Resurrecting Incipiency: From Von's Grocery to Consumer Choice

Abstract

The merger incipiency doctrine is virtually ignored in the courts today. This article argues that it should be resurrected, and it also explores the ways that effectuating Congressional intent in the area would reinvigorate merger policy.

The article documents how the legislative history of the antimerger statutes shows that Congress intended mergers to be evaluated under an incipiency approach, and explores the possible meanings of this idea. It then shows that this is a strong basis for reviving significantly stricter or more prophylactic merger enforcement.

The article shows how there are aspects of the doctrine that could be revived without returning to the earlier misguided Von's Grocery approach to the issue. It shows, for example, how the concept could in part be resurrected if merger enforcement's primary focus returned to its intellectual foundation: a concern with consumer choice. During many permissive periods of merger enforcement the sole goal of merger enforcement policy was increased economic efficiency. A return to enforcement based upon the consumer choice standard could help to revitalize more aggressive enforcement. The article also discusses other ways - including the concern that a transaction might lead to a merger trend or wave, and a "sliding scale" approach to especially large transactions in highly concentrated industries - in which the Merger Guidelines and merger enforcement and decisions could become even more faithful to the Congressional goals underlying the incipiency doctrine.

Keywords: Merger, Merger Incipency Doctrine, Antitrust

JEL Classification: K21