We present a typology of cases involving mergers that could be viewed as eliminating future competition, motivated by recent debates in the antitrust literature about mergers that pose this kind of competitive threat. The different types of cases are distinguished by whether one or both firms have products that are on the market, and whether the nature and future competitive impact of products in development are clear. We show how these distinctions affect the types of economic evidence that can be brought to bear on the assessment of competitive effects. We illustrate our typology using recent challenges brought by the Federal Trade Commission.

By Andrew Sweeting, Joel Schrag & Nathan Wilson1

 

I. INTRODUCTION

There has been much recent debate about whether antitrust agencies have been sufficiently attentive to preemptive mergers, where one firm acquires another that it expects will become a more vigorous competitor in the future.2 The suggestion, sometimes described in terms of “killer acquisitions” (Cunningham et al., 2020), “kill zones” (The Economist, 2018),3 or, less graphically, “the elimination of nascent competition,” is that agencies may have allowed transactions that, while perhaps not substantially reducing competition in the short-run, deprived consumers in the future of lower prices, better products, and more variety. It has been claimed that these types of mergers have been particularly common in certain sectors, such as the tech and p

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