The Yale Law Journal

May 2018

Mergers that Harm Sellers

Antitrust Law

abstract. This Feature examines the antitrust treatment of mergers that harm sellers. We separately consider two mechanisms of harm, increased classical monopsony power and increased bargaining leverage. We show that lost upstream competition is an actionable harm to the competitive process. Our central claim is that harm to sellers in an input market is sufficient to support antitrust liability. We defend this conclusion against the contrary view that demonstrated harm to the merging firms’ downstream purchasers or final consumers is an essential element of any antitrust claim. Nor is it necessary for plaintiffs to demonstrate a reduction in the input quantity transacted. We further argue that claimed “efficiencies” premised on a reduction in buy-side competition are not efficiencies at all.

authors. C. Scott Hemphill is Professor of Law at New York University School of Law; Nancy L. Rose is the Charles P. Kindleberger Professor of Applied Economics at the Massachusetts Institute of Technology. Hemphill is an economic expert witness in an antitrust case alleging harm to sellers. We thank Jonathan Baker, David Balan, Peter Carstensen, Joseph Farrell, Debbie Feinstein, Nicholas Hill, Herbert Hovenkamp, Jonathan Jacobs, Jonathan Jacobson, Doug Melamed, Aviv Nevo, Jonathan Sallet, Fiona Scott Morton, Carl Shapiro, William Stallings, Tim Wu, and Matthew Yglesias for helpful comments and discussions.