Should conditions regarding non-discrimination be imposed in vertical mergers? The Surface Transportation Board on the acquisition of the Kansas City Southern Railway by the Canadian Pacific

Russell Pittman

MPRA Paper from University Library of Munich, Germany

Abstract: In its 2023 decision approving the acquisition of the Kansas City Southern Railway by the Canadian Pacific, the U.S. Surface Transportation Board conditioned its approval on the merged railway’s commitment “to keep gateways open on commercially reasonable terms” – that is, to allow shippers and non-merging railroads to continue to enjoy the option of using joint-line service, despite the merger’s creation of the alternative of single-line service on the merged railroad. A century has passed since the Board’s predecessor agency, the Interstate Commerce Commission, first imposed a condition of the maintenance of open gateways as a condition for approving a rail merger. This paper asks three questions. First, exactly what, in practice, are open gateways? Second, how have the two regulatory agencies dealt with the inherent tension between maintaining open gateways and achieving merger efficiencies? Third, what is the current state of play?

Keywords: freight railways; regulation; vertical mergers; nondiscrimination conditions (search for similar items in EconPapers)
JEL-codes: K23 L51 L92 R48 (search for similar items in EconPapers)
Date: 2024-12-01
New Economics Papers: this item is included in nep-com, nep-reg and nep-tre
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Forthcoming in Journal of Transportation Law, Logistics and Policy 2.91(2024): pp. 21-59

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