Antitrust & Competition Policy Blog

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

A Member of the Law Professor Blogs Network

Saturday, November 19, 2011

Recovery in the United States for Price-Fixing Abroad: The Future of FTAIA Litigation

Posted by D. Daniel Sokol

Alicia Batts & Keith Butler (Proskauer) has written on Recovery in the United States for Price-Fixing Abroad: The Future of FTAIA Litigation.

ABSTRACT: As global economic trade has increased, so has the number of price-fixing plaintiffs who have sought recovery in U.S. courts under U.S. antitrust laws for damages suffered as a result of cartel activity abroad. Historically, plaintiffs suing in U.S. courts under U.S. laws have had a difficult time getting beyond the pleadings stage in cases targeting foreign price-fixing. But that may be changing.

Recent cases interpreting the Foreign Trade Antitrust Improvements Act ("FTAIA"), the statute that governs the extraterritorial application of U.S. antitrust laws, may have lowered the bar for plaintiffs seeking recovery under the Sherman Act for anticompetitive behavior that occurs overseas but affects the U.S. economy. These cases have criticized the prevailing view that the FTAIA enhances the burden borne by plaintiffs to establish federal court jurisdiction in cases involving overseas conduct, and have favored, instead, the view that the statute merely adds an element to an antitrust cause of action, one that defendants must rebut to prevail on a motion to dismiss.

Under this new rule, defendants may find it more difficult to win early dismissal, and avoid expensive discovery, in antitrust cases involving foreign conduct affecting U.S. commerce. Because there is now a circuit split on the issue, it is ripe for Supreme Court attention. Given the increase, and increasing significance, of global trade, this is an invitation the Court should accept. Recent cases have also refined the scope of the FTAIA and its application to indirect purchaser claims under state law. The emerging view suggests that U.S. courts are actively policing overseas conduct whose impact is felt on U.S. shores.

November 19, 2011 | Permalink | Comments (0) | TrackBack (0)

Friday, November 18, 2011

Vertical Agreements in EU Competition Law

Posted by D. Daniel Sokol

Frank Wijckmans (Contrast European and Business Law) and Filip Tuytschaever (Contrast European and Business Law) have edited Vertical Agreements in EU Competition Law.

BOOK ABSTRACT:

  • The only book aimed at practitioners to give complete coverage of vertical agreements under the new legislative framework
  • Indispensible tool for drafting or reviewing vertical agreements, providing practical solutions to commercial problems
  • Overviews of various distribution formulas for speed of reference
  • Practical insight from authors who assisted the European Commission in the drafting and reviewing of the new Regulation

November 18, 2011 | Permalink | Comments (0) | TrackBack (0)

Global Cartels Handbook: Leniency: Policy and Procedure

Posted by D. Daniel Sokol

Samantha Mobley (Baker & McKenzie) & Ross Denton (Baker & McKenzie) haved edited Global Cartels Handbook: Leniency: Policy and Procedure.

BOOK ABSTRACT:

  • The only country-by-country work to focus on leniency programmes
  • Accessible and comprehensive information enabling a practitioner to rapidly assess the requirements for submitting a leniency application in any of the 55 jurisdictions covered
  • Extensive comparative introduction helps users begin to assess which countries provide the most appropriate forum for leniency application
  • Unique geographic reach and depth of review of leniency programmes covered
  • Includes a quick reference table to the leniency programmes in place around the world

November 18, 2011 | Permalink | Comments (0) | TrackBack (0)

The Enforcement of Competition Law in the Waste Sector: Review in Light of the Relevant Market’s Definition

Posted by D. Daniel Sokol

Christophe Verdure, Facultes Universitaires Saint-Louis has written on The Enforcement of Competition Law in the Waste Sector: Review in Light of the Relevant Market’s Definition.

ABSTRACT: Waste management has gradually become an issue of major economic importance. Many operators have developed economic activities, creating, in so doing, a host of markets. The application of competition law on such markets will be assessed in this contribution, regarding more especially the definition of the relevant market.

November 18, 2011 | Permalink | Comments (0) | TrackBack (0)

Thursday, November 17, 2011

Consumer search costs and the incentives to merge under Bertrand Competition

Posted by D. Daniel Sokol

Jose L. Moraga-Gonzalez (IESE Business School) and Vaiva Petrikaite (University of Groningen) describe Consumer search costs and the incentives to merge under Bertrand Competition.

