LAW 642 Lecture Notes - Lecture 42: Monopoly Profit
30 May 2020
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The doj will look at vertical mergers on fear that they will hurt competition by preferring themselves, but they do so reluctantly because efficiencies are likely to be high. Harms: dual entry barriers: vertical mergers can raise barriers to entry if prospective entrants must now enter both markets (buyer-seller) simultaneously, foreclosure effects: foreclose access of competitors to scarce inputs or outputs, avant! Ftc investigation closure opinion articulates this fear: induce collusion. Avant! (ftc closing statement on investigation of merger 2002): Synopsis, a dominant company in the front end compute chip design market, acquires. Avant!, a company with 40% share of back end computer chip design market: product change: fear of foreclosure effects was that synopsis would make it more difficult for competing back end tools to communicate with its own tools. Ftc did not seek preliminary injunction, but maintained investigation to determine whether post-merger remedy would be needed.
