Antitrust and Unfair Competition Law

Competition Beyond Rivalry: Adapting Antitrust Merger Review To Address Market Realties

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COMPETITION: SPRING 2023, VOL 33, NO. 1

By Ausra O. Deluard1

We face a disconnect between how many businesses are operated today and how we as lawyers and economists evaluate them to predict a proposed transaction’s probable impact on competition. The tools on which we have relied for merger review need to be reassessed as competition today in many industries has evolved to place more emphasis on innovative unique value creation over price rivalry. While it’s human nature to crave easy-to-understand rules or set of presumptions, this makes us vulnerable to oversimplified fallacies that ignore the richness and multidimensionality of competition. At first glance, “big is bad” seems to be an obvious antitrust conclusion and a great soundbite, especially in a political environment with growing antagonism towards big business across both sides of the aisle. But if we delve deeper, we begin to realize that there are other factors that should be considered and basing antitrust enforcement decisions on unsupported presumptions drawn from market concentration is a dangerous oversimplification.

This article begins with a brief overview of the history of antitrust merger policy and a discussion of the merger review reform currently underway. The last section presents an examination of the current approaches to merger review and additional factors that we may consider for an enhanced assessment of whether a transaction would substantially lessen competition in today’s economy.

I. A HISTORY LESSON IN ANTITRUST MERGER POLICY

Section 7 of the Clayton Act, one of the two primary sources of federal antitrust law, prohibits acquisitions that may substantially lessen competition or tend to create a monopoly.2 The analysis of what constitutes a “substantial lessening” of competition has shifted over time. Politics and market realities have shaped how we gauge this “substantial lessening.” Before the 1970s, antitrust merger law was applied to prevent increased market concentration in its incipiency, accepting a strong presumption of harm from market concentration

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levels that would be considered low by today’s standards—as low as five percent market share!3These views were supported by the political climate that sought to protect small businesses and was weary of any business enterprise gaining too much economic, or relatedly, political, power.4Efficiency considerations were subordinated in favor of attaining a more decentralized commercial environment.5 At that time, antitrust enforcement also sought to prevent tacit collusion based on the view that collusion was inevitable in concentrated markets.

By the later part of the 1970s, a series of Supreme Court decisions gave room to chip away at the structural presumption of illegality based on market concentration and began to embrace the importance of efficiency considerations.6 While the Supreme Court has not issued a substantive antitrust merger decision since 1975, lower court decisions have embraced a more efficiency-oriented perspective that acknowledges that an examination of market shares is far from the only relevant inquiry in a Section 7 case.7 The “Chicago School” approach took hold, which centered on the concept that markets left alone would lead to productive and allocative efficiency as firms act to maximize profits and that these efficient markets produce maximum consumer welfare. The Chicago School approach challenged the assumption that concentration is an indicator of competitive intensity, highlighting that trends toward concentration may reflect more efficient and desirable market structures. These viewpoints gained prominence as U.S. politics grew more conservative and weary of big government. President Reagan appointed a series of Chicago School-oriented academics to the federal bench, including Robert Bork (1987), Frank Easterbrook (1984), and Richard Posner (1981), who powerfully shaped modern antitrust law. The economic-centric perspectives have prevailed in antitrust enforcement through the past few decades as competition in the U.S. economy was evaluated during the rise of globalization and the digital age. However, a “Post-Chicago” school of thought has emerged-“New Brandeis”-concerned with the rise of concentration in American markets and questioning key assumptions of its conservative predecessor, such as the self-correcting nature of markets and efficiency gains. Today, Neo-Brandeisians lead the federal antitrust agencies.

