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Should Antitrust Consent Decrees Regulate Post-Merger Pricing?

Journal of Competition Law & Economics, Vol. 3, pp. 1-18, 2007

18 Pages Posted: 1 Aug 2007 Last revised: 2 Nov 2009

Farrell Malone

Cleary Gottlieb Steen & Hamilton LLP

J. Gregory Sidak

Criterion Economics, L.L.C.

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Abstract

Competitors proposing to merge sometimes propose price regulation in a consent decree as a condition of receiving merger approval. Antitrust enforcement agencies in the United States have been reluctant to use such price-regulating decrees, as they suffer from practical problems in implementation. It is less recognized, however, that the use of consent decrees to regulate post-merger prices may be unlawful. Such decrees exceed the scope of antitrust law and blur the distinction between the legislative power to regulate prices and the executive power to enforce the antitrust laws. Despite the willingness of merging parties to accept price regulation in consent decrees, economic and constitutional considerations counsel against antitrust enforcement agencies adopting this practice.

Suggested Citation

Malone, Farrell and Sidak, J. Gregory, Should Antitrust Consent Decrees Regulate Post-Merger Pricing?. Journal of Competition Law & Economics, Vol. 3, pp. 1-18, 2007. Available at SSRN: https://ssrn.com/abstract=1004023

Farrell Malone

Cleary Gottlieb Steen & Hamilton LLP ( email )

One Liberty Plaza
New York, NY 10006
United States

J. Gregory Sidak (Contact Author)

Criterion Economics, L.L.C. ( email )

1717 K Street, N.W.
Washington, DC 20006
United States
(202) 518-5121 (Phone)

HOME PAGE: http://www.criterioneconomics.com

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