When companies say a merger will result in lower prices, try laughing in their face

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The next time a big company, and especially a telecom company, tells lawmakers and regulators that a multibillion-dollar merger will result in lower prices for consumers, I hope everyone in the room breaks out in laughter. At this point, it’s patently obvious that such pledges of price reductions are almost always hogwash. Prices rarely if ever go down after a big merger. And if they do, as has happened in the airline industry, they go up again before too long.  Daniel Rubinfeld, a law professor at New York University and a former deputy assistant attorney general for antitrust in the US Department of Justice said consumer benefits are often “grossly overstated” when companies make their case for why a merger should go through. But authorities seldom challenge many of these claims, particularly the ubiquitous assurances of lower prices, despite decades of evidence that such promises hardly ever come to fruition.


When companies say a merger will result in lower prices, try laughing in their face