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Illumina-GRAIL in Retrospect

Author

Listed:
  • Roger D. Blair

    (University of Florida)

  • Christine Piette Durrance

    (University of Wisconsin-Madison)

Abstract

In 2023, the Antitrust Agencies released updated Merger Guidelines. These Guidelines outline policies and procedures in enforcing § 7 of the Clayton Act as it relates to horizontal, vertical, and complementary mergers. In this paper, we consider the application of these guidelines to a recently challenged vertical merger: the Illumina-GRAIL merger. The FTC found the merger to be anticompetitive; and on appeal, the Fifth Circuit Court of Appeals largely agreed. While we show that the positions taken by the FTC are consistent with the Guidelines, we provide an economic analysis that reveals that these positions and the subsequent judicial decision are inconsistent with economic theory, fail to protect competition, and fail to promote consumer welfare. Consequently, the Merger Guidelines may deter procompetitive mergers and lead the Agencies astray in their enforcement efforts.

Suggested Citation

  • Roger D. Blair & Christine Piette Durrance, 2024. "Illumina-GRAIL in Retrospect," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 65(1), pages 347-360, August.
    • Handle: RePEc:kap:revind:v:65:y:2024:i:1:d:10.1007_s11151-024-09960-2
    DOI: 10.1007/s11151-024-09960-2
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    References listed on IDEAS

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    1. Marissa Beck & Fiona Scott Morton, 2021. "Evaluating the Evidence on Vertical Mergers," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 59(2), pages 273-302, September.
    2. Tirza J. Angerhofer & Roger D. Blair, 2021. "Successive Monopoly, Bilateral Monopoly and Vertical Mergers," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 59(2), pages 343-361, September.
    3. Chen, Yongmin, 2001. "On Vertical Mergers and Their Competitive Effects," RAND Journal of Economics, The RAND Corporation, vol. 32(4), pages 667-685, Winter.
    4. Louis Kaplow, 2024. "The 2023 Merger Guidelines and Market Definition: Doubling Down or Folding?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 65(1), pages 7-37, August.
    5. Jack Hirshleifer, 1956. "On the Economics of Transfer Pricing," The Journal of Business, University of Chicago Press, vol. 29, pages 172-172.
    6. Joseph J. Spengler, 1950. "Vertical Integration and Antitrust Policy," Journal of Political Economy, University of Chicago Press, vol. 58(4), pages 347-347.
    7. Richard J. Gilbert & A. Douglas Melamed, 2024. "Potential Competition and the 2023 Merger Guidelines," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 65(1), pages 269-302, August.
    8. Steven C. Salop, 2024. "The 2023 Merger Guidelines: A Post-Chicago and Neo-Brandeisian Integration," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 65(1), pages 79-128, August.
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    Cited by:

    1. Roger D. Blair, 2024. "Introduction: Observations on the 2023 Merger Guidelines," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 65(1), pages 1-6, August.

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