II. U.S. ANTITRUST MERGER POLICY AT A CROSSROADS

Antitrust merger policy has been heavily influenced by the Federal Trade Commission and the U.S. Department of Justice’s (collectively, the “Agencies”) merger guidelines. The first merger guidelines were issued in 1968 to provide transparency into the standards applied by the Department of Justice in reviewing mergers. The 1982 and 1984 merger guidelines reflected a significant shift from the structuralist presumption to a Chicago School view focused on market power. The 2010 guidelines reflected a further departure from concentration metrics and market definition, although these continue to play a prominent role in merger investigations and particularly merger litigations.8

While the merger guidelines do not constrain the courts, they do set forth how the Agencies systematically analyze mergers. As many mergers are not litigated, and even when they are, they first undergo a burdensome and costly agency investigation, Agency merger practice largely informs the level of antitrust risk merging parties should anticipate.

Today, the future direction of U.S. antitrust policy is at a crossroads. In September 2021, the Federal Trade Commission (FTC) withdrew the 2020 Vertical Merger Guidelines.9 On January 18, 2022, the Agencies launched a joint public inquiry seeking commentary on how to revise the merger guidelines “to strengthen enforcement against illegal mergers” as those mergers can “inflict a host of harms, from higher prices and lower wages to diminished opportunity, reduced innovation, and less resiliency.”10 The Agencies are examining how to address threats to potential and nascent competition, how to better account for non-price competition, how to address buyer power, zero-price products, multi-sided markets, and data aggregation,

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in addition to overarching questions about the use of market definition and presumptions based on market concentration.11

As before, the policy will be shaped by the current prevailing economic and political viewpoints—and at this time, mainstream political sentiment on both sides of the aisle is trending towards an anti-business perspective. There is a pervasive distrust of corporations and, as the Agencies’ Jan. 18 statement regarding the Merger Guideline revisions reflects, a heightened focus on the interests of individuals as “consumers, workers, entrepreneurs, and small businesses.”12 This could manifest in merger policy embracing a return to the precedent of the 1960s, moving away from a focus on the “consumer welfare” standard and favoring fragmentation over efficiency.

Given current sentiment and concerns with concentration, business combinations between competitors and parties in horizontal and vertical relationships are viewed by the Biden Administration with increased suspicion. Today, the Agencies are more concerned with under enforcement than over-enforcement, making a bright line rule approach more attractive. The revised merger guidelines under the Biden Administration will likely introduce a set of more stringent presumptions of illegality based on concentration levels and perhaps other metrics with less opportunity for the merging parties to rebut such presumptions.13 This would shift merger analysis before the Agencies from an examination of the “totality of circumstances”14that requires an extensive case-by-case inquiry to a more rule-based approach that streamlines Agency merger enforcement. This may significantly curtail merger activity, which is likely an intended effect. While rule-based enforcement can provide more clarity, it will likely lead to more merger litigation as parties will turn to the courts to determine the bounds of what constitutes a probable substantial lessening of competition.15

III. MERGING LEGAL POLICY WITH BUSINESS REALTIES

Rule-based approaches inherently lead to enforcement error as they fail to capture the ever-changing complexity of market realities. If the intention of the merger guideline revisions is to “accurately reflect modern market realities,”16 then we should analyze transactions with an evolved perspective that more closely resembles how business managers themselves view competition.

Today, mergers that may raise competitive concerns undergo extensive scrutiny. Merging parties are compelled to produce hundreds of thousands, if not millions, of documents and data to the FTC and DOJ. Yet despite the incredible amount of information produced, the Agencies’ analysis often defaults to defining a narrow relevant product market and calculating market share and concentration, using produced documents to buttress their conclusion regarding the scope of the relevant market and its participants.17 Data may be used to define the scope of the narrow product market by showing that buyers are not likely to choose a different type of product in the face of a 5 to 10 percent price increase.18 Within that very specific product market, they may show that entry is unlikely to counteract the increase in concentration and presumed anticompetitive effects.19 Generally, if there are four or fewer firms in that relevant market pre-transaction, then the transaction is presumed to be anticompetitive.

This process and analysis regularly mystifies executives of the merging parties because it is so disconnected with how they actually compete to maximize their profits, disregarding their actual corporate strategy and industry dynamics reflected in the compulsory document productions. Their strategy and competitive decisions are based on meeting their customers’ needs, oftentimes through a differentiated value proposition, rather than reacting to what their rivals are doing.

