July 1, 2020
Vertical Mergers: Enforcement Developments and Guidelines
Vertical and complementary products mergers are among the most difficult and controversial areas of antitrust. The difficulties arise from the need to weigh conflicting economic forces created by these transactions: some forces tend to reduce price and increase output and investment, while other forces can push in the opposite direction. The net effects of the these transactions are theoretically ambiguous and depend on details of economic environment. A further complication is that standard structural screens, such as concentration or other measures of market power, are less informative for vertical and complementary products mergers than they are for horizontal mergers. This makes developing Guidelines for vertical and complementary products mergers challenging.
In this session, a distinguished panel of economists who have made important contributions to the economics literature and competition policy in this area discussed the issues in the context of the recently proposed Vertical Merger Guidelines in the US and the existing Guidance on the Assessment of Non-Horizontal Mergers in the EU. Among the topics addressed were the appropriate scope for Guidelines in light of the economics literature and policy experience, similarities and differences between the approaches taken in the US and Europe, and the application of Guidelines in practice.