Invigorating Vertical Merger Enforcement

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Salop, Steven C.
antitrust; mergers; foreclosure
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This Feature summarizes why and how vertical merger enforcement should be invigorated. In our modern market system, vigorous vertical merger enforcement is a necessity. Strong enforcement is particularly important in markets where economies of scale and network effects lead to barriers to entry and durable market power. Even when there are parallel vertical mergers, the result may well be an anticompetitive reciprocal dealing, coordinated equilibrium rather than intense competition among efficient integrated firms. Stronger enforcement would involve several steps, including recognition that claims of elimination of double marginalization do not deserve to be silver bullets and that behavioral remedies are generally unable to prevent anticompetitive effects.