What accounts for this disconnect between how businesses compete and how competition

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is analyzed in antitrust merger reviews? Are we defining “competition” accurately to truly capture market realities? Modern antitrust analysis rests on the tenet that competition is a zero-sum game within a narrowly defined relevant market of equivalent products sold by evenly matched rivals. These rivals in the relevant market apply competitive pressure on each other that spurs lower pricing, innovation, better service or higher quality.

Michael Porter, a professor at Harvard Business School and the “most cited scholar today in economics and business,”20 proposes that “creating value, not beating rivals, is at the heart of competition.”21 If “competition focuses more on meeting customer needs than on demolishing rivals,”22 then limiting an antitrust analysis of competition to counting rivals in a narrowly defined product market misses the picture. This zero-sum game view—which fits everything into a neat box—may be convenient, but it ignores the richness and multidimensionality of competition. As Porter explains, our desire to solve everything mathematically (such as a simple rule based on market concentration) reduces competition to an abstraction too far removed from reality to be useful in all situations.23

A. EXAMINING SIMPLIFIED APPROACHES

The Agencies will often calculate the Herfindahl-Hirschman Index (“HHI”) of market concentration to identify whether a market is “highly concentrated.”24HHI is calculated by summing the squares of the individual firms’ market shares.25 A nice, neat mathematical formula that even lawyers can calculate. Transactions in highly concentrated markets that would result in an increase of HHI of more than 200 points for the post-merger entity are presumed to be likely to enhance market power and hence anticompetitive.26

“Big equals bad” right? But what is the basis for the key presumption that market concentration leads to anticompetitive effects? It is not supported by economic theory—market structure and competitive effects are not systematically correlated.27 And high margins are not indicative of curtailed competition. Rather, high margins may reflect an industry where participants offer a unique valuation proposition to meet customer needs rather than commoditized price competition. High margins may also reflect superior efficiency, including lower cost of supply or selling costs.28

The Agencies’ reliance on market shares and concentration ignores these other explanations for the market dynamics. Take for example the statement in Section 5.3 of the 2010 Horizontal Merger Guidelines, where the Agencies explain that they give more weight to market concentration when market shares have been stable over time, especially in the face of historical changes in relative prices or costs. But, if a firm can retain its market share even after its price has increased relative to those of its rivals, this could be because the firm offers buyers a unique value proposition which drives the pricing it can command and rivalry has little impact on its pricing decision. Thus, the elimination of that rivalry would not “substantially lessen competition.”

Which begs the question of how such market concentration is even calculated. Many merging parties do not track the amount of unit sales lost to their closest rivals—let alone determine their pricing based on such data—yet this is a fundamental tenet of how we define a relevant market. The Agencies limit the “relevant market” to the narrowest set of products or services for which a price increase of five to ten percent could be sustained without sufficient loss of sales to products or services outside of the group that would defeat the profitability of such price increase. The 2010 Horizontal Merger Guidelines admit that “defining a market to include some substitutes and exclude others is inevitably a simplification that cannot capture the full variation in the extent to which different products compete against each other.”29And from this relevant market, we measure market shares and calculate market concentration to determine whether the transaction is presumed to enhance market power.

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How do we measure competition when industry participants are not competing against each other to offer the best price in a zero-sum rivalry, but rather are independently forging their path to deliver attractive value to the buyer? They are competing against a much broader range of alternatives for a share of a buyer’s wallet than what is informed by limiting the competitive set to what buyers would do in the face of a five percent price increase. This is even more skewed in industries with higher margins as fewer lost sales to rivals are required to justify a narrowly defined market. And once that relevant market is defined, competitive factors outside of that relevant market are rendered nearly meaningless in the antitrust analysis. Even where countless strategic planning documents of merging parties paint a very different picture about competition.

