A Global Issue
Chapter 8: Controlling the creation of buyer power through merger policy
A Global Issue
This chapter addresses merger policy where the merger will enhance buyer power. By forbidding such mergers, it is possible to limit the emergence of buyer power. The chapter shows, first, that such mergers create competitive risks analogous to those created by mergers that increase seller power, but it also focuses on the ways in which buyer side effects are distinct because of potential harms from even modest increases in buyer concentration, the greater durability of buyer power (compared to seller power), and the potential that the effects of such mergers will primarily impact upstream markets rather than the one most directly changed by the merger. This analysis leads to a discussion of buyer side merger analysis including market definition, the market share triggers for concern and the defenses that might be considered. The chapter ends with a review of actual enforcement of merger law with respect to buyer issues in the United States, the EU, and elsewhere in the world. The basic conclusion from that review is that buyer side concerns are significantly under-emphasized in contemporary merger enforcement.
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