Multimarket Contacts

ISSUES IN COMPETITION LAW AND POLICY, ABA Section of Antitrust Law, Vol. 2, p. 1553, 2008

21 Pages Posted: 6 Nov 2008

See all articles by John T. Scott

John T. Scott

Dartmouth College - Department of Economics

Date Written: August 2008

Abstract

Following the passage of the Celler-Kefauver Act in 1950, courts began applying Section 7 of the Clayton Act to conglomerate mergers. In recent years, however, conglomerate merger enforcement has been largely dormant. Yet during the same period when enforcement practices turned their focus away from conglomerate mergers, many economists have developed theory and evidence supporting the hypothesis that multimarket contact among diversified sellers can create market power in the individual markets in which the sellers compete - the multimarket contact hypothesis. The hypothesis has implications for Section 7 enforcement as to both conglomerate and horizontal mergers. This chapter briefly surveys the relevant case law and the enforcement history, reviews the theory and evidence relating to the multimarket contact hypothesis, and develops the implications of the hypothesis for the antitrust policy toward mergers.

Keywords: Antitrust, Mergers, Multimarket contact, Clayton Act Section 7, Conglomerate Mergers, Diversification

JEL Classification: L40, L10, L25

Suggested Citation

Scott, John T., Multimarket Contacts (August 2008). ISSUES IN COMPETITION LAW AND POLICY, ABA Section of Antitrust Law, Vol. 2, p. 1553, 2008, Available at SSRN: https://ssrn.com/abstract=1295487

John T. Scott (Contact Author)

Dartmouth College - Department of Economics ( email )

Hanover, NH 03755
United States

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