Monday, April 30, 2018
Ioana Marinescu, University of Pennsylvania - School of Social Policy & Practice, and Herbert Hovenkamp, University of Pennsylvania Law School; University of Pennsylvania - The Wharton School; University College London have a new paper on Anticompetitive Mergers in Labor Markets.
ABSTRACT: Mergers of competitors are conventionally challenged under the federal antitrust laws when they threaten to lessen competition in some product or service market in which the merging firms sell. Mergers can also injure competition in markets where the firms purchase. Although that principle is widely recognized, very few litigated cases have applied merger law to buyers. This article concerns an even more rarefied subset, and one that has barely been mentioned. Nevertheless, its implications are staggering. Some mergers may be unlawful because they injure competition in the labor market by enabling the post-merger firm anticompetitively to suppress wages or salaries. To the best of our knowledge no court has ever condemned a merger for this reason.