Emerging Theories of Competitive Harm in Merger Enforcement
Antitrust Source, October 2011
7 Pages Posted: 10 Feb 2012
Date Written: October 1, 2011
Abstract
At least since the early 1980s, the core principles of merger enforcement policy have been stable. Horizontal mergers that create, enhance, or facilitate the exercise of market power and vertical transactions that adversely affect horizontal competition are condemned, and consumer welfare is the touchstone by which these assessments are made. In the past few years, however, the Federal Trade Commission and Department of Justice challenged one merger transaction, and almost challenged another, that departed from this enforcement paradigm. The first, Google/ITA, involved a “potential vertical” transaction, which had never before been the subject of antitrust enforcement. The second, Lundbeck/Merck, involved a conglomerate transaction, which the courts and agencies had not found objectionable under the antitrust laws in decades.
These cases demonstrate that the antitrust agencies are open to novel approaches for analyzing transactions that are believed to present a risk of consumer harm. The cases also suggest that the lack of an existing horizontal or vertical relationship between the merging parties should not necessarily be viewed as an antitrust “green light.”
Keywords: Merger Enforcement, Vertical Mergers, Conglomerate Mergers, Clayton Act, Section 7, FTC, DOJ, Antitrust
JEL Classification: K21, L40, L41, L49
Suggested Citation: Suggested Citation