B. IDENTIFYING RIVALRY

A model-based approach focused on anticipated pricing effects may be most useful where firms do engage in intense price rivalry with no differences in their offerings and customers have nothing but price as the basis for their choices. Thus, one step of the merger analysis should be to evaluate whether the firms are competing in a zero-sum model of rivalry within a close set of substitutes or if they are competing broadly to create unique value and earn a share of the buyers’ wallet. This can be informed by industry dynamics, including profitability. It is more likely that competition is defined by rivalry if products are commoditized with no differentiation, buyers have low switching costs, and industry profitability is low and declining.30

While antitrust political crusaders may point to industry profits as a sign of lax antitrust enforcement and a roadmap to where antitrust efforts should focus, they may be locked in on the wrong target. Consolidation in industries characterized by intense price rivalry, which has led to low margins, could be the most likely to “substantially lessen competition” rather than consolidation in industries with high profit margins gained through superior business acumen of delivering unique value to buyers or efficiently managing costs. According to Porter, “it is where rivalry is the most intense that companies compete away the value they create, passing it on to buyers in lower prices or dissipating it in higher costs of competing.”31

Porter identifies a number of characteristics that could indicate competition occurs as a rivalry to be the best, often competing on price when (1) it is hard to distinguish one rival’s offerings from another and buyers have low switching costs, (2) rivals have high fixed costs and low marginal costs, creating pressure to drop prices because any new customer will contribute to covering overhead, (3) capacity must be added in large increments, disrupting the industry’s supply-demand balance and leading to price cutting to fill capacity, and (4) the product is perishable in that it loses its value quickly if unsold (e.g., a hotel room, airline seat or restaurant table).32Porter cautions that the first element is more narrow than we may initially presume – competition for unique value creation rather than rivalry is apparent even in markets that may appear to be fairly homogenous at first glance-for example, airport seats, discount retailing, or fast food.33 Thus, “in business, multiple winners can thrive and co-exist” and “in the vast majority of businesses, there is simply no such thing as ‘the best.'”34

C. FACTORS TO ASSESS COMPETITIVE EFFECTS

Competition in many industries falls on a spectrum between intense rivalry and competing for a unique value proposition. Shortcuts for drawing the line, even model-based approaches, without qualitative assessments would ignore material factors that impact the potential effects of the transaction. Concentration alone does not necessarily correlate to the level of competition-indeed, competition may be most intense in markets with two large competitors. Pricing pressure analyses provide some indication of effects, but they also should not lead to a per se condemnation of transactions. Any transaction that combines two profitable market participants, even if they are highly differentiated distant competitors whose customers have rarely chosen the other, would result in some degree of predicted upward pricing pressure. Yet we

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acknowledge that not every horizontal transaction substantially reduces competition in violation of Section 7 of the Clayton Act. The amount of pricing pressure that may be acceptable may vary by the circumstances of each transaction, including how quickly the market could shift to a disruptive new service or product, making a brightline threshold difficult to set.

As an alternative, several circumstances should receive more consideration in merger analyses of transactions that may raise antitrust concerns. These circumstances including transaction rationale, bargaining power of suppliers and buyers, and threat of substitutes beyond those in a narrow “relevant market”. Evidence of these elements can be gleaned from internal company documents, particularly strategy presentations, and third-party materials, including investor analyst reports. It is already standard practice for the antitrust agencies to demand the production of hundreds of thousands (if not millions) of internal documents in the second-stage of merger investigations, including all documents discussing or reflecting business strategies and competition.35 These qualitative factors would enable a more holistic perspective of whether a particular suspect transaction would substantially reduce competition, be neutral or have the potential to create significant value-enhancing improvements that benefit consumers and increase competition.

1. TRANSACTION RATIONALE

Under the current merger analysis framework, the “good guy” story does not get much airtime. It does not fit into the very narrow box of cognizable and verifiable efficiencies currently evaluated by the 2010 Horizontal Merger Guidelines.36 The procompetitive transaction rationale can be difficult to quantify, especially if the parties envision creating something unique. Yet, innovation, the ability to transform and progress industries for the benefit of customers, and the ability to create enhanced value for customers is what we want to encourage and avoid thwarting through overenforcement.37 The transaction ambitions should not be ignored simply because they are difficult to quantify, especially if internal strategic documents are replete with these goals.

