Reinvigorating Horizontal Merger Enforcement
The past forty years have witnessed a remarkable transformation in horizontal merger enforcement in the United States. With no change in the underlying statute, the Clayton Act, the weight given to market concentration by the federal courts and by the federal antitrust agencies has declined dramatically. Instead, increasing weight has been given to three arguments often made by merging firms in their defense: entry, expansion and efficiencies. The authors document this shift and provide examples where courts have approved highly concentrating mergers based on limited evidence of entry and expansion. The authors show using merger enforcement data and a survey conducted of merger practitioners that the decline in antitrust enforcement is ongoing, especially at the current Justice Department. The authors then argue in favor of reinvigorating horizontal merger enforcement by partially restoring the structural presumption and by requiring strong evidence to overcome the government’s prima facie case. The authors propose several routes by which the government can establish its prima facie case, distinguishing between cases involving coordinated vs. unilateral anti-competitive effects.
Horizontal mergers, Merger enforcement, Antitrust, Coordinated effects, Unilateral effects
Antitrust and Trade Regulation | Law
Baker, Jonathan and Carl Shapiro. “Reinvigorating Horizontal Merger Enforcement.” In How the Chicago School Overshot the Mark: The Effect of Conservative Economic Analysis on U.S. Antitrust, edited by Robert Pitofsky, 235-288. New York: Oxford University Press, 2008.