Horizontal Merger Guidelines Review Project
While the Merger Guidelines are fundamentally sound, there are changes that might be made to clarify Agency practices and to improve merger analysis. My written comments focus largely on issues related to market definition and the measurement and interpretation of market shares. Market Definition Conclusions • The Guidelines should clarify what the Agencies do when pre-merger market power has led "prevailing" prices to be above the competitive level. • The Guidelines should provide an economically-based definition of a "submarket" and how "submarkets" will be analyzed (if at all) by the Agencies. • The Guidelines should clarify the circumstances under which a relevant market may be defined as a portion of a continuous chain of substitutes, even when no readily apparent gap exists. • The Guidelines approach to geographic market definition should be clarified so that it is clear that a relevant geographic market is designed to include the suppliers that can serve the locations of particular customers. • The Guidelines should recognize more explicitly that foreign production is often a very real competitive force that disciplines U.S. prices. Measurement and Interpretation of Market Shares Conclusions • The Agencies should provide additional commentary describing the factors that they consider when determining how to measure market shares. • While both the Guidelines and Commentary provide some description of how market shares are interpreted, this discussion should be expanded. • The Guidelines should clarify how the market share and/or concentration thresholds that define "safeharbors" differ for coordinated effects and unilateral effects cases. • The Agencies should expand the commentary they provide on the "factors affecting the significance of market shares and concentration," especially the discussion of how market shares are measured and interpreted in dynamic markets.