The American Antitrust Institute (AAI) filed comments on the Draft Vertical Merger Guidelines with the U.S. Department of Justice and Federal Trade Commission. AAI’s comments note that updated guidance on how the agencies approach the review of vertical mergers is long overdue. By combining economic resources in markets for complementary products or services, vertical mergers can enhance the merged firm’s incentive to exercise market power, thus impairing competition at multiple levels and harming consumers, workers and businesses. At the same time, the agencies’ accumulating experience with vertical enforcement, outstanding controversy over major theoretical and empirical issues, and growing evidence from consummated mergers demonstrate the need for extreme care in crafting vertical merger guidelines.
AAI’s comments on the Draft Guidelines fall into three major areas. The first concerns the important broader goals that should motivate vertical merger guidelines. The second addresses parts of the Draft Guidelines that create uncertainty and confusion, thus limiting their usefulness. The third focuses on issues that are either omitted from or given undue emphasis in the Draft Guidelines. AAI concludes that the Draft Guidelines should not be adopted without significantly more support, improvement, and revision.
