The Yale Law Journal

May 2018

Invigorating Vertical Merger Enforcement

Antitrust Law

abstract. This Feature summarizes why and how vertical merger enforcement should be invigorated. In our modern market system, vigorous vertical merger enforcement is a necessity. Strong enforcement is particularly important in markets where economies of scale and network effects lead to barriers to entry and durable market power. Even when there are parallel vertical mergers, the result may well be an anticompetitive reciprocal dealing, coordinated equilibrium rather than intense competition among efficient integrated firms. Stronger enforcement would involve several steps, including recognition that claims of elimination of double marginalization do not deserve to be silver bullets and that behavioral remedies are generally unable to prevent anticompetitive effects.

author. Professor of Economics and Law, Georgetown University Law Center. The author has greatly benefited from comments from Jonathan Baker, Dennis Carlton, Daniel Culley, Serge Moresi, Nancy Rose, Mark Ryan, Michael Salinger, Jonathan Sallet, and Carl Shapiro, as well as the Yale Law Journal editors. The author has written articles and consulted on numerous vertical merger and other exclusionary conduct matters, for the merging parties, concerned competitors, and government agencies, including some of the matters discussed here. All opinions are my own and do not necessarily reflect the views of my colleagues or consulting clients. This work was not funded by any entities.