The New Vertical Merger Guidelines: Muddying the Waters

Michael Salinger

Review of Industrial Organization, 2021, vol. 59, issue 2, No 3, 176 pages

Abstract: Abstract The new U.S. Department of Justice and Federal Trade Commission Vertical Merger Guidelines focus on how vertical mergers are likely to affect static pricing incentives. While vertical mergers can create incentives to increase prices, they can also provide incentives to decrease prices. Which of the possible outcomes is likely to occur depends on details that are generally difficult to measure. Potential competition between dominant firms, the theory of potential harm to competition that the 1984 Department of Justice Merger Guidelines stressed, remains a more compelling rationale for blocking vertical mergers than the likely effect on static pricing incentives.

Keywords: Vertical mergers; Vertical integration; Mergers; Antitrust; Double marginalization; Raising rivals’ costs (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (3)

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DOI: 10.1007/s11151-021-09824-z

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