Kwoka book cover – CONTROLLING MERGERS AND MARKET POWER

CONTROLLING MERGERS AND MARKET POWER:
A Program for Reviving Antitrust in America

Summary

John Kwoka’s Controlling Mergers and Market Power: A Program for Reviving Antitrust in America is an important and timely contribution from a prominent antitrust economist and policy advisor.

It has been many decades since questions about antitrust enforcement have been so prominent in political, economic, and scholarly debate. Mergers in countless industries, rising concentration throughout the economy, and the dominance of tech giants have brought renewed attention to the role and the responsibility of antitrust policy.

But scholarly analysis of these issues, which Professor Kwoka has already contributed to in many ways, is not by itself enough. Once the underlying problems have been identified and documented, commentators and policymakers need to take the next step and provide sensible, enforceable, and economically rational proposals to address them.

The purpose of this book is to do just that. Controlling Mergers and Market Power sets out a comprehensive, detailed, and rigorous program to revive antitrust, and merger control in particular, in the U.S. It analyzes the specific failures and weaknesses of current policy.

Then, drawing on contemporary economic research and experience, it develops a series of specific proposals for reforming and revitalizing antitrust policy. Collectively, these reforms would reverse the trend toward a narrow, permissive antitrust policy, and strengthen competition in the economy.

Few are better positioned to set out a program for reforming antitrust. Professor Kwoka’s earlier work on merger policy has been credited for its insights and for prompting renewed attention to the issues. In this new breakthrough contribution, he takes us through the next and necessary steps to revive antitrust in America.

John Kwoka is the Neal F. Finnegan Distinguished Professor of Economics at Northeastern University. He has previously taught at several other universities and served in various capacities at the Federal Trade Commission, the Antitrust Division of the Justice Department, and the Federal Communications Commission. He is the author and editor of several books and numerous articles in professional journals, has lectured and consulted widely on the subject of competition and competition policy, and is regularly quoted in the media.

Table of Contents

Foreword

Preface

CHAPTER 1
Introduction

CHAPTER 2
The Eroding State of Competition in the U.S. Economy 

CHAPTER 3
The Erosion of Merger Control

CHAPTER 4
Re-establishing Market Structure:
Merger Guidelines and the Structural Presumption

CHAPTER 5
Rethinking “Plus and Minus” Factors:
Efficiencies, Entry, and Potential Competition

CHAPTER 6
Revisiting Other Merger Issues:
Nonprice Effects, Monopsony, and Remedies

CHAPTER 7
Reviewing Broader Issues:
Vertical Mergers, Common Ownership, and Tech

CHAPTER 8
Reforming the Merger Control Process:
Retrospectives, Resources, and the Judiciary

CHAPTER 9
Controlling Mergers:
A Summing Up

APPENDIX A
Recommendations 

APPENDIX B
Comments on FTC Remedies Study

APPENDIX C
Bibliography

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Questions to the author

What are the key take-aways of your last book Controlling Mergers & Market Power: A program for reviving Antitrust in America?

Is there a need for a reform on mergers and if so, why?

What substantive issues require fixing in the US merger control?

What concrete changes US Agencies and policymakers should prioritize?

Testimonials

John Kwoka’s latest contribution to the debate over merger enforcement in the U.S. is a powerful call for action. It exposes how courts (and enforcers) have grown overly cautious, ignoring the Clayton Act mandate to block mergers that “may” substantially reduce competition or “tend” to create a monopoly, and instead let fear of Type I (overenforcement) errors put consumers and competition at risk in many sectors of our economy. His prescription for revitalizing merger enforcement is thoughtful, practical, and achievable. There are indeed “mergers that should never get out of the boardroom.” And for those that do, “Controlling Mergers and Market Power” outlines how antitrust enforcement can be made much more effective.

Bill Baer

Visiting Fellow - Governance Studies, Brookings Institute

“Controlling Mergers and Market Power” makes a useful and timely contribution to the antitrust debate. It offers concrete proposals to make progress in addressing growing market power by providing a set of sensible analytical tools and concrete proposals for reform that are rooted in modern economic thinking. It should be read and taken seriously by anyone interested in the contemporary policy debate about reinvigorating antitrust. And that most definitely includes the antitrust enforcers themselves.

Jonathan Baker

Research Professor of Law, American University

John Kwoka has taken on a set of crucial questions for our time in this comprehensive book. He not only makes a convincing case for rethinking our current approach to antitrust, but also supplies thoughtful and practical suggestions. A must-read for participants in this ongoing conversation!

Sara Fisher Ellison

Senior Lecturer, MIT

John Kwoka is one of our leading scholars in antitrust policy and industrial organization economics. His earlier book “Mergers, Merger Control, and Remedies,” described empirical evidence that merger control has lost its edge and that many studied mergers have harmed competition. Here he draws on that evidence and proposes a dozen inter-related policies addressing what should be done to restore or improve merger control, which is central to government antitrust enforcement. Enforcers, practitioners, judges, academics, and students around the world will want this book on their shelves and will take it down often.

