Dan Gilman, Geoff Manne, & Brian Albrecht on Out-of-Market Effects

A Truth on the Market piece by ICLE Senior Scholar Daniel J. Gilman, President Geoffrey A. Manne, and Chief Economist Brian Albrecht was cited by the Information Technology & Innovation Foundation in a blog post about labor monopsony effects in merger enforcement. You can read the full piece here.

Finally, there is another problem with the Guidelines’ turn to labor: Benefits to labor can coincide with harms to consumers, creating challenges in merger reviews. Indeed, Gilman et al. highlight this conflict when they ask, “Are mergers to be challenged—and, if challenged, blocked—if they harm workers in a single labor market, even if they are procompetitive (and pro-consumer) in the relevant product market?” In other words, will the agencies be able to conduct effective merger reviews when a merger raises labor market concentration—which may or may not hurt workers—but reduces prices for consumers? Moreover, even if a merger does not result in a conflict between worker and consumer interests, it could result in conflicts between two labor markets that can further hinder effective merger review. Gilman et al. also highlight this when they assert that merger benefits in one labor market could offset the losses in another, resulting in net gains for the overall labor market. In this case, the agencies will also face another challenge in effectively conducting merger reviews when they have to balance gains and losses between labor markets.