Download or read book Recommendations and Comments on the Draft Vertical Merger Guidelines written by Jonathan B. Baker and published by . This book was released on 2020 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: These recommendations and comments respond to the request by the Federal Trade Commission and the Department of Justice's Antitrust Division for public comment on the draft 2020 Vertical Merger Guidelines. We commend the agencies for updating the 1984 non-horizontal merger guidelines by recognizing the substantial advances in economic thinking about vertical mergers in the thirty-five years since those guidelines were issued. Our comments emphasize four issues: (i) the treatment of the elimination of double marginalization (“EDM”), particularly that the draft vertical merger guidelines appear inappropriately to make proof of cognizability part of the agencies burden and that they appear to inappropriately treat the merging firm's failure to have eliminated double marginalization pre-merger as proof that the merger would lead to EDM and that the post-merger EDM would be merger-specific; (ii) the seemingly arbitrary and inappropriately permissive safe harbor; (iii) the inappropriate (though perhaps unintended) apparent requirement that harms be quantified; and (iv) the inappropriate (though perhaps unintended) apparent requirement that the agencies show that foreclosure would not have been profitable before the merger. We are concerned that these features of the draft Guidelines will lead to under-enforcement and false negatives (including under-deterrence).

Download or read book Assessment of the Vertical Merger Guidelines and Recommendations for the VMGs Commentary written by Koren Wong-Ervin and published by . This book was released on 2020 with total page 5 pages. Available in PDF, EPUB and Kindle. Book excerpt: This article provides an assessment of the key changes in the final DOJ-FTC Vertical Merger Guidelines (VMGs) from the January 2020 Draft Guidelines and offers recommendations for the VMGs Commentary--namely, additional details on how the Agencies will determine the industry-wide average retail price when weighing the upward price pressure created by raising rivals' costs (RRC) and the downward price pressure created by elimination of double marginalization (EDM). We also recommend guidance on remedies. These are important because one of the most important roles of guidelines is to provide private parties with the ability to evaluate and price risk ex ante.

Download or read book Quantifying the Increase in Effective Concentration from Vertical Mergers that Raise Input Foreclosure Concerns written by Steven C. Salop and published by . This book was released on 2020 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This comment responds to the request by the Federal Trade Commission and the Department of Justice's Antitrust Division for public comment on the draft 2020 Vertical Merger Guidelines. In this comment, we show that there is an inherent loss of an indirect competitor and competition when a vertical merger raises input foreclosure concerns. We also show that it then is possible to calculate an effective increase in the HHI measure of concentration for the downstream market. We refer to this “proxy” measure as the “dHHI.” We derive the dHHI measure by comparing the pricing incentives and associated upward pricing pressure (“UPP”) involved in two alternative types of acquisitions: (i) vertical mergers that raise unilateral input foreclosure concerns (and the associated vertical GUPPI measures), and (ii) horizontal acquisitions of partial ownership interests among competitors that raise unilateral effects concerns (and the associated modified GUPPI and modified HHI measures).

Download or read book Evaluating the Evidence on Vertical Mergers written by Marissa Beck and published by . This book was released on 2020 with total page 25 pages. Available in PDF, EPUB and Kindle. Book excerpt: The U.S. Department of Justice and Federal Trade Commission issued draft Vertical Merger Guidelines on January 10, 2020. In the discussion on vertical merger policy, some commenters have relied on surveys of the empirical economic literature to justify a procompetitive presumption. This comment reviews two frequently cited surveys of empirical evidence on vertical integration as of 2005-2007, as well as more recent studies not included in those surveys, to determine the extent to which they find that the vertical integration they study was procompetitive or anticompetitive. Upon careful inspection, the evidence they provide on the change in welfare due to vertical mergers is decidedly mixed. Perhaps more importantly, taken as a whole, these studies do not provide evidence for the proposition that all or most vertical mergers are good for consumers.

Download or read book The 2020 Vertical Merger Guidelines written by Steven C. Salop and published by . This book was released on 2020 with total page 19 pages. Available in PDF, EPUB and Kindle. Book excerpt: The FTC and DOJ requested comments on their draft Vertical Merger Guidelines in January 2020. This article is a complete alternative set of suggested Vertical Merger Guidelines that reflects and supplements the approach explained in the comments submitted by the author along with Jonathan. Baker, Nancy Rose and Fiona Scott Morton, as well as their other comments, and might be read in conjunction with those comments. This suggested revision of the Agencies' draft expands the list of potential competition harms and provides illustrative examples. It expands and unifies the discussion and treatment of potential competitive benefits. It deletes the quasi-safe harbor and suggests the circumstances under which competitive harms raise lessened concerns on the one hand and heightened concerns on the other.

