This article is a part of the Merger Guidelines Symposium symposium.
The Horizontal Merger Guidelines have brought discipline to the unruly world of merger analysis; but have also accommodated advances in our understanding of the myriad ways in which firms compete and how mergers affect such competition. However, in cases where there is better information about the effects of the merger than there is about the relevant market, I would change the Guidelines to allow analysis that bypasses market delineation.
My attorney colleagues would immediately point me to section 7 of the Clayton Act that seems to demand market definition because of its reference to a “line of commerce” and “section of the country.” Indeed, Judge Brown in Whole Foods said that the FTC’s proposal to dispense with market definition was “in contravention of the statute itself.”
However, I would naively point them to section 1 of the Sherman Act that dispenses with market definition in establishing market power or monopoly power; and in establishing anticompetitive effects under the rule of reason. Why should it be different for mergers?
For consummated mergers, like the FTC’s Evanston case, effects were proven directly; and in many unilateral effects cases, “more direct” proof of effects is possible. In the Oracle case, for example, the court encouraged the use of merger simulation instead of reliance on unreliable market share data. If we view market delineation as a means to the end of predicting merger effects, and we have better information about the end, why bother with the means?