In 2006, Competition Policy International published my article “Welfare Standards and Merger Analysis: Why Not the Best?” in its Fall issue. In the article, I presented arguments for employing a total, rather than a consumer welfare standard for evaluating and determining whether to challenge proposed mergers.
Six years later: What more is there to say?
Since the time the article was published, it is hard to think of major theoretical advances that merit serious reconsideration of the core arguments. With one possible exception, discussed below, the issues and our knowledge of them are much the same now as they were then.
Still, there have been some relevant developments worth noting. In particular, the Antitrust Division, jointly with the Federal Trade Commission, issued revised Horizontal Merger Guidelines in 2010. These include some new discussion of how the Agencies may deal with specific fact patterns. In particular, the revised Guidelines’ discussion of mergers of competing buyers and the potential these may have to enhance monopsony power bears on the welfare standard likely to be applied.