Essay from 2000: Three years ago, the Antitrust Division
and the Federal Trade Commission revised their
Horizontal Merger Guidelines to articulate in greater
detail how they would treat claims of efficiencies
associated with horizontal mergers: 1 claims that are
frequently made, as for instance in the recently
proposed merger between Heinz and Beech-Nut in the
market for baby food.2 While these revisions to the
Guidelines have a solid economic basis, they leave open
many questions, both in theory and in practice. In this
essay, the authors evaluate some aspects of the
treatment of efficiencies, based on three years of
enforcement experience under the revised Guidelines,
including several litigated mergers, and based on
economic principles drawn from oligopoly theory
regarding cost savings, competition, and consumer
welfare. pdf
