Evaluating the Evidence on Vertical Mergers

Abstract

In theory, vertical mergers can have both procompetitive and anticompetitive effects. Many early empirical studies found benefits of vertical relationships, but the seminal surveys of this literature are now over a decade old. We review the empirical evidence from the last decade on vertical integration, as well as that in two frequently cited surveys from the mid-2000s. Taken as a whole, the empirical evidence on the change in welfare due to vertical mergers is decidedly mixed, and should certainly not be used as a basis for a presumption that most vertical mergers are procompetitive or harmless.

Keywords: Vertical Merger Guidelines, Empirical Evidence, Antitrust