Eliciting Information from Interested Parties in Merger Control

This article investigates how antitrust agencies should structure the disclosing of information about effciency gains from interested parties (merging .rms, and competitors) in merger control. We analyze the particular case of a horizontal merger withdanger of foreclosure, where welfare can decrease either due to insuffcient effciency gains (effciency defense) or due to excessive effciency gains if the competitor exits (effciency offense). The .rst result is that evidence from competitors is not requiredunless the ex-ante market shares of the merging .rms exceed a threshold. Second, we support the role of advocacy of the parties. The burden of proof for the effciency defense should rest on the insiders (merging .rms) whereas the burden of proof forthe effciency o¤ense should rest on outsiders (competitors). Finally, it is optimal to make insiders report .rst and outsiders second and any communication among parties has to be prohibited.