As the Obama administration ended and the Trump administration began, U.S. antitrust merger enforcement was riding high. Continuing a decade-long government winning streak, federal and state agencies had notched significant courtroom victories, including Anthem/Cigna, Aetna/Humana, Staples/Office Depot, and Hershey/Pinnacle.
Just a few years later, the tide seemed to turn, with government plaintiffs suffering a string of defeats in antitrust merger trials, notably AT&T/Time Warner, Evonik/PeroxyChem, and T-Mobile/Sprint. What changed?
The specific reasons for allowing the above transactions to proceed differed from case to case, as did the underlying factual context. However, at least one common thread emerges: skepticism or outright hostility to the plaintiffs’ economic testimony.
In this article, the authors examine recent high-profile merger trials, and analyze what makes economic testimony compelling within the current legal framework. The manner in which courts assessed the economic consequences in the recent losses—and were left unpersuaded by the government’s economic testimony—offers lessons for the future role of economics in complex merger litigation.