Download or read book Comments on Draft Merger Guidelines written by Gregory J. Werden and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: On July 18, 2023, the Agencies responsible for enforcing antitrust law relating to mergers--the U.S. Department of Justice and the Federal Trade Commission--published draft Merger Guidelines (dMGs) for comment. This comment reflects cumulative experience from four decades as an enforcer, from researching and writing approximately 90 articles and book chapters relating to the competitive effects of mergers and their assessment, and from involvement in the preparation of all prior Merger Guidelines issued by the Agencies over the past half-century. Unlike prior Merger Guidelines, the dMGs do not promote the rule of law by articulating self-imposed limits to the exercise of discretion. As compared with prior Guidelines, the dMGs say less about which mergers the Agencies intend to challenge and especially about which mergers they intend not to challenge. The dMGs are more of a legal brief arguing that the Agencies have enormous discretion and that merging firms have an insuperable burden with any defense put forward.The dMGs assert case law support for the policies articulated, but many of the cases do not support the policies for which they are cited, and many of the policies lack any support in law. As a general matter, the law is less receptive than the dMGs suggest to arguments that mergers substantially lessen competition, and more receptive to rebuttal arguments.

Download or read book Federal Trade Commission and United States Department of Justice Commentary on the Horizontal Merger Guidelines written by and published by DIANE Publishing. This book was released on with total page 71 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Revising the U S Vertical Merger Guidelines written by Steven C. Salop and published by . This book was released on 2015 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: Mergers and acquisitions are a major component of antitrust law and practice. The U.S. antitrust agencies spend a majority of their time on merger enforcement. The focus of most merger review at the agencies involves horizontal mergers, that is, mergers among firms that compete at the same level of production or distribution.Vertical mergers combine firms at different levels of production or distribution. In the simplest case, a vertical merger joins together a firm that produces an input (and competes in an input market) with a firm that uses that input to produce output (and competes in an output market).Over the years, the agencies have issued Merger Guidelines that outline the type of analysis carried out by the agencies and the agencies' enforcement intentions in light of state of the law. These Guidelines are used by agency staff in evaluating mergers, as well as by outside counsel and the courts.Guidelines for vertical mergers were issued in 1968 and revised in 1984. However, the Vertical Merger Guidelines have not been revised since 1984. Those Guidelines are now woefully out of date. They do not reflect current economic thinking about vertical mergers. Nor do they reflect current agency practice. Nor do they reflect the analytic approach taken in the 2010 Horizontal Merger Guidelines. As a result, practitioners and firms lack the benefits of up-to-date guidance from the U.S. enforcement agencies.

Download or read book Special Issue the U S Vertical Merger Guidelines written by Roger D. Blair and published by . This book was released on 2021 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book U S Vertical Merger Guidelines written by Koren Wong-Ervin and published by . This book was released on 2020 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This article offers the following recommendations, focusing on #3 and 6:1. Specifics on how the Agencies will implement the principles set forth in the Guidelines. The Guidelines state throughout that the Agencies “may consider” certain factors; this language should be revised to say “will” or “usually will” consider. 2. An explicit recognition that empirical evidence indicates that vertical mergers are generally procompetitive or benign and, as the Agencies have previously stated, “vertical mergers merit a stronger presumption of being efficient than do horizontal mergers.”3. A clear statement that the government has the burden on EDM given that such calculations are part of the math of the raising rivals costs (RRC) argument and the two cannot be analyzed in isolation before evaluating their net effect. In other words, EDM can prevent RRC, not just net it out. The prima facie case should not, however, extend to netting the two out, but rather to showing that the merger is likely to result in RRC.4. An explicit statement that the relevant inquiry for RRC is the effect on downstream competition and that raising the cost of an upstream input with no downstream effects does not warrant intervention. While examples in the Guidelines seem to suggest that the Agencies will follow this principle, an explicit statement would be helpful. 5. Explicitly requiring both the incentive and the ability to engage in anticompetitive conduct given that, without the ability there can be no harm, and lack of incentives is a strong indication that there are legitimate business reasons for the deal. 6. A recognition of the coordination problem presented by vertical dealing and that achieving EDM (and other efficiencies) through contracting presents challenges given the costly process of forming, administering, and enforcing contracts with independent suppliers.7. Replacing the 20% market-share language with a clear safe harbor and increasing the relevant market share threshold (but not necessarily the “related product” threshold) from 20% to at least 30%.