The rationale can illuminate the parties’ intent and whether the merging parties have a legitimate justification for the transaction. The transaction may provide access to capital to sustain innovation or production, access to talent that could spur further growth through complementary expertise, cross-selling opportunities to customer bases, brand recognition, access to assets or data, economies of scale and more. A company may have sunk costs in infrastructure or capacity that needs to be repurposed or it may need better managerial execution. And some companies are simply motivated to buy earnings to meet capital markets’ pressure for growth—but this rationale is not inherently anticompetitive. Indeed, it may enable a company to better compete for talent vis-Ă -vis industry leaders who could lure top talent based on stock-based compensation offers.

“Leveling the playing field” is another defense that is often disparaged because it increases market concentration. Yet the Supreme Court in Brown Shoe noted that Congress “recognized the stimulation to competition that might flow from particular mergers,” citing for example that Section 7 was not intended to impede “a merger between two small companies to enable the combination to compete more effectively with larger corporations dominating the relevant market.”38 Business literature explains that markets have more intense rivalry with competitors of equal sizes.39 Enabling smaller competitors to gain the advantages that the 800-pound gorilla enjoys would create more competitive pressure on the market leader. Behemoth market leaders typically benefit from supply chain leverage, access to top talent, easier access to capital, and preferential downstream treatment (e.g., product placement, distribution channels) that perpetuate competitive disparities.

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2. BARGAINING POWER

“Leveling the playing field” could also apply to vertical relationships. While a transaction may increase concentration, it could improve leverage for the merged party vis-Ă -vis powerful suppliers or buyers. This would result in a shift of the value capture in the industry, that could lead to more efficiency and innovation. It could also enhance competition among the suppliers or buyers if the merged party would be in a better position to support smaller suppliers or buyers, thereby promoting competition in the industry when viewed at a more macro level. The 2010 Horizontal Merger Guidelines do reflect that the Agencies consider the impact on vertical relationships, but the analysis has been limited to whether the transaction would harm suppliers through the merging parties’ enhanced buyer market power or whether powerful buyers could forestall adverse competitive effects from the transaction. Examination of the relative positioning of the players in the supply chain could illuminate whether the transaction serves to pro-competitively balance dynamics or to exacerbate distorted leverage.

3. THREAT OF SUBSTITUTES

Any analysis should continue to consider the market’s ability to correct any distortions in competition through potential entry and the threat of substitutes that could provide buyers more value and desired features, even if those substitutes are outside of the narrow “relevant market.” The analysis should consider what other products or services meet the same basic needs, even if in a different way, and thus, not direct rivals. Our current analyses for market definition, and even pricing pressure, limit considered substitutes to those that would generally cap predicted price increases by five percent based on historical buying practices. An irrebuttable presumption regarding substitutes should not be drawn from the absence of historic switching. Substitutes can come from unexpected places so the analysis should be broadened and consider price-performance trade-offs and shifts in preferences of various consumer demographics. Any analysis of the threat of substitutes should continue to evaluate switching costs and the ability of competitors to invest to reduce switching costs and other barriers. Competitors may increase their marketing expenditure, investments in distribution networks, or technical support to aid customer transitions in the face of a profit opportunity presented by the proposed transaction. Apple’s successful design and marketing campaigns, Tesla’s investment in charging infrastructure, and the rise of streaming digital content have contributed to significant market shifts that would not have been predicted by observing historical purchasing data and market shares. While this more holistic analysis of competition departs from the narrow confinement of current “relevant market” based analyses, it is arguably not at odds with the statutory language of Section 7 of the Clayton Act that prohibits mergers “where in any line of commerce or in any activity affecting commerce in any section of the country, the effect of such acquisition may be substantially to lessen competition or to tend to create a monopoly.”40 As Professor Louis Kaplow points out, “the statutory language is manifestly amenable to another interpretation, namely that the statute was intended to reach all anticompetitive mergers, wherever they may occur and whatever sorts of commerce they may affect”—without the need to limit that effect to a constructed relevant market.41 Indeed, the Supreme Court’s analysis in Brown Shoe of the legislative history of the Section 7 highlights that Congress hoped to make plain that Section 7 applied not only to mergers between actual competitors, but also to vertical and conglomerate mergers whose effect may tend to lessen competition in any line of commerce in any section of the country.42

