Let’s Get Vertical

In the wake of the government’s setback in the AT&T/Time Warner case, it’s natural enough to ask: what will be that case’s impact on the government’s ability to challenge vertical mergers in the future? I think the answer is “very little if anything.” The government could take steps to build an even stronger foundation for the review of vertical mergers in the future. Here are some suggestions. First, the current 1984 guidelines on the treatment of vertical (technically, non-horizontal) transactions should be withdrawn. Second, new vertical guidelines should be created. Here are five  specific topics that I think are worthy of consideration: 1) Should the presence of concentrated markets make a difference? 2) How can we better demonstrate the theoretical and factual basis for identifying when mergers increase bargaining leverage? 3) As a related topic, the Department of Justice and the Federal trade Commission would be well-served by providing greater detail on how to tell whether the control of an input will distort competition. 4) There is more work to be done on so-called coordinated effects. 5) The antitrust agencies have offered guidance on the use of structural and behavioral remedies in a series of speeches, but this guidance could be synthesized and codified.

[Sallet is a Benton Senior Fellow. He works to promote broadband access and deployment, to advance competition, including through antitrust, and to preserve and protect internet openness. He is the former-Federal Communications Commission General Counsel (2013-2016), and Deputy Assistant Attorney General for Litigation, Antitrust Division, US Department of Justice (2016-2017).]