Economics and the 1992 Merger Guidelines: A brief survey

Abstract

The 1992 Horizontal Merger Guidelines amplify, extend, and in some respects significantly modify the methodology for merger assessment embodied in the predecessor Guidelines released in 1982 and 1984. Like their predecessors, the 1992 Guidelines recognize that only those mergers (and acquisitions) that have a likely effect of creating, facilitating or enhancing exercise of market power should be challenged by the antitrust enforcement agencies. This focus on market power and its exercise provides the foundation on which the Guidelines are built. Our survey will explicate how these market power concerns link the five analytical steps of merger assessment that comprise the 1992 Guidelines. I For the sake of brevity', we emphasize the issues of market definition and measurement (§1 of the Guidelines); the potential adverse competitive effects of mergers (§2 of the Guidelines); and entry (§3 of the Guidelines). Only passing references will be made to efficiencies 2 and failure (§§4 and 5, respectively).