IV. CONCLUSION

It is unlikely that the Agencies will depart from a structural presumption—it is a convenient fallacy that provides easy litigation victories. The inconvenient truth requires more work for overburdened regulatory agencies that are under pressure to aggressively enforce antitrust agendas especially in today’s political environment. Merger litigations will become more prevalent, potentially

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even leading to the first Supreme Court substantive merger decision in nearly fifty years.

Antitrust law is by its nature highly fact specific as competition is multi-dimensional and complex. To reduce it to simple rules—especially those that lack a solid empirical basis—stifles procompetitive and neutral transactions that lead to growth, innovation and efficiency in the U.S. economy. Merger review under the Hart-Scott-Rodino premerger notification process is a predictive exercise. As the Supreme Court in Brown Shoe explained, “[s]tatutes existed for dealing with clear-cut menaces to competition; no statute was sought for dealing with ephemeral possibilities.”43Yet today, the Agencies seek to condemn mergers based on an unsupported presumption and without proof of anticompetitive effects. Legal error takes a long time to course correct while concerns with underenforcement can be addressed by challenging consummated transactions with evidence of actual anticompetitive effects.


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Notes:

1. Ausra O. Deluard is a partner at Dentons US LLP and the co-chair of Dentons’ U.S. antitrust group. She also teaches as an adjunct professor of antitrust at U.C College of Law, San Francisco. The views expressed are solely her own and do not necessarily represent the view of Dentons US.

2. 15 U.S.C. § 18.

3. Brown Shoe Co. v. United States, 370 U.S. 294 (1962), United States v. Von’s Grocery Co., 384 U.S. 270 (1966); United States v. Pabst Brewing Co., 384 U.S. 546 (1966).

4. Brown Shoe, 370 U.S. at 316.

5. Id. at 344.

6. See United States v. Gen. Dynamics Corp., 415 U.S. 486 (1974); Cont’l T.V., Inc. v. GTE Sylvania, 433 U.S. 36 (1977); Broad. Music, Inc. v. CBS, Inc., 441 U.S. 1 (1979).

7. See e.g., United States v. Baker Hughes, 908 F.2d 981 (D.C. Cir. 1990).

8. U.S. Dep’t of Justice & Fed. Trade Comm’n, Horizontal Merger Guidelines (2010), https://www.justice.gov/atr/horizontal-merger-guidelines-08192010#8.

9. See Press Release, Fed. Trade Comm’n, Federal Trade Commission Withdraws Vertical Merger Guidelines and Commentary (Sept. 15, 2021), https://www.ftc.gov/news-events/news/press-releases/2021/09/federal-trade-commission-withdraws-vertical-merger-guidelines-commentary.

10. Press Release, Fed. Trade Comm’n, Federal Trade Commission and Justice Department Seek to Strengthen Enforcement Against Illegal Mergers (Jan. 18, 2022), https://www.ftc.gov/news-events/news/press-releases/2022/01/federal-trade-commission-justice-department-seek-strengthen-enforcement-against-illegal-mergers.

11. Id. The FTC had already voted to withdraw the 2020 Vertical Merger Guidelines in September 2021.

12. Id.

13. Timothy (Tim) Wu, “hailed as the ‘architect’ of the Biden Administration’s competition and antitrust policies” (https://www.law.columbia.edu/faculty/timothy-wu) advocates a brightline approach that bans mergers where the number of remaining material competitors would be less than four. See Tim Wu, The Curse of Bigness: Antitrust in the New Age (2018).

