Did you know that your browser is out of date?
For the best experience we recommend upgrading to the latest version of these supported browsers:
I wish to continue viewing on my unsupported browser
For the best experience we recommend upgrading to the latest version of these supported browsers:
I wish to continue viewing on my unsupported browser
03 June 2010
By Dr. Elizabeth M. Bailey and Dr. Lawrence Wu with former NERA economist Greg Leonard
The US Department of Justice (DOJ) and the Federal Trade Commission (FTC) (collectively, "the Agencies") have solicited public comments on the revisions that the Agencies are making to the Horizontal Merger Guidelines, which are used by the Agencies to evaluate the potential competitive effects of mergers and acquisitions under the federal antitrust laws. Economists from NERA's Global Antitrust and Competition Policy Practice submitted comments on the proposed revisions on 3 June 2010. The authors believe that the proposed Horizontal Merger Guidelines ("Proposed Guidelines") appropriately shift the focus of merger analysis, but that the Proposed Guidelines could be further revised or clarified in four important ways.
The Proposed Guidelines appropriately shift the focus of merger analysis in five principal ways. First, the Proposed Guidelines describe an approach that emphasizes empirical analysis and the various types of evidence that the Agencies will consider in evaluating competitive effects. Second, they reflect a shift towards direct competitive effects analysis and away from market definition as the first step in a merger review. Third, they recognize that the competitive effects of a merger potentially extend beyond price effects to include effects on innovation, product variety, product quality, and service, all of which, along with price, are determinants of consumer welfare. Fourth, the Proposed Guidelines are useful because they reflect actual agency practice and approaches to merger review. Fifth, the illustrative examples in the Proposed Guidelines are particularly valuable because they add to the transparency by describing how those principles are likely to be applied.
The authors' suggestions on how the Proposed Guidelines could be further revised or clarified fall into four categories:
Additional information regarding the Horizontal Merger Guidelines Review Project is available at http://www.ftc.gov/bc/workshops/hmg/index.shtml.