Amidst regular progressive predictions that one merger or another would end competition as we know it, a new study examines both the prognostications and the aftermath of numerous large mergers.
In the study, Doomsday Mergers: A Retrospective Study of False Alarms, the International Center for Law & Economics examined the rhetoric and empirical reality surrounding a half dozen large mergers, including several involving tech companies. The study found that these mergers were usually benign, sometimes ambiguous, but never truly harmful to competition or consumers. Accordingly, the study undercuts the argument that there is any need to radically alter U.S. policy toward merger review.
Our Take
Allegations that mergers would harm consumers often fall flat. And without demonstrating compelling evidence that mergers are likely to substantially harm competition there’s little need for antitrust alarmism. Much less a need to alter enforcement of merger law. Existing U.S. merger policy reviews mergers for genuine competitive concerns based on a range of evidence, including market share but also taking into account ease of entry, substitution effects, and the possibility of efficiency gains.
WY We Care
U.S. merger policy should continue to focus on economic evidence of potential harm to consumers, rather than political rhetoric or arbitrary concerns about “big is bad.” Many mergers result in decreased prices and increased product availability for the average consumer.
Story by US Chamber
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