The other side of the coin: Complementarity in mergers of multiproduct firms

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In “The Other Side of the Coin: Complementarity in Mergers of Multiproduct Firms,” Craig Minerva, Loren K. Smith, and Peter Herrick cover the antitrust background about complementarity; the application of complementarity to mergers of multiproduct firms; complementarity as a procompetitive effect distinct from efficiency; and complementarity as an inextricably-linked procompetitive effect as opposed to an incognizable out-of-market efficiency. Complementarity is an important economic concept and has significant antitrust implications. Failing to analyze the procompetitive effects of merging complementary products can lead to erroneous enforcement decisions, reducing consumer welfare. Hence, merging parties and investigating agencies properly should consider the role of complementarity in assessing the potential competitive implications of mergers of multiproduct firms.