Finding the Right Lodestar for Defining Markets

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David Balto, Matthew Lane, Dec 16, 2014

Economics is the lodestar for antitrust law and sound competition policy. Economic reasoning plays a key role in identifying the problems being litigated and framing the legal rules that will be applied to these problems. McWane Inc. v. Federal Trade Commission, currently on appeal to the 11th Circuit, has the potential for illuminating important economic concepts in an area of antitrust law that is rarely addressed on appeal—identifying the relevant market.

In McWane, the U.S. Federal Trade Commission relied on qualitative data unsupported by robust economic analysis to narrowly define a market, even though market data was available. Appellate decisions on relevant markets are sparse and this case could provide a vehicle to reassert the importance of using established economic tests to accurately gauge relevant markets.