Sharper Focus: Market Shares in the Merger Guidelines
Posted: 11 Sep 2001
Abstract
The U.S. Merger Guidelines have two main defects. First, they look mainly at entry conditions at the periphery of each market, rather than at real market power at the core of each market. Second, they are overloaded with theories and tests which rely on over 50 "factors," most of which can't be measured. The Guidelines therefore give little real "guidance" about U.S. antitrust agencies' actions toward real mergers.
The Guidelines should restore the tight focus on the merging firms' market shares, just as all smart business leaders and observers do. That refocusing would make the Guidelines reliable, crystal-clear and useful. It would also reduce various economic losses that are caused by the vagueness and bloat of the current Guidelines.
Keywords: Antitrust, merger, guidelines
JEL Classification: L0, L4
Suggested Citation: Suggested Citation