
Carl Shapiro ◽  
Howard Shelanski
Keyword(s):  
Federal Trade Commission ◽  
Case Law ◽  
Market Concentration ◽  
Horizontal Merger ◽  
Average Increase ◽  
Department Of Justice ◽  
Merger Guidelines ◽  
Direct Competition ◽  
The Government ◽  
The U.S

AbstractWe study how the courts have responded to the 2010 Horizontal Merger Guidelines issued by the U.S. Department of Justice and the Federal Trade Commission. Looking at decided cases, we find that both the government and merging parties rely on the 2010 Guidelines in presenting their cases, each side respectively arguing that it should win if the court properly follows them . The 2010 Guidelines had the strongest effect on the case law in the area of unilateral effects, where a number of courts have embraced them in ways that clearly depart from earlier decisions. The case law now exhibits much greater receptivity to a government showing that the merger will lead to higher prices simply due to the loss of direct competition between the two merging firms. The courts also have followed the 2010 Guidelines by more willingly defining markets around targeted customers. We do not detect any effect on decided cases of the higher concentration thresholds found in the 2010 Guidelines. Both the average pre-merger level of market concentration and the average increase in market concentration alleged by the government in litigated cases to date declined after 2010 .

scholarly journals The 2010 Horizontal Merger Guidelines After 10 Years

2021 ◽  
Author(s):  
Joseph Farrell ◽  
Carl Shapiro
Keyword(s):  
Federal Trade Commission ◽  
Analytical Techniques ◽  
Economic Research ◽  
Horizontal Merger ◽  
Horizontal Mergers ◽  
Special Issue ◽  
Department Of Justice ◽  
Substantial Impact ◽  
Merger Guidelines ◽  
The Impact

AbstractThis paper introduces the Special Issue of the Review of Industrial Organization that studies the impact of the 2010 Horizontal Merger Guidelines after 10 years On August 19, 2010, the U.S. Department of Justice (DOJ) and the Federal Trade Commission (FTC) issued newly updated Horizontal Merger Guidelines (2010 Guidelines) [See https://www.ftc.gov/sites/default/files/attachments/merger-review/100819hmg.pdf.]. The 2010 Guidelines begin by stating: “These Guidelines outline the principal analytical techniques, practices, and the enforcement policy of the Department of Justice and the Federal Trade Commission (the “Agencies”) with respect to mergers and acquisitions involving actual or potential competitors (“horizontal mergers”) under the federal antitrust laws.” Since the first Merger Guidelines were issued by the DOJ 1968, the merger guidelines have been an important channel by which economic research and learning affects antitrust enforcement. Each iteration of the merger guidelines has reflected the economic thinking of the day. Each iteration also has made a substantial impact on merger enforcement and the development of antitrust law. This special issue examines the impact of the 2010 Merger Guidelines after 10 years.

A Quantitative Methodology for Determining Relevant Geographic Markets in Higher Transportation Cost Industries

2018 ◽  
Vol 63 (4) ◽  
pp. 431-443
Author(s):  
Martino De Stefano ◽  
Joanna Tsai
Keyword(s):  
Federal Trade Commission ◽  
Transportation Cost ◽  
The Other ◽  
Horizontal Merger ◽  
Quantitative Methodology ◽  
Department Of Justice ◽  
Merger Guidelines ◽  
Loss Analysis ◽  
Actual Loss ◽  
The U.S

The U.S. Department of Justice/Federal Trade Commission Horizontal Merger Guidelines describes the hypothetical monopolist test (HMT) and significant and nontransitory increase in price (SSNIP) as tools to define antitrust markets. However, the discussion leaves some ambiguities with regards to the implementation of such tools. In this article, we present a methodology for quantitatively delineating geographic markets that is consistent with the Guidelines. In particular, for geographic markets that are based on the locations of customers, the market boundaries encompass the region into which sales are made from the merging parties’ plants, and competitors in the market are firms that sell to customers in the specified region. We use two approaches to identify the competitive reach of a plant—one based on actual shipping distances, which reflect the areas where the plant actually sells; and the other based on distances at which the plant’s product can be shipped profitably, which reflect all areas where the plant can potentially compete for customers. These distances are used to “draw circles” around plants to identify areas where one merging party plant’s competitive reach overlaps with the reach of another plant belonging to the merging partner, thus identifying the overlap customers. For each identified overlap customer area, the HMT is implemented using the critical loss analysis following a SSNIP by the hypothetical monopolist. We explain how to calculate the critical loss as well as the likely actual loss from the SSNIP.

