Is Concentration Actually Increasing, or are We Just Defining Markets More Narrowly?

CPI North America Column 2022

5 Pages Posted: 1 Feb 2023

See all articles by Keith Klovers

Keith Klovers

Wilson Sonsini Goodrich & Rosati

Robert B. Kulick

NERA Economic Consulting

Date Written: June 1, 2022

Abstract

In a recent notice requesting public comment on potential changes to the Merger Guidelines, DOJ and FTC leaders assert that mergers have caused markets to become more concentrated and less competitive. To remedy this perceived problem, the Agencies requested comment on “whether concentration thresholds should be adjusted to improve the efficiency and effectiveness of enforcement” and “[h]ow should the guidelines analyze whether there is a ‘trend toward concentration in the industry,’ and what impact should such a trend have on the analysis of an individual transaction?” However, recent empirical research undercuts the basic premise underlying these inquiries, demonstrating (i) there is scant evidence of a broad increase in market concentration, and (ii) to the extent some nonetheless perceive such a trend, it may be explained by the trend toward defining narrower markets that have fewer competitors and higher market shares.

Keywords: Antitrust, FTC, DOJ, Merger Guidelines, concentration, market definition

JEL Classification: K21, L40

Suggested Citation

Klovers, Keith and Kulick, Robert B., Is Concentration Actually Increasing, or are We Just Defining Markets More Narrowly? (June 1, 2022). CPI North America Column 2022, Available at SSRN: https://ssrn.com/abstract=4344251

Keith Klovers (Contact Author)

Wilson Sonsini Goodrich & Rosati ( email )

650 Page Mill Rd
Palo Alto, CA 94304-1050
United States

Robert B. Kulick

NERA Economic Consulting ( email )

1255 23rd Street NW
Suite 600
Washington, DC 20009
United States

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