Mergers Involving Nascent Competition

Stanford Law and Economics Olin Working Paper No. 566

25 Pages Posted: 17 Jan 2022 Last revised: 16 Aug 2022

Date Written: January 14, 2022

Abstract

Mergers involving nascent competition are a hot topic in antitrust circles, especially in light of the pending FTC case against Facebook; but the thinking about the topic is nascent, too. This paper is intended to contribute to that thinking and to discuss a variety of questions that have not previously been discussed together. It explains that, while the vast majority of such mergers are likely to be benign or procompetitive, some might be very harmful to competition and economic welfare. It argues that the latter can in principle be prohibited under existing Section 2 law, suggests criteria for doing so, and addresses policy concerns about merger efficiencies, error costs, the impact of heighted scrutiny of such mergers on venture capital investment, and post-acquisition challenges to such mergers.

Keywords: antitrust, nascent competition, mergers, monopolization, Section 2

JEL Classification: K21, L40, L41

Suggested Citation

Melamed, Doug, Mergers Involving Nascent Competition (January 14, 2022). Stanford Law and Economics Olin Working Paper No. 566, Available at SSRN: https://ssrn.com/abstract=4009229 or http://dx.doi.org/10.2139/ssrn.4009229

Doug Melamed (Contact Author)

Stanford Law School ( email )

559 Nathan Abbott Way
Stanford, CA 94305-8610
United States

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