| Author (Person) | Zimmerman, Paul R |
|---|---|
| Publisher | Taylor & Francis |
| Series Title | European Competition Journal |
| Series Details | Volume 7, Number 3, Pages 407-420 |
| Publication Date | September 2011 |
| ISSN | 1744-1056 |
| Content Type | Journal Article |
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Introduction: "In August 2010, the US Federal Trade Commission (FTC) and US Department of Justice issued a revision to their Horizontal Merger Guidelines. One of the more significant and controversial aspects of the 2010 Guidelines was the inclusion of language involving the agencies’ consideration of upward pricing pressure (UPP) as a screening tool for assessing the likely competitive impacts of proposed transactions––specifically, the unilateral price effects of mergers among differentiated firms."
"This paper presents an initial examination into how the UPP test performs relative to traditional concentration screens when diversion ratios are based upon market shares. A “share-based” UPP test provides a middle ground between traditional structural screens (concentration indices) routinely employed by the US and EU competition authorities and the direct consideration of unilateral effects. By preserving the analytical step of defining an antitrust product market and subsuming structural concentration into a UPP test, the screen considered herein contains features that may be attractive to antitrust practitioners.
The paper proceeds as follows. Section B reviews implementation issues concerning UPP-based and traditional structural merger screens and potential limitations of the requisite data in either case. Section C presents a brief formal demonstration of the UPP test as specifically conceptualised by F&S and its formulation to reflect share-based diversion ratios. Section D presents an initial evaluation of the share-based UPP test’s relative performance in screening an actual transaction that did not result in any post-merger price effects. The share-based UPP screen outperforms a traditional concentration-based screen in the sense that the former would not suggest further investigation beyond the initial screening period. Section E provides concluding remarks."
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| Source Link | https://doi.org/10.5235/ecj.v7n3.407 |
| Subject Categories | Internal Markets |
| Subject Tags | Competition Law | Policy, Prices |
| Keywords | Antitrust | Cartels | Dominant Position | Market Abuse, Mergers and Acquisitions, National Competition Authorities |
