Horizontal Merger Guidelines Review Project #545095-00004

Submission Number:
Spencer Waller
Loyola University Chicago School of Law
Initiative Name:
Horizontal Merger Guidelines Review Project
Brands and brand management have become a central feature of the modern economy and a staple of business theory and business practice. Businesses rely on branding to avoid 1) commoditization of their products and services, 2) distinguish themselves from their competition, and 3) create loyal customers for whom no other brand will suffice. Consumers in turn rely on brands to 1) guide their purchasing patterns, 2) express their sense of style and individuality, and 3) form important connections with the brand providers and fellow brand consumers. Over the past thirty years, antitrust law has relied heavily on neo-classical price theory to define legal rules that promote efficiency. For many purposes, this is entirely appropriate. But such a focus misses the point (and often assumes away) the role that brands play in avoiding price competition, promoting market segmentation, facilitating price discrimination, and increasing customer loyalty to the point where price theory no longer explains well what brands (if any) consumers view as substitutes. We present for the hearings excerpts from a larger work in progress that seeks to understand the nature of brands and apply the insights to the types of questions that must be considered in revised horizontal merger guidelines. Spencer Weber Waller, Professor and Director, Institute for Consumer Antitrust Studies, Loyola University Chicago School of Law Deven Desai, Visiting Fellow, Center for Information Technology Policy, Princeton University, Associate Professor of Law, Thomas Jefferson School of Law