Download or read book Five Principles for Vertical Merger Enforcement Policy written by Jonathan B. Baker and published by . This book was released on 2020 with total page 9 pages. Available in PDF, EPUB and Kindle. Book excerpt: There seems to be consensus that the Department of Justice's 1984 Vertical Merger Guidelines do not reflect either modern theoretical and empirical economic analysis or current agency enforcement policy. Yet widely divergent views of preferred enforcement policies have been expressed among agency enforcers and commentators. Based on our review of the relevant economic literature and our experience analyzing vertical mergers, we recommend that the enforcement agencies adopt five principles: (i) The agencies should consider and investigate the full range of potential anticompetitive harms when evaluating vertical mergers; (ii) The agencies should decline to presume that vertical mergers benefit competition on balance in the oligopoly markets that typically prompt agency review, nor set a higher evidentiary standard based on such a presumption; (iii) The agencies should evaluate claimed efficiencies resulting from vertical mergers as carefully and critically as they evaluate claimed efficiencies resulting from horizontal mergers, and require the merging parties to show that the efficiencies are verifiable, merger-specific and sufficient to reverse the potential anticompetitive effects; (iv) The agencies should decline to adopt a safe harbor for vertical mergers, even if rebuttable, except perhaps when both firms compete in unconcentrated markets; (v) The agencies should consider adopting rebuttable anticompetitive presumptions that a vertical merger harms competition when certain factual predicates are satisfied. We do not intend these presumptions to describe all the ways by which vertical mergers can harm competition, so the agencies should continue to investigate vertical mergers that raise concerns about input and customer foreclosure, loss of a disruptive or maverick firm, evasion of rate regulation or other threats to competition, even if the specific factual predicates of the presumptions are not satisfied.

Download or read book U S Department of Justice Merger Guidelines written by United States. Department of Justice. Antitrust Division and published by . This book was released on 1982 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Comments on the 2023 Draft Merger Guidelines written by David Berger and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The DOJ and FTC clarify the role of labor market power ("monopsony") in the 2023 draft merger guidelines. The draft states in Guideline 11 that the structural presumption threshold applies to labor market concentration, while also suggesting that a stricter threshold may be warranted in labor markets. The post-merger Herfindahl-Hirschman Index (HHI) that defines a highly concentrated market is 1800, which is lower, and so stricter, than the 2010 guidelines. We provide five comments on the draft guidelines based on our recent work Berger, Hasenzagl, Herkenhoff, Mongey, and Posner (2023). (1) Explicitly addressing monopsony in the draft guidelines is grounded in economic theory and empirical research. (2) Workers benefit from the lower threshold for highly concentrated markets. (3) The narrow nature of labor markets and high degree of monopsony power in the U.S. may warrant an even lower threshold. For example, merger simulations indicate that workers would benefit if the agencies lowered the HHI threshold further - to 1500 or 1000. (4) Worker welfare is central to the 2023 draft guidelines but the language is not always clear about this. The guidelines should make clear that degradations of "worker welfare" or "total compensation" indicate anticompetitive effects. (5) Dominant firms that can slow wage growth - but not freeze or cut wages - are subject to Guideline 7.

Download or read book Vertical Merger Guidelines written by and published by . This book was released on 2010 with total page 12 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Potential Competitive Effects of Vertical Mergers written by Steven C. Salop and published by . This book was released on 2015 with total page 66 pages. Available in PDF, EPUB and Kindle. Book excerpt: The purpose of this short article is to aid practitioners in analyzing the competitive effects of vertical and complementary product mergers. It is also intended to assist the agencies if and when they undertake revision of the 1984 U.S. Vertical Merger Guidelines. Those Guidelines are out of date and do not reflect current enforcement or economic thinking about the potential competitive effects of vertical mergers. Nor do they provide the tools needed to carry out a modern competitive effects analysis. This article is intended to partially fill the gap by summarizing the various potential competitive harms and benefits that can occur in vertical mergers and the types of economic and factual analysis of competitive effects that can be applied to those mergers during the HSR review process. The analysis in the article also identifies several legal and policy issues that the agencies would consider when they undertake the process of revising the Vertical Merger Guidelines. The Appendix contains a listing and summary of the vertical merger cases challenged by the DOJ and FTC since 1994.

Download or read book Horizontal Merger Guidelines written by Peter Carstensen and published by . This book was released on 2010 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Antitrust Division of the Department of Justice and the Federal Trade Commission have commenced a process of reviewing the Merger Guidelines that were last subject of a comprehensive revision in 1993. The agencies are holding a series of workshops and have solicited comments on a number of questions that they have formulated. The questions and the workshops, however, fail to take account of a major development in the assessment of mergers: their impact on the buying side of the market. Empirical data show that buying side effects can be quite substantial; yet the Guidelines devote only two sentences to discussing the analysis of this topic. These comments present a review of the central issues that ought to be included in comprehensive merger guidelines concerning buyer power: appropriate definition of the buying side product and geographic dimensions of the relevant markets, the likely competitive effects including the potential for such effects in various levels of market concentration, and the resulting thresholds above which more serious evaluation of mergers creating increased buyer power ought to be investigated. The basic point of these comments is that the revised Merger Guidelines should directly and clearly address the issue of buyer power resulting from mergers and provide appropriate standards for the evaluation of such effects.

Download or read book Antitrust Regulators Release New Vertical Merger Guidelines written by Sykes and published by . This book was released on 2020 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: