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Vertical merger analysis in the United States, Europe and Australia

Paul McLachlan
(2015) 23(1) Australian Journal of Competition and Consumer Law 17

 

Abstract/summary

Vertical mergers do not involve the combination of two competitors and an increase in market share. Economic theory has long debated whether vertical mergers cause any competition concerns and, if so, why. From the Chicago School positing that vertical mergers are pro-competitive, to post-Chicago theories of foreclosure and raising rivals’ costs, regulators and courts have grappled with how to analyse the competitive impact of a vertical merger. This article provides a history of the economic theories of harm for vertical mergers, compares the approach to vertical mergers of courts and regulators in the United States, Europe and Australia, and suggests that the Australian Competition and Consumer Commission’s Merger Guidelines should more explicitly treat vertical mergers with a lighter touch.

 

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