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Academic Articles Awards > Mergers

Horizontal Mergers, Market Structure, and Burdens of Proof

Herbert J. Hovenkamp and Carl Shapiro, Yale Law Journal, Forthcoming

See Herbert J. Hovenkamp's resume See Carl Shapiro 's resume

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Readers’ vote will close on February 9, 2018. Readers’ vote will allow you to nominate 1 article for each of the Awards, i.e., 10 Academic articles, 10 Business articles, and the best Soft Laws. The readers’ short-list of Academic and Business Articles will be communicated to the Board together with the 20 articles nominated by the Steering Committees. The Board will decide on the award-winning articles. Results will be announced at the Awards ceremony to take place in Washington DC on the eve of the ABA Antitrust Spring Meeting on April 10, 2018.

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"Since the Supreme Court’s landmark 1963 decision in Philadelphia National Bank, antitrust challengers have mounted prima facie cases against horizontal mergers that rested on the level and increase in market concentration caused by the merger, with proponents of the merger then permitted to rebut by providing evidence that the merger will not have the feared anticompetitive effects. Although the way that concentration is measured and the triggering levels have changed over the last half century, the basic approach has remained intact. This longstanding structural presumption, which is well supported by economic theory and evidence, has been critical to effective merger enforcement. We suggest some ways to strengthen it further.

One critical assumption in this burden shifting framework is that the goal of merger policy is to protect consumers against high prices or reduced output, product variety, product quality, or innovation (“consumer welfare”). If the goal is something else, such as deterring industrial concentration to control corporate political power, or protecting small firms from larger competitors, then the structural presumption must be viewed differently. The bulk of this essay examines and defends the role of structural presumptions in the present legal world where protection of consumer welfare is the point of merger enforcement. We also briefly consider a legislative proposal that could be seen as departing from this norm, offering some guidance concerning how this proposal could be improved so as to strengthen merger enforcement, in part by making it easier for the government to establish its prima facie case."

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