Revising the Horizontal Merger Guidelines: Lessons from the US and the EU
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Description
The US Horizontal Merger Guidelines first promulgated in 1982 by the Antitrust Division of the Department of Justice and the Federal Trade Commission have proven to be very useful throughout the past two and half decades, and through several revisions. The use of merger guidelines in the European Union has been more recent – the origins go back to the issuance of the Guidelines in 1997, with revisions that were under discussion in 2002 when the European Commission published a draft Guidelines notice (the final notice of revision was published in 2004). In both the US and the EU the Guidelines have proven valuable to the parties involved in the merger process (and their experts) and to businesses that are contemplating potential mergers or acquisitions. The modes of analysis and the applications of the Guidelines in both the US and the EU have evolved over time and there has been substantial convergence. As a result, the Guidelines provide useful models for countries that are developing merger control procedures. Recently, the US Department of Justice and Federal Trade Commission have embarked on an effort to revise and update the US Horizontal Merger Guidelines. We believe that this is an auspicious time for suitable revisions to be made in the US and a valuable opportunity for other merger control authorities to evaluate their own merger guidelines. Moreover, we see substantial benefits to be achieved if there is convergence in the merger control processes of all competition authorities worldwide. Our chapter begins with a brief overview of the similarities and differences between the US and EU Guidelines. The fact that there is substantial overlap between the two makes a proposal for US revisions immediately applicable to the EU and elsewhere. In this chapter, we focus on market definition and its relationship to the analysis of competitive effects. Section 11.2 provides a brief overview of important elements of the US and EU guidelines relating to market definition and competitive effects. In Section 11.3, we offer a number of thoughts as to how the market definition component of the US Merger Guidelines might be revised in light of the learning of economists and lawyers in the past two decades. We point out certain limitations in the analysis of market definition and, in light of these limitations, suggest that the US Guidelines and guidelines more generally should emphasize the importance of competitive effects analysis in merger evaluations. In Section 11.4, we move our focus to the analysis of competitive effects for cases in which innovation issues are significant. We suggest that guidelines can be improved if they more accurately reflect our current understanding of the forces that drive innovation.
Source Publication
Competition Policy and Regulation: Recent Developments in China, the US and Europe
Source Editors/Authors
Michael Faure, Xinzhu Zhang
Publication Date
2011
Recommended Citation
Gilbert, Richard and Rubinfeld, Daniel L., "Revising the Horizontal Merger Guidelines: Lessons from the US and the EU" (2011). Faculty Chapters. 1825.
https://gretchen.law.nyu.edu/fac-chapt/1825
