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Greaney, Thomas L. --- "Efficiencies in Merger Analysis: Alchemy in the Age of Empiricism?" [2009] ELECD 201; in Drexl, Josef; Idot, Laurence; Monéger, Joël (eds), "Economic Theory and Competition Law" (Edward Elgar Publishing, 2009)

Book Title: Economic Theory and Competition Law

Editor(s): Drexl, Josef; Idot, Laurence; Monéger, Joël

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781847206312

Section: Chapter 12

Section Title: Efficiencies in Merger Analysis: Alchemy in the Age of Empiricism?

Author(s): Greaney, Thomas L.

Number of pages: 15

Extract:

12. Efficiencies in merger analysis:
alchemy in the age of empiricism?
Thomas L Greaney*

1 INTRODUCTION

One is hard-pressed to find in law an undertaking more fraught with uncer-
tainty than the application of the efficiencies defence in merger analysis.
Generalist fact finders (judges) and politically attuned government officials
(prosecutors and regulators) are charged with two Herculean tasks: (1) pre-
dicting the outcome of organic changes in business enterprises and (2) com-
paring the magnitude of those changes to the equally uncertain amount of
harm to future competition that the transaction will cause. Given the enor-
mous, perhaps intractable, uncertainty of this inquiry, it is therefore para-
doxical that many of the strongest advocates for strengthening the role of
efficiencies analysis in merger reviews are self-described proponents of
bringing a `new empiricism' to antitrust analysis.1
This chapter focuses on the tensions inherent in incorporating an
efficiencies defence (or evaluating efficiencies as part of the appraisal of
mergers) and maintaining the rigour and impartiality promised by propo-
nents of the `empirical' approach. This argument should not be miscon-
strued as a brief for abandoning the efficiencies inquiry altogether. Rather,
it is, first, an appeal for candour (and humility) by those undertaking the
inquiry; and second, it is a brief for constraining discretion by imposing


* Chester A. Myers Professor, Saint Louis University School of Law.
1 For example, former FTC chairman Timothy Muris has contended that

merger law should not rely on presumptions and economic theory alone.
Questioning presumptions ...