ABSTRACT: This paper studies the incentives to merge in a Bertrand competition model where firms sell differentiated products and consumers search the market for satisfactory deals. In the pre-merger market equilibrium, all firms look alike and so the probability a firm is next in the queue consumers follow when visiting firms is equal across non-visited firms. However, after a merger, insiders raise their prices more than the outsiders, so consumers search for good deals first at the non-merging stores and only then, if they do not find any product satisfactory enough, at the merging stores. When search cost are negligible, the results of Deneckere and Davidson (1985) hold. However, as search costs increase, the merging firms receive fewer customers, so mergers become unprofitable for sufficiently large search costs. This new merger paradox is more likely the higher the number of non-merging firms.

November 17, 2011 | Permalink | Comments (0) | TrackBack (0)

Developments at the Antitrust Division & The 2010 Horizontal Merger Guidelines – One Year Later

Posted by D. Daniel Sokol

Sharis Pozen (DOJ) has delivered a speech Developments at the Antitrust Division & The 2010 Horizontal Merger Guidelines – One Year Later.

November 17, 2011 | Permalink | Comments (0) | TrackBack (0)

The Increasing Role of Economic Evidences in Prosecution of Cartels

Posted by D. Daniel Sokol

Murtuza Bohra, National Law Institute University (NLIU), Bhopal has written on The Increasing Role of Economic Evidences in Prosecution of Cartels.

ABSTRACT: People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. (Adam Smith, The Wealth of Nations, 1776) The aforesaid statement was said in the 18th century but it still holds some water in the 21st century. The only thing which has changed is that we have come closer to bind perpetrators of such conspiracies by making our rules more comprehensive through a mature understanding of law. The competition law1 which is commonly known as anti-trust law has always been a tough law to implement for any country because of the plethora of challenges. One of those challenges posed is by the unavailability of evidences in the prosecution of cartels. Cartels are 'the most egregious violations of competition law. The intention of this paper is to explore this challenge and also to study the role of economic evidences as a special case of development in the antitrust litigation.

Further, this paper has undertook a special case of EU and US antitrust laws and cases decided to discuss the aforesaid issue. At last the Indian perspective has dealt discussing the nature of growth of competition law in India.

November 17, 2011 | Permalink | Comments (0) | TrackBack (0)

Steve Calkins Appointed to Head of the Irish Competition Authority’s Mergers Division

Posted by D. Daniel Sokol

Christmas comes early for the people of Ireland.  Steve Calkins, Associate Vice President for Academic Personnel and Professor of Law at Wayne State has been appointed a Member of the Irish Competition Authority.  He takes his new post as Head of the Authority’s Mergers Division on the 1st of December.

Steve is one of the great thinkers of antitrust.  He has written some very interesting and important scholarship and also distinguished himself as the General Counsel of the FTC.  This is a great pick up for the Irish Competition Authority.

 

November 17, 2011 | Permalink | Comments (0) | TrackBack (0)

Did Lloyds/HBOS Mark the Failure of an Enduring Economics Based System of Merger Regulation?

Posted by D. Daniel Sokol

Andreas Stephan, University of East Anglia (UEA) - Centre for Competition Policy asks Did Lloyds/HBOS Mark the Failure of an Enduring Economics Based System of Merger Regulation?

ABSTRACT: UK Merger control is an example of regulation which has shifted from a public interest regime to an economics based system of competition assessment. This paper asks whether the merger of Lloyds TSB and HBOS in 2008, on public interest grounds, marked the failure of an enduring economics based system of merger regulation. It argues that far from marking a failure, the Lloyds TSB/HBOS merger highlights the importance of only allowing public interest interventions on exceptional grounds in specific industries. Economics based merger control is transparent and preferable to general public interest assessments, which are unpredictable and open to abuse.

November 17, 2011 | Permalink | Comments (0) | TrackBack (0)

The End of SSRN? Google Scholar May be a Game Changer

Posted by D. Daniel Sokol

See the link here.

November 17, 2011 | Permalink | Comments (0) | TrackBack (0)

Call for Papers: 8th Annual Centre for Competition Policy Conference, 14-15 June 2012 - “What do Public and Private Sanctions in Competition Policy Actually Achieve?

Posted by D. Daniel Sokol

Call for Papers
8th Annual Centre for Competition Policy Conference
14-15 June 2012, University of East Anglia, Norwich, UK.

