Horizontal Merger Guidelines: The Omitted Dimension of Buyer Power Comments Submitted to the FTC and DOJ

19 Pages Posted: 18 Jan 2010  

Peter Carstensen

University of Wisconsin Law School

Date Written: January 15, 2010

Abstract

The Antitrust Division of the Department of Justice and the Federal Trade Commission have commenced a process of reviewing the Merger Guidelines that were last subject of a comprehensive revision in 1993. The agencies are holding a series of workshops and have solicited comments on a number of questions that they have formulated. The questions and the workshops, however, fail to take account of a major development in the assessment of mergers: their impact on the buying side of the market. Empirical data show that buying side effects can be quite substantial; yet the Guidelines devote only two sentences to discussing the analysis of this topic. These comments present a review of the central issues that ought to be included in comprehensive merger guidelines concerning buyer power: appropriate definition of the buying side product and geographic dimensions of the relevant markets, the likely competitive effects including the potential for such effects in various levels of market concentration, and the resulting thresholds above which more serious evaluation of mergers creating increased buyer power ought to be investigated. The basic point of these comments is that the revised Merger Guidelines should directly and clearly address the issue of buyer power resulting from mergers and provide appropriate standards for the evaluation of such effects.

Keywords: antitrust, buyer power, merger policy

JEL Classification: K2

Suggested Citation

Carstensen, Peter, Horizontal Merger Guidelines: The Omitted Dimension of Buyer Power Comments Submitted to the FTC and DOJ (January 15, 2010). Univ. of Wisconsin Legal Studies Research Paper No. 1104. Available at SSRN: https://ssrn.com/abstract=1537192 or http://dx.doi.org/10.2139/ssrn.1537192

Peter C. Carstensen (Contact Author)

University of Wisconsin Law School ( email )

975 Bascom Mall
Madison, WI 53706
United States
608-263-7416 (Phone)
608-262-5485 (Fax)

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