Comment on the Proposed Update on the Horizontal Merger Guidelines: Accounting for Out-of-Market Efficiencies

Joshua D. Wright
2010 Social Science Research Network  
There is not much debate that the methodological approach adopted by the 2010 Proposed Horizontal Merger Guidelines ("new HMGs") will result in narrower relevant markets. The Agencies believe that narrower markets are more accurate because "the competitive significance of distant substitutes is unlikely to be commensurate with their shares in a broad market." 1 The market definition analysis endorsed by the new HMGs correspondingly favors narrower markets. For example, the hypothetical
more » ... t test adopted by the new HMGs states that the Agencies require critical loss analysis to be consistent with data on profit margins. As others have pointed out, the value of diversion test endorsed by the new HMGs tends toward narrower relevant markets, all else held constant. 2 ♦ These comments are my own and are not submitted on behalf of any client.�
doi:10.2139/ssrn.1656538 fatcat:ean7gweyivezvjbwexx77jzyay