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Baker, Jonathan B. --- "Market Concentration in the Antitrust Analysis of Horizontal Mergers" [2010] ELECD 278; in Hylton, N. Keith (ed), "Antitrust Law and Economics" (Edward Elgar Publishing, 2010)

Book Title: Antitrust Law and Economics

Editor(s): Hylton, N. Keith

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781847207319

Section: Chapter 10

Section Title: Market Concentration in the Antitrust Analysis of Horizontal Mergers

Author(s): Baker, Jonathan B.

Number of pages: 27

Extract:

10 Market concentration in the antitrust
analysis of horizontal mergers
Jonathan B. Baker*


I Introduction
This chapter examines the role of market concentration in the analysis of
horizontal merger under the antitrust laws.1 Concentration is a natural
aspect of horizontal merger analysis because mergers among rivals, by their
nature, reduce the number of firms participating in a market, make some
firms larger than before and increase concentration within the market.
The role of concentration in merger review under the antitrust laws has
changed markedly over time. During the 1960s, measures of post-merger
market concentration and its increase from merger were viewed as suffi-
cient statistics for determining whether the transaction was likely to harm
competition. Over the succeeding decades, however, antitrust enforcers
and courts have increasingly come to undertake a more wide-ranging eco-
nomic analysis of proposed mergers. Still, the contemporary legal frame-
work for analyzing horizontal mergers assigns a leading role to market
concentration, basing a presumption of harm to competition from merger
on high and increasing concentration.
This chapter evaluates the extent to which modern economic analysis
supports a role for concentration in the antitrust review of horizontal
mergers. It examines market definition, the predicate for measuring market
shares and market concentration, and the role of market shares and con-
centration in the analysis of the coordinated and unilateral competitive
effects of merger.2 The central issue is when and how market shares, and
market concentration statistics derived from them, form an appropriate
basis for ...