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Mergers and Market Dominance

20 Pages Posted: 1 Feb 2009  

Herbert J. Hovenkamp

Univ. of Pennsylvania Law and Wharton Business

Date Written: January 26, 2009

Abstract

Mergers involving dominant firms legitimately receive close scrutiny under the antitrust laws, even if they involve tiny firms. Further, they should be examined closely even in markets that generally exhibit low entry barriers. Many of the so-called "unilateral effects" cases in current merger law are in fact mergers that create dominant firms. The rhetoric of unilateral effects often serves to disguise this fact by presenting the situation as if it involves the ability of a small number of firms (typically two or three) in a much larger market to increase their price to unacceptable levels. In fact, if such a grouping of firms can achieve an unacceptably high price increase for an unacceptable length of time, that grouping is best viewed as a relevant market unto itself.

Keywords: Antitrust, Monopoly, Mergers, Competition

JEL Classification: K00, K2, K21, L4, L41, J3

Suggested Citation

Hovenkamp, Herbert J., Mergers and Market Dominance (January 26, 2009). U Iowa Legal Studies Research Paper No. 09-01. Available at SSRN: https://ssrn.com/abstract=1333184 or http://dx.doi.org/10.2139/ssrn.1333184

Herbert Hovenkamp (Contact Author)

Univ. of Pennsylvania Law and Wharton Business ( email )

3501 Sansom Street
Philadelphia, PA 19104
United States
319-512-9579 (Phone)

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