Deregulating antitrust policy

2020 ◽  
Vol 44 (4) ◽  
pp. 871-890 ◽  
Author(s):  
Mark Stelzner ◽  
Mayuri Chaturvedi
Keyword(s):  
Income Inequality ◽  
Mergers And Acquisitions ◽  
Market Power ◽  
Market Concentration ◽  
Antitrust Policy ◽  
Horizontal Merger ◽  
Department Of Justice ◽  
Economic Variables ◽  
Merger Guidelines ◽  
Half Century

Abstract Starting in the 1980s, market concentration began to rise dramatically decreasing competition and increasing market power for the firms that remain. Such developments have important effects on a number of economic variables such as the efficiency of our economy and income inequality. Thus, it is important to ask: how has the administration of antitrust policy changed over the last half century? To shed more light on these important questions, we explore both change in policy outline by the Department of Justice in its Horizontal Merger Guidelines and change in administrative actions looking at both secondary requests for mergers and acquisitions of different sizes, and pre, post and change in Herfindahl–Hirschman Index in mergers and acquisitions contested by the Department of Justice through the courts.

scholarly journals Vertical Mergers and Input Foreclosure Lessons from the AT&T/Time Warner Case

2021 ◽  
Author(s):  
Carl Shapiro
Keyword(s):  
Economic Analysis ◽  
Federal Trade Commission ◽  
Department Of Justice ◽  
Merger Guidelines ◽  
Vertical Merger ◽  
Practical Guide ◽  
Economic Expert ◽  
Time Warner ◽  
Vertical Mergers ◽  
The U.S

AbstractThis article offers a practical guide to analyzing vertical mergers using the general approach to input foreclosure and raising rivals’ costs that is described in the 2020 Vertical Merger Guidelines that were issued by the U.S. Department of Justice and the Federal Trade Commission. The step-by-step analysis described here draws lessons from how that theory of harm played out in the lone vertical merger case that has been litigated by the antitrust agencies in recent decades: the 2018 challenge by the Department of Justice to the merger between AT&T and Time Warner. I testified in court as the DOJ’s economic expert in that case. I explain here how to quantify the increase in rivals’ costs and the elimination of double marginalization that are caused by a vertical merger and how to evaluate their net effect on downstream customers. I also explain how this economic analysis fits into the three-step burden-shifting approach that the courts apply to mergers under Section 7 of the Clayton Act. Based on my experience in the AT&T/Time Warner case, I identify a number of shortcomings of the 2020 Vertical Merger Guidelines.

scholarly journals The New Vertical Merger Guidelines: Muddying the Waters

2021 ◽  
Author(s):  
Michael A. Salinger
Keyword(s):  
Federal Trade Commission ◽  
Department Of Justice ◽  
Potential Harm ◽  
Merger Guidelines ◽  
Vertical Merger ◽  
Potential Competition ◽  
Dominant Firms ◽  
Static Pricing ◽  
Vertical Mergers

AbstractThe new U.S. Department of Justice and Federal Trade Commission Vertical Merger Guidelines focus on how vertical mergers are likely to affect static pricing incentives. While vertical mergers can create incentives to increase prices, they can also provide incentives to decrease prices. Which of the possible outcomes is likely to occur depends on details that are generally difficult to measure. Potential competition between dominant firms, the theory of potential harm to competition that the 1984 Department of Justice Merger Guidelines stressed, remains a more compelling rationale for blocking vertical mergers than the likely effect on static pricing incentives.

scholarly journals Mergers with Differentiated Products: Where Do We Stand?

2021 ◽  
Vol 58 (1) ◽  
pp. 179-212
Author(s):  
Tommaso Valletti ◽  
Hans Zenger
Keyword(s):  
Economic Analysis ◽  
Differentiated Products ◽  
Horizontal Merger ◽  
10Th Anniversary ◽  
Merger Guidelines ◽  
Competitive Effects ◽  
Unilateral Effects ◽  
Market Shares ◽  
Differentiated Product Markets

AbstractOn the occasion of the 10th anniversary of the 2010 U.S. Horizontal Merger Guidelines, this article provides an overview of the state of economic analysis of unilateral effects in mergers with differentiated products. Drawing on our experience with merger enforcement in Europe, we discuss both static and dynamic competition, with a special emphasis on the calibration of competitive effects. We also discuss the role of market shares and structural presumptions in differentiated product markets.

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