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The New Vertical Merger Guidelines: Muddying the Waters

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  • Michael A. Salinger

    (Boston University)

Abstract

The new U.S. Department of Justice and Federal Trade Commission Vertical Merger Guidelines focus on how vertical mergers are likely to affect static pricing incentives. While vertical mergers can create incentives to increase prices, they can also provide incentives to decrease prices. Which of the possible outcomes is likely to occur depends on details that are generally difficult to measure. Potential competition between dominant firms, the theory of potential harm to competition that the 1984 Department of Justice Merger Guidelines stressed, remains a more compelling rationale for blocking vertical mergers than the likely effect on static pricing incentives.

Suggested Citation

  • Michael A. Salinger, 2021. "The New Vertical Merger Guidelines: Muddying the Waters," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 59(2), pages 161-176, September.
    • Handle: RePEc:kap:revind:v:59:y:2021:i:2:d:10.1007_s11151-021-09824-z
    DOI: 10.1007/s11151-021-09824-z
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    2. Roger D. Blair, 2021. "The 2020 Vertical Merger Guidelines," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 59(2), pages 133-138, September.

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