Do Court Decisions Drive the Federal Trade Commission’s Enforcement Policy on Merger Settlements? |
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Authors: | Malcolm B Coate Shawn W Ulrick |
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Institution: | (1) Federal Trade Commission, 600 Pennsylvania Ave., NW, Washington, DC 20580, USA |
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Abstract: | Mergers are generally conglomerate in nature with only minor (if any) horizontal overlaps. Under U.S. law, an enforcement
agency may challenge any anticompetitive aspect of the merger and the consequent delay associated with litigation would impose
costs on the firm. These costs may give the enforcement agency “leverage” to extract a settlement even when the firm would
prevail in court. This paper explores whether the FTC’s decisions to challenge transactions approximate the case law. We find
that the representative enforcement regimes of the FTC and the courts are remarkably similar, although the FTC credits efficiencies,
while courts consider buyer sophistication as a mitigating factor. |
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Keywords: | Federal Trade Commission Merger enforcement Merger litigation Merger policy Merger settlements |
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