NEW ANTI-MERGER THEORIES: A CRITIQUE

Does recent federal merger regulation make economic sense? Merger activity has clearly increased this decade, both in the numbers of mergers and their market value. Whether antitrust regulators have responded with a proportional increase in enforcement is up for de bate. What is clear, however, is that regulators at the Department of Justice Antitrust Division and the Federal Trade Commission have begun to enforce merger laws in innovative ways. These innovations have developed not in academic literature but within government agencies themselves. “Innovation market ” analysis evaluates a merger between technologically advanced firms based on the effects of the merger on research and development in the relevant market. “Uni lateral effect ” analysis evaluates a merger on the ability of the merged firm to singularly influence price in the relevant market. These in struments—which I explain in detail below—have been employed explicitly and implicitly in dozens of antitrust cases and investigation