VERTICAL MERGERS AND MARKET FORECLOSURE

Abstract

In recent years, antitrust officials have recognized that vertical arrangements can cause competitive harm through two routes: first, they can facilitate collusion among rivals, and second, they can raise rivals’ costs and thereby create barriers to entry or expansion. In this paper, we identify a third and separate pathway: vertical integration allows upstream monopolists to exploit more fully the market power that has already been attained. We explore the implications of this third pathway for antitrust policy.

Citation

Comanor, W.S. and Rey, P. (2004), "VERTICAL MERGERS AND MARKET FORECLOSURE", Kirkwood, J.B. (Ed.) Antitrust Law and Economics (Research in Law and Economics, Vol. 21), Emerald Group Publishing Limited, Leeds, pp. 445-458. https://doi.org/10.1016/S0193-5895(04)21008-9