Bureaucracy and Politics in FTC Merger Challenges

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract: We estimate the deterrence effects of U.S. merger policy instruments with respect to the composition and frequency of future merger notifications. Data from the Annual Reports by the U.S. DOJ and FTC allow industry based measures over the 1986-1999 period of the conditional probabilities for eliciting investigations, challenges, prohibitions, court-wins and court-losses: deterrence variables akin to the traditional conditional probabilities from the economics of crime literature. We find the challenge-rate to robustly deter future horizontal (both relative and absolute) merger activity; the investigation-rate to slightly deter relativehorizontal merger activity; the court-loss-rate to moderately affect absolute-horizontal merger activity; and the prohibition-rate and court-win-rate to not significantly deter future horizontal mergers. Accordingly, the conditional probability of eliciting an antitrust challenge (i.e., remedies and prohibitions) involves the strongest deterrence effect from amongst the different merger policy instruments. Terms of use: Documents in

Section: Datasetmentioning

confidence: 99%

The Deterrence Effects of U.S. Merger Policy Instruments

Clougherty

Seldeslachts

2009

“…A number of scholars, nevertheless, argue that political pressures play a strong role in determining antitrust policy decisions (e.g., Faith, Leavens & Tollison, 1982;Coate, Higgins & McChesney, 1990). …”

Section: Institutional Autonomymentioning

confidence: 99%

“…For instance, Dutch antitrust officials have openly stated that industrial lobbies and other government institutions impact policy decisions (Cornielje, 2002). While US antitrust agencies are held to be highly autonomous, Coate, Higgins and McChesney (1990) imply that the Federal Trade Commission (FTC) is actually more susceptible to political pressure than the DOJ. Accordingly, three elements of antitrust institutional autonomyjurisdictional, decision, and budgetary-are identified here in order to better specify how institutional autonomy impacts the business-government interface with regard to antitrust policy.…”

Section: Institutional Autonomymentioning

confidence: 99%

Antitrust Holdup Source, Cross-National Institutional Variation, and Corporate Political Strategy Implications for Domestic Mergers in a Global Context

Clougherty

2004

Managers are increasingly uncertain over the source (home-nation or foreignnation) of antitrust holdup for domestic mergers with significant international implications. I propose a conceptual framework that predicts the source of antitrust holdup for domestic mergers. Under idealized institutional assumptions, I find an industry's global competitiveness to be the primary driver behind holdup source: a contention supported by empirical tests based on the merger policies of 27 antitrust jurisdictions over the 1992-2000 period. I also relax the idealized institutional conditions to yield more precise propositions tailored to the cross-national environment for antitrust policy. Finally, I generate prescriptive propositions that yield implications for effective political strategies.

“…Costs mainly included litigation costs initiated by the government. They all used a basic model to assess 6 Thus, the period covers the beginning of the new merger regulation passed in 2004. See, for instance, Lyons (2004) for further details about the procedure.…”

Section: Different Approaches To Assessing An Antitrust Authoritymentioning

confidence: 99%

“…6 In order to explore the database in detail, we first use Kohonen's maps issued from neural networks research. Then, we present main results of three multinomial logit (MNL) models.…”

Section: Introductionmentioning

confidence: 99%

Merger Remedies at the European Commission: A Multinomial Logit Analysis

Bougette

Turolla²

2006

This paper aims to build and empirically evaluate a discrete choice model of merger remedies as a basis for policy analysis. The database consists of 229 merger cases accepted in Phase I or Phase II of the European merger process between 1990 and 2005. We focus on the following question: Which merging firms' characteristics lead the European Commission to decide whether to require conditional acceptance? Although a lot of empirical studies have been carried out these last years, ours is distinguished by at least two original features. First, we explore determinanting factors of the Commission's decisions with a neural network model differentiating cases accepted with or without remedies (either structural or behavioral). Secondly, we implement three multinomial logit models. We find that variables related to high market power lead more frequently to a remedy outcome, whatever the phase. Innovative industries such as energy, transportation and communications positively affect the probability of a behavioral remedy. Lastly, former Competition Commissioner Mario Monti's policy appears to be pro-remedy, i.e. seeking concessions from merging parties.