By Diana L. Moss (American Antitrust Institute)
AAI issued a new white paper, “What Does Expanding Horizontal Control Mean for Antitrust Enforcement? A Look at Mergers, Partial Ownership, and Joint Ventures.” The paper is authored by AAI President and economist, Diana Moss. The paper explains that the many mechanisms for expanding horizontal ownership and control of economic resources pose ongoing challenges for merger enforcement. This is readily apparent in markets that have undergone profound structural change from horizontal consolidation and rising concