Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

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Friday, August 3, 2007

Should Antitrust Consent Decrees Regulate Post-Merger Pricing?

Posted by D. Daniel Sokol

Remedies are one of the most challenging issues in antitrust.  Within the area of merger remedies, a new working paper, Should Antitrust Consent Decrees Regulate Post-Merger Pricing?, by Greg Sidak and  Farrell Malone of Georgetown University Law Center that is forthcoming in the Journal of Competition Law & Economics offers a new twist on the issues of merger remedies specific to the regulation of price.

ABSTRACT: Competitors proposing to merge sometimes propose price regulation in a consent decree as a condition of receiving merger approval. Antitrust enforcement agencies in the United States have been reluctant to use such price-regulating decrees, as they suffer from practical problems in implementation. It is less recognized, however, that the use of consent decrees to regulate post-merger prices may be unlawful. Such decrees exceed the scope of antitrust law and blur the distinction between the legislative power to regulate prices and the executive power to enforce the antitrust laws. Despite the willingness of merging parties to accept price regulation in consent decrees, economic and constitutional considerations counsel against antitrust enforcement agencies adopting this practice.

http://lawprofessors.typepad.com/antitrustprof_blog/2007/08/should-antitrus.html

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