Tuesday, May 1, 2018
C. Scott Hemphill, New York University School of Law and Nancy L. Rose, Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER) provide thoughts on Mergers That Harm Sellers.
ABSTRACT: This article examines the antitrust treatment of mergers that harm sellers. We separately consider two mechanisms of harm, increased classical monopsony power and increased bargaining leverage. We show that lost upstream competition is a cognizable harm to the competitive process. Our central claim is that harm to sellers in an input market is sufficient to support antitrust liability. We defend this conclusion against the contrary view that demonstrated harm to the merging firms’ downstream purchasers or final consumers is an essential element of any antitrust claim. We further argue that claimed “efficiencies” premised on a reduction in buy-side competition are not efficiencies at all.