14. See e.g., Baker Hughes, Inc., 908 F.2d at 984 (“The Supreme Court has adopted a totality-of-the-circumstances approach to the statute, weighing a variety of factors to determine the effects of particular transactions on competition.”).

15. Id. (“Section 7 involves probability, not certainties or possibilities.” (citing Brown Shoe, 370 U.S. at 323)).

16. Press Release, Fed. Trade Comm’n, Federal Trade Commission and Justice Department Seek to Strengthen Enforcement Against Illegal Mergers (Jan. 18, 2022), https://www.ftc.gov/news-events/news/press-releases/2022/01/federal-trade-commission-justice-department-seek-strengthen-enforcement-against-illegal-mergers.

17. U.S. Dep’t of Justice & Fed. Trade Comm’n, Horizontal Merger Guidelines § 5 (2010), https://www.justice.gov/atr/horizontal-merger-guidelines-08192010#8.

18. Id. § 4.

19. Id. § 9.

20. Michael E. Porter, Harv. Bus. Sch., https://www.hbs.edu/faculty/Pages/profile.aspx?facId=6532 (last visited June 28, 2023).

21. Joan Magretta, Understanding Michael Porter: The Essential Guide to Competition and Strategy (2011).

22. Id. at 28.

23. Id.

24. U.S. Dep’t of Justice & Fed. Trade Comm’n, Horizontal Merger Guidelines § 5.3 (2010), https://www.justice.gov/atr/horizontal-merger-guidelines-08192010#8.

25. Id.

26. Id.

27. Douglas H. Ginsburg & Joshua D. Wright, Philadelphia National Bank: Bad Economics, Bad Law, Good Riddance, 80 Antitrust L.J. 201, 204, 208, 209 (2015) (“There is simply no general theoretical relationship between market concentration and price in markets for differentiated products, where it is well understood that market share data are not necessary to evaluate the potential for unilateral price effects.”).

28. See e.g., Harold Demsetz, Two Systems of Belief About Monopoly, in INDUSTRIAL CONCENTRATION: THE NEW LEARNING 164, 166-67 (Harvey J. Goldschmid et al. eds., 1974) (questioning whether the observed correlation between market concentration and profitability were better explained by superior efficiency of the larger firms in the market).

29. U.S. Dep’t of Justice & Fed. Trade Comm’n, Horizontal Merger Guidelines § 4 (2010), https://www.justice.gov/atr/horizontal-merger-guidelines-08192010#8.

30. Porter, supra note 19, at 57.

31. Id. at 56.

32. Id. at 57-58.

33. Id. at 28-29.

34. Id. at 28.

35. The vast majority of transactions (over 90 percent) reported under the Hart-Scott-Rodino Act do not raise concerns. Transactions that may reduce competition are investigated after an initial waiting period through the issuance of a compulsory “Request for Additional Information and Documentary Material,” commonly referred to as a Second Request.

36. See U.S. Dep’t of Justice & Fed. Trade Comm’n, Horizontal Merger Guidelines § 10 (2010), https://www.justice.gov/atr/horizontal-merger-guidelines-08192010#8..

37. See Maureen K. Ohlhausen & Taylor Owings, How the New Anti-Merger Policy May Be the New Antitrust Paradox, CPI Antitrust Chron., Nov. 9, 2022, at 3 n.5, https://www.competitionpolicyinternational.com/wp-content/uploads/2022/11/1-HOW-THE-NEW-ANTI-MERGER-POLICY-MAY-BE-THE-NEW-ANTITRUST-PARADOX-Maureen-K-Ohlhausen-Taylor-Owings.pdf (noting how over-enforcement would remove from the competitive race the companies that often have the best prospects for de-consolidating many markets, including digital markets that are prone to tipping).

38. Brown Shoe, 370 U.S. at 319.

39. Porter, supra note 19, at 57.

40. Section 7 of the Clayton Act, 15 U.S.C § 18.

41. Louis Kaplow, Why (Ever) Define Markets?, 124 Harv. L. Rev. 437 (2010).

42. Brown Shoe, 370 U.S. at 317.

43. Id.

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