Joseph Farrell

Professor of Economics, University of California, Berkeley

If you want to know how we arrived at the dismal state of antitrust enforcement in this country and what we can do to fix it, read this book. John Kwoka offers a detailed menu of reforms backed by careful research and a deep understanding of the antitrust environment. This book is an essential resource for anyone involved in competition policy. It is also a great read for anyone interested in why production in our economy has become so concentrated and how we can get to a better place.

Richard Gilbert

Emeritus Professor of Economics, University of California, Berkeley

John Kwoka made his mark by collecting and analyzing studies of past mergers. His work on merger retrospectives created a powerful case that merger enforcement had been too weak. In his new book, Kwoka takes the next step and lays out what must be done to reform merger enforcement. In nine chapters of clear and lively prose, he recommends stiffening structural presumptions, cabining the showing of efficiencies, and reinvigorating potential competition doctrine, among many others. Everyone in the antitrust community should read this book.

John Kirkwood

Professor of Law, Seattle University

John is the rare economist who understands that the purpose of antimonopoly law is to protect our democracy and to make every individual more free, more secure, and more prosperous. John has demonstrated conclusively that the failures of the reigning philosophy of competition are not restricted to a few corners of the economy, but are systemic in nature. John has long been a leader in the fight against dangerous concentrations of power and control, and his new work continues to light the way forward.

Barry Lynn

Executive Director, Open Markets Institute

Professor Kwoka’s most recent contribution, “Controlling Mergers and Market Power,” marks an important milestone in advancing the case for stronger merger enforcement. The volume makes the essential connection between economic evidence of under-enforcement in the U.S. and its likely role in creating and sustaining the problem of rising concentration. This approach gives significant weight to Kwoka’s detailed policy recommendations for strengthening merger enforcement. The work provides an essential resource for enforcers, legislators, and policymakers for implementing meaningful change in an area of antitrust law that has indelible effects on competition, consumers, and workers.

Diana Moss

President, American Antitrust Institute

As John Kwoka points out clearly and powerfully in this book: the U.S. had a very competitive economy 20 years ago in many industries which now seems to be characterized by uncompetitive oligopolies. The answer to why this has happened and what should be done about it is the subject of this book. If competition policy does not control mergers effectively, it permits economic injustices which effect all consumers. Kwoka's call to reinvigorate U.S. competition policy and re-enforce that standards that have been allowed to slip deserves to be heeded by policy makers.

Michael Pollitt

Professor of Business Economics, Cambridge Judge Business School, University of Cambridge

This leading scholar of U.S. retrospectives now turns his attention to the future: 44 implementable recommendations with the aim of making American markets more competitive again. None of the hot and controversial issues in antitrust is left out — monopsony, big tech, the return to structural presumptions, and common ownership. Decidedly thought-provoking, and a must-read!

Martin Schmalz

Associate Professor of Finance at Saïd Business School, University of Oxford

​John Kwoka has been at the forefront of academic and policy discussions of merger enforcement. His work needs to be taken seriously by practitioners in competition authorities and the private bar. The book is readable and insightful. Even where I disagree with him, I highly respect his views.

D. Daniel Sokol

Professor of Law, University of Florida

This book is important. It sets out a comprehensive program for expanding merger enforcement to stop the inevitable consolidation that has occurred over the past 30-40 years. Kwoka’s agenda includes the Agencies paying attention to their own Guidelines, placing greater attention on the structural presumption, expanding enforcement of potential competition and vertical mergers. Based on the results of his own and others’ studies, he also calls for the Agencies to “just say no,” rather than mandate remedies that turn out to be unable to prevent anticompetitive effects. I hope that enforcers read Kwoka’s book and take it to heart, and legislators insist that they do.

Steven Salop

Professor of Economics and Law, Georgetown University

American antitrust is completely, utterly broken. Kwoka’s previous book Mergers, Merger Control, and Remedies overwhelmingly demonstrated the harm from highly concentrated industries. His latest book CONTROLLING MERGERS AND MARKET POWER is packed with up to date research, it is convincingly argued, and is required reading if you want to know how we can fix antitrust. Every regulator and politician in America should read it.

Jonathan Tepper

Author of The Myth of Capitalism: Monopolies and the Death of Competition

John Kwoka has long been recognized as a leading expert in competition economics. Now he has distilled his views and findings from three decades of research and practice into a readable, authoritative, and insightful book. Anyone in the antitrust community who’s interested in looking ahead in merger policy must read this book.

Tommaso Valletti

Professor of Economics, Imperial College Business School; Chief Competition Economist, European Commission (2016-2019)

If you want a sensible menu of feasible actions to strengthen merger enforcement under the antitrust laws of the United States, John Kwoka's book – short but powerful – is a must-read.

Lawrence White

Stern School of Business, New York University
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