The Conundrum of Out-of-Market Effects in Merger Enforcement
Section 7 of the Clayton Act prohibits mergers that harm competition in “in any line” of commerce. And, indeed, the Supreme Court’s decisions in Philadelphia National Bank and Topco are often cited on behalf of the proposition that this means any single cognizable market, and that anticompetitive effects in one market cannot be offset by procompetitive effects in another.
That would appear to simplify antitrust analysis, and it certainly can. But as is so often the case in antitrust, apparent simplicity can be confounding in application. Is it really true that harm in any market, however narrow, is grounds to block a merger, whatever its broader effects? Is that the best reading of legal precedent? Is it required? And is it either practicable or desirable?