This Antitrust Chronicle article discusses methodologies for reviewing coordinated effects.
Coordinated effects have come to play a smaller role in merger enforcement over time. Antitrust agencies now tend to focus on unilateral effects allegations, with coordinated effects playing at most a supporting role. This could be due to the popularization of merger simulation and other methodologies to estimate unilateral effects and, until recently, the lack of similar quantitative tools for coordinated effects.
Coauthors Nathan Miller of Georgetown University and Jamie Daubenspeck, Kate Maxwell Koegel, and Joseph Podwol of Cornerstone Research discuss two main points in this article. First, economic theory does not always justify the bundling of coordinated and unilateral effects allegations; in some cases, market or merger characteristics may cut against one theory of harm while supporting the other. Second, by leveraging new methodologies for simulating mergers with coordinated effects, agencies and antitrust practitioners can now evaluate certain classes of mergers where coordinated effects are present using the same quantitative rigor that is commonplace for unilateral effects analyses. The authors discuss the conceptual framework behind these new methodologies, the settings where these coordinated effects merger simulations are expected to work well, and the types of evidence needed to support them.
This article was published in Competition Policy International’s Antitrust Chronicle in July 2023.