What do Public and Private Sanctions in Competition Policy Actually Achieve?
Competition Authorities have, in recent years, escalated the level of sanctions imposed on undertakings that have infringed competition laws, some going so far as to criminalise hard core cartel behaviour. Alongside this, they are making concerted efforts to encourage the victims of competition law abuses to bring private actions for damages against those responsible. Despite a general consensus that certain types of competition law infringements should be punished, there is limited agreement – even within the EU – as to what form this punishment should take. It is also not always entirely clear what sanctions aim to achieve. The conference explores the theory and evidence on public and private sanctions and what they could achieve or have achieved in practice. Contributions will include a mixture of theoretical and empirical approaches from different disciplines.

The Call for Papers is open to academics and researchers in the fields of law, economics, and political science.

Any interested person should produce a full draft of a paper or an abstract of at least 1000 words, to be submitted by Monday 16th January 2012. Decisions on successful submissions will be communicated by Thursday 1st March 2012.

Full presentations or draft papers will be required one month prior to the conference.

Submissions and queries should be emailed to the conference organisers, Sebastian Peyer ([email protected]) and Andreas Stephan ([email protected]).

--

Note: I got answers to the following questions from the organizers

1.       Can the submission have been published by the time of the conference? Yes, put please state where

2.       what if it is merely accepted? Yes

3.       will UAE cover expenses? No

4.       can PhD candidates submit? Yes

November 17, 2011 | Permalink | Comments (0) | TrackBack (0)

The EU Competition Law Fining System

Posted by D. Daniel Sokol

Damien Geradin, Tilburg University - Tilburg Law and Economics Center (TILEC), University of Michigan Law School, Tilburg Law School explores The EU Competition Law Fining System.

ABSTRACT: The objectives of this report are to: describe the fining policy of the European Commission for breach of EU competition rules; assess this policy in light of the criticisms that have been made by academics, practitioners and other stakeholders; and to the extent these criticisms are justified, make concrete proposals to improve the Commission’s fining policy.

This discussion paper does not suggest that undertakings that have breached EU competition rules should get off the hook lightly. Sanctions should be part of all legal regimes and this is also true for competition law. Because of the severe harm that can be created by competition law infringements, sanctions for such infringements must be sufficiently strict to ensure deterrence. Against this background, the proposals made in this discussion paper seek to improve the efficiency and fairness of such sanctions, and ensure that they are made at the least cost to society. Some of these proposals are easier to implement than others, and it is not suggested that all proposals should be implemented at once.

November 17, 2011 | Permalink | Comments (0) | TrackBack (0)

Wednesday, November 16, 2011

The Narcotic Effect of Antitrust Law in Professional Sports: How the Sherman Act Subverts Collective Bargaining

Posted by D. Daniel Sokol

Michael H. LeRoy, University of Illinois College of Law,has written on The Narcotic Effect of Antitrust Law in Professional Sports: How the Sherman Act Subverts Collective Bargaining.

ABSTRACT: Using textual analysis and data from federal court opinions, I explore the relationship between collective bargaining and antitrust litigation in baseball, football, basketball, and hockey. Since collective bargaining began in these sports in the 1960s, there have been 21 strikes or lockouts. Baseball and football have had the most labor strife, with 8 work stoppages apiece – but their experiences have been very different. Because the Supreme Court ruled that baseball is completely exempt from antitrust law, players have had to use the strike weapon under the National Labor Relations Act (NLRA) to liberalize free agency and increase team competition for their services. Football players, in contrast, staged several unsuccessful strikes in the 1970s and 1980s. Because of their weak bargaining power, they decertified their union in 1991 and 2011. This gave them standing as individuals under the Sherman Act to challenge NFL restrictions on their labor market mobility. Using detailed case materials, I show how a district court constantly supervised their labor agreement from 1993-2011.

My study draws from legal and industrial relations theories to explain how labor agreements in pro sports are settled by collective bargaining or antitrust litigation. First, when courts do not define the antitrust-labor law boundary so that labor disputes are exempt from their jurisdiction, they open an alternative path to bargaining these agreements. Second, when courts entertain antitrust lawsuits, they raise the odds that economic weapons under the NLRA will not be used because of judicial inclination to protect players from irreparable harm and injury resulting from league-imposed labor market restrictions. Third, as this behavior becomes a pattern, collective bargaining is disrupted by faulty information as players, unions, and leagues guesstimate the odds that their differences will be settled at a collective bargaining table or in a court supervised negotiation. Fourth, as players negotiate better agreements in court compared to the bargaining table, they become addicted to this settlement process.

To apply these theories, I use data from 82 federal antitrust court opinions from 1965-2011. Individual players are the most common antitrust plaintiff (65.5%), compared to player unions (8.6%). This means the dispute resolution processes of collective bargaining are supplanted by litigation in federal courts. And except for baseball players, pro athletes often lose labor disputes when economic weapons are used. Their dismal bargaining experience substantially improves, however, by suing under the Sherman Act. In court, players win 43.9% of the rulings, compared to 46.3% for the leagues. These rulings – for example, an injunction that ends a league’s restrictions on free agency – can have dramatic consequences for antitrust settlements that are later codified in a collective bargaining agreement. Textual analysis of cases supports this conclusion.

Applying the “narcotic effect” theory from industrial relations, I conclude that antitrust litigation addicts players in football and basketball to the adjudicatory procedures of the Sherman Act – thereby replacing collective bargaining. This is undesirable because Congress intended, under the NLRA, to leave labor and management free from government interference as they adjust their differences. In contrast, baseball’s total exemption from antitrust law, combined with its high frequency of work stoppages, shows what happens when the opiate of antitrust litigation is not available to players: In time, labor and management establish an informed bargaining protocol, and work through their issues by making difficult concessions on their own. As long as courts entertain these sports lawsuits under the Sherman Act, collective bargaining will be subverted.

 

November 16, 2011 | Permalink | Comments (0) | TrackBack (0)

Industrial Policy and European Merger Control - A Reassessment

Posted by D. Daniel Sokol

Damien Geradin, Tilburg University - Tilburg Law and Economics Center (TILEC), University of Michigan Law School, Tilburg Law School and Ianis Girgenson address Industrial Policy and European Merger Control - A Reassessment.

ABSTRACT: The relationship between industrial policy and merger control is one of the most controversial topics in European competition law. The debate has become particularly intense in recent years given the perceived failure of free markets and the return of government intervention into the economy.

In Europe, the concepts of industrial policy and competition policy conjure up “a great ideological divide.” Modern competition policy is inspired by the neoliberal ideas of the Chicago school that place great confidence in free markets. Industrial policy reflects a more interventionist approach, based on the assumption that markets are fallible and that governments should correct their imperfections.

Industrial policy dominated the early years of European merger control. However, following the adoption of the Merger Regulation in 1989, the European Commission largely ignored industrial policy considerations, focusing instead on the strict implementation of the competition-based test. This approach was unsurprising given the triumph of the neoliberal agenda and the corresponding lack of interest in or support for industrial policy.

However, the challenges of globalisation and the 2008 economic crisis inspired a growing number of observers to argue for an increased intervention of public authorities into the economy. The role of competition policy has also been called into question. In particular, some observers argued that EU merger control prevented industrial consolidation. In several recent cases, national governments set aside merger control rules to facilitate the creation of “national champions” or used them as a protectionist tool to disrupt undesirable transactions.

Against this background, we seek to address the issue of whether merger control rules should be relaxed in order to accommodate industrial policy objectives. Answering this question is complicated by the lack of clarity of the concept of “industrial policy.” In Section II of this paper we define industrial policy and summarise the debate relating to this concept. In Section III, we demonstrate that industrial policy has always been present in European merger control even though its influence has decreased considerably following the adoption of the Merger Regulation. In Section IV, we describe how globalisation and the 2008 economic crisis led to the revival of industrial policy in Member States and at the EU level. In Section V, we attempt to determine whether industrial policy should take priority over competition policy in the area of merger control in light of these developments.

Our conclusions are twofold. First, carefully selected industrial policies can successfully address market failures, e.g., by supporting national or European champions. Second, we do not think that merger control rules should be relaxed or set aside in order to facilitate the creation of industrial champions. On the contrary, correct application of merger control rules enhances the efficiency of industrial policies.

November 16, 2011 | Permalink | Comments (0) | TrackBack (0)

Public Restraints and Teeth Whitening - Don't Call me an Anti-Dentite

Posted by D. Daniel Sokol

Today's WSJ has a great article of how a professional services group (dentists) may use regulation to create anti-competitive restraints to limit entry.  Previously, I have written on public restraints - Limiting Anti-Competitive Government Interventions that Benefit Special Interests

November 16, 2011 | Permalink | Comments (1) | TrackBack (0)

Competition and Crisis in Mortgage Securitization

Posted by D. Daniel Sokol

Michael Simkovic, Seton Hall Law School, describes Competition and Crisis in Mortgage Securitization.

ABSTRACT: U.S. policymakers often treat market competition as a panacea. However, in the case of mortgage securitization, policymakers’ faith in competition is misplaced. Competitive mortgage securitization has been tried three times in U.S. history - during the 1880s, the 1920s, and the 2000s - and every time it has failed. Most recently, competition between mortgage securitizers led to a race to the bottom on mortgage underwriting standards that ended in the late 2000s financial crisis. This article provides original evidence that when competition was less intense and securitizers had more market power, securitizers acted to monitor mortgage originators and to maintain prudent underwriting. However, securitizers’ ability to monitor originators and maintain high standards was undermined as competition shifted market power away from securitizers and toward originators. Although standards declined across the market, the largest and most powerful of the mortgage securitizers, the Government Sponsored Enterprises (“GSEs”), remained more successful than other mortgage securitizers at maintaining prudent underwriting. This article proposes reforms based on lessons from the recent financial crisis: merge the GSEs with various government agencies’ mortgage operations to create a single dedicated mortgage securitization agency that would seek to maintain market stability, improve underwriting, and provide a long term investment return for the benefit of taxpayers.

November 16, 2011 | Permalink | Comments (0) | TrackBack (0)

In Search of Alterity: On Google, Neutrality, and Otherness

Posted by D. Daniel Sokol

Marcelo Thompson, The University of Hong Kong, Faculty of Law; Law and Technology Centre is In Search of Alterity: On Google, Neutrality, and Otherness.

ABSTRACT: Discourses on network neutrality have often, if not always, been introduced without any more in-depth evaluation of their normative bearings. This article pursues such an evaluative approach against a specific empirical backdrop. It inquires into that which has been the archetypal voice in network neutrality discourses: Google’s. In doing so, the article reveals as much about Google’s views on network neutrality as it does about the normative context and regulatory implications of Google’s own activities. Drawing on policy propositions formally put forward by Google, the article demonstrates that Google’s support for network neutrality relates to a broader normative culture that Google’s propositions advance. Such is a culture in which Google’s possibilities of reasoning and acting upon its reasons assume a degree of priority in relation to those of other actors in the information environment. The article demonstrates that the method of such a culture is the nullification, neutralization of equal possibilities of reasoning and action by other actors but Google. It explains the incoherence of Google’s overall approach and refutes the idea that other actors – here ISPs – should be treated more detrimentally than Google due to their being an Internet bottleneck in a way that Google arguably is not. Discussing the normative contours of Google’s influence, the article points at the limitations of existing theories about the regulation of “search” and suggests an alternative theoretical model that focuses on search from a broader perspective within the regulation of the information environment. In the model proposed, neutrality does not play any role – reason and alterity do.

November 16, 2011 | Permalink | Comments (0) | TrackBack (0)

Tuesday, November 15, 2011

Dynamic Competition and Current Merger Policy: A Panel Discussion

Posted by D. Daniel Sokol

The Henry G. Manne Program in Law & Economics Studies presents A Panel Discussion on Dynamic Competition and Current Merger Policy to be held at George Mason University School of Law, Wednesday, December 14, 2011. The conference will run from 8:30 A.M. to 12:00 P.M.

Click Here to Register for this Program

OVERVIEW:

Traditional merger analysis focuses on the degree to which a combination of producers is likely to lessen competition on price, output, and quality.  The relationship between short-run market performance and innovation, however, is uncertain.  In “Schumpeterian” competition, markets may be characterized by high degrees of concentration, but competition is still vibrant as firms jockey to displace the market leader through innovation.  Thus, placing too much emphasis on short-run indicia of competition in dynamic industries may harm consumers in the long run.  Recent high-profile mergers in rapidly evolving industries have brought the potential conflicts between the goals of promoting short-run competition and innovation into relief.

On December 14th, the Law & Economics Center at George Mason University School of Law will host a half-day symposium entitled: “Dynamic Competition and Current Merger Policy.”   This program will examine topics such as:

  • What do we know about the relationship between short-run competition and innovation?
  • To what extent do agencies account for dynamic considerations in merger analysis?
  • Do the 2010 Merger Guidelines mark an improvement in incorporating dynamic considerations?
  • What should the agencies count as efficiencies?
  • What weight should dynamic efficiencies be given in merger analysis?

AGENDA:

8:00-8:30am                Breakfast

8:30-10:00am              Panel 1:  Dynamic Concerns in Competitive Effects Analysis

Moderator:       James Cooper, Law & Economics Center

Panelists:
Howard Shelanksi, Georgetown University Law Center

D. Bruce Hoffman, Hunton & Williams LLP

Gregory J. Werden, U.S. Department of Justice

Alden Abbot, Federal Trade Commission

10-10:15am                 Break

10:15 – 11:45  am       Panel 2: Dynamic Efficiencies & Merger Analysis

Moderator:       Jonathan Baker, American University School of Law

Panelists:
Joshua D. Wright, George Mason University School of Law

Hugh M. Hollman, Jones Day

Michael Mandel, Progressive Policy Institute

Robert A. Lipstein, Crowell & Moring LLP

11:45am                      Adjourn

VENUE:

George Mason University School of Law
3301 Fairfax Drive
Arlington, VA 22201

The Henry G. Manne Program in Law & Economics honors the legacy of Henry G. Manne, Dean Emeritus of George Mason Law School and founder of the Law & Economics Center. Manne was a trailblazer in the development of law and economics, not only as a prominent and influential scholar, but also as an academic entrepreneur. He spurred the development of law and economics into the most influential area of legal scholarship through his Economics Institutes for Law Professors and Law Institutes for Economics Professors. The Manne Program promotes law-and-economics scholarship by funding faculty research and hosting research roundtables and academic conferences.

 

November 15, 2011 | Permalink | Comments (0) | TrackBack (0)

Nested Logit or Random Coefficients Logit? A Comparison of Alternative Discrete Choice Models of Product Differentiation

Posted by D. Daniel Sokol

Laura Grigolon, Katholieke Universiteit Leuven - Faculty of Business and Economics (FBE) and Frank Verboven, Katholieke Universiteit Leuven - Faculty of Business and Economics (FBE) ask Nested Logit or Random Coefficients Logit? A Comparison of Alternative Discrete Choice Models of Product Differentiation.

ABSTRACT: We start from an aggregate random coefficients nested logit (RCNL) model to provide a systematic comparison between the tractable logit and nested logit (NL) models with the computationally more complex random coefficients logit (RC) model. We first use simulated data to assess possible parameter biases when the true model is a RCNL model. We then use data on the automobile market to estimate the different models, and as an illustration assess what they imply for competition policy analysis. As expected, the simple logit model is rejected against the NL and RC model, but both of these models are in turn rejected against the more general RCNL model. While the NL and RC models result in quite different substitution patterns, they give robust policy conclusions on the predicted price effects from mergers. In contrast, the conclusions for market definition are not robust across different demand models. In general, our findings suggest that it is important to account for sources of market segmentation that are not captured by continuous characteristics in the RC model.

November 15, 2011 | Permalink | Comments (0) | TrackBack (0)

The Price Effects of a Large Merger of Manufacturers: A Case Study of Maytag-Whirlpool

Posted by D. Daniel Sokol

For a merger that created lots of talk about the lack of antitrust enforcement under President Bush (see here for Baker & Shapiro, see here for Pitofsky, see here for my survey of practitioners that paints an alternative view from Baker/Shapiro and Pitofsky) we now have some empirical work done on the effects of Maytag-Whirlpool.  Orley C. Ashenfelter (Princeton), Daniel S. Hosken (FTC), and Matthew C. Weinberg (Bryn Mawr) has posted The Price Effects of a Large Merger of Manufacturers: A Case Study of Maytag-Whirlpool.

ABSTRACT: Many experts speculate that U.S. antitrust policy towards horizontal mergers has been too lenient. We estimate the price effects of Whirlpool’s acquisition of Maytag to provide new evidence on this debate. We compare price changes in appliance markets most affected by the merger to markets where concentration changed much less or not at all. We estimate price increases for dishwashers and relatively large price increases for clothes dryers, but no price effects for refrigerators or clothes washers. The combined firm’s market share fell across all four affected categories and the number of distinct appliance products fell.

November 15, 2011 | Permalink | Comments (0) | TrackBack (0)