Continuity and Change in the 2010 Merger Guidelines

The 2010 Merger Guidelines define an improved road-map for merger analysis. Evidence is elevated to a position of prominence in Section II of the revised draft, although we note that the presentation lacks the necessary context. Economic theory now plays a larger role in the analysis, a change that facilitates the alignment of the theoretical and empirical reviews, but creates a risk of substantial over-enforcement. Moreover, a number of technical improvements are made in the standard Guidelines' methodology.We recognize that the revisions significantly improve the transparency of merger policy, but we must caution that the theoretical changes could easily be subject to abuse. We observe that the standard price-based methodology that underpins the theoretical models is only able to define a set of special case results, the applicability of which must be proven. Without exogenous evidence to confirm the models' predictions, the new theory offers little insight into the competitive process