What Structural Presumption? Reuniting Evidence and Economics on the Role of Market Concentration in Horizontal Merger Analysis

60 Pages Posted: 28 Nov 2015 Last revised: 3 Feb 2016

Sean Patrick Sullivan

University of Iowa - College of Law

Date Written: February 1, 2016

Abstract

The "structural presumption" is a proposition in antitrust law standing for the typical illegality of mergers that would combine rival firms with large shares of the same market. Courts and commentators are rarely precise in their use of the word "presumption," and there is foundational confusion about what kind of presumption this proposition actually entails. It could either be a substantive factual inference based on economic theory, or a procedural device for artificially shifting the burden of production at trial. This paper argues that the substantive inference interpretation is the better reading of caselaw and the sounder application of the laws of antitrust and evidence. By instead interpreting the structural presumption as a formal rebuttable presumption, modern merger analysis needlessly complicates the use of market concentration evidence, and may be systematically undervaluing the probative weight of this evidence. At least in this context, a formal presumption likely confers less evidentiary weight than a simple substantive inference.

Keywords: structural presumption, Philadelphia National Bank, Baker Hughes, antitrust, economics, evidence, law and economics

JEL Classification: K21, K10, L10

Suggested Citation

Sullivan, Sean Patrick, What Structural Presumption? Reuniting Evidence and Economics on the Role of Market Concentration in Horizontal Merger Analysis (February 1, 2016). Available at SSRN: https://ssrn.com/abstract=2696109 or http://dx.doi.org/10.2139/ssrn.2696109

Sean Patrick Sullivan (Contact Author)

University of Iowa - College of Law ( email )

Melrose and Byington
Iowa City, IA 52242
United States

HOME PAGE: http://ssully.com

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