Notes
Outline
Merger policy.
Merger policy.
Merger policy.
Hart-Scott-Rodino Act (1976).
Premerger notification process.
Merger policy.
Merger policy.
Post-merger HHI below 1,000.
Unconcentrated.
Respond with Sherman 1 if explicit collusion.
No challenge to mergers in this region.
 Post-merger HHI between 1,000 and 1,800.
Gray area.
Agencies unlikely to challenge a merger increasing HHI by less than 100 points, but likely to challenge otherwise unless agencies think the merger won't lessen competition.
Post-merger HHI above 1,800.
Highly concentrated.
Challenge if change in HHI > 50, unless agencies think merger won't lessen competition.
Market definition.
Du Pont patents moisture proof  cellophane in 1927.
Du Pont has 75% of cellophane market, but only 20% of the market for “flexible packaging.”
Court: cross-elasticity of demand between products.
But be careful: substitutes at competitive price not monopoly price.
Market definition.
U. S. v. Alcoa (Rome) 377 U. S. 271 (1964).
Alcoa buys another maker of aluminum cable.
Court says aluminum a separate market from copper.
U. S. v. Continental Can Co. 378 U. S. 441 (1964).
Continental acquired a maker of glass jars.
Court ignores cross-elasticity and defines market as metal and glass containers.  What about paper, plastic, etc.?
Gerrymandering markets.
Market definition.
Market definition.
Market definition.
Geographic market.
Same concept and approach.
The baseline problem.
Need to start test from the competitive price, not (necessarily) the observed market price.