Antitrust Byte

Recent enforcement failures highlight inherent difficulties with prospective antitrust review of vertical transactions. The lack of vertical enforcement guidelines, limited economic modeling, and substantiated efficiencies coalesce to hinder prospective enforcement efforts.

On April 12, 2019, in prepared remarks during the Hearings on Competition and Consumer Protection in the 21st Century, Federal Trade Commission (“FTC”) Commissioner Rebecca Slaughter advocated for the use of retrospective reviews of vertical transactions as a means to overcome the inherent difficulties with vertical enforcement.  Among other things, Commissioner Slaughter argued that:

To the extent that retrospectives can help us improve our predictive tools and analysis or correct prior decisions, we need to do more of them.  And given the increased complexity of analyzing vertical integration, I believe we should focus our resources on reviewing our enforcement decisions regarding vertical mergers.

Furthermore, if we make clear at the time a vertical transaction is cleared that it will be the subject of a future retrospective review, that may have the benefit of a disciplining effect on the merged firm.  This may be unsatisfying from the academic perspective of looking for robust data, but I would be willing to assume that cost for the benefit of protecting competition.

The history of retrospective enforcement in the health care industry—and, in particular, prior successful retrospective challenges to certain hospital transactions—makes it all the more likely that Commissioner Slaughter’s views on the enforcement benefits of retrospective reviews will be adopted by the FTC.

* * *

For additional information about the issues discussed above, or if you have any other antitrust concerns, please contact the Epstein Becker Green attorney who regularly handles your legal matters, or one of the authors of this Antitrust Byte:

E. John Steren
Member of the Firm
esteren@ebglaw.com

Patricia Wagner
General Counsel / Chief Privacy Officer
pwagner@ebglaw.com

Services

Jump to Page

Privacy Preference Center

When you visit any website, it may store or retrieve information on your browser, mostly in the form of cookies. This information might be about you, your preferences or your device and is mostly used to make the site work as you expect it to. The information does not usually directly identify you, but it can give you a more personalized web experience. Because we respect your right to privacy, you can choose not to allow some types of cookies. Click on the different category headings to find out more and change our default settings. However, blocking some types of cookies may impact your experience of the site and the services we are able to offer.

Strictly Necessary Cookies

These cookies are necessary for the website to function and cannot be switched off in our systems. They are usually only set in response to actions made by you which amount to a request for services, such as setting your privacy preferences, logging in or filling in forms. You can set your browser to block or alert you about these cookies, but some parts of the site will not then work. These cookies do not store any personally identifiable information.

Performance Cookies

These cookies allow us to count visits and traffic sources so we can measure and improve the performance of our site. They help us to know which pages are the most and least popular and see how visitors move around the site. All information these cookies collect is aggregated and therefore anonymous. If you do not allow these cookies we will not know when you have visited our site, and will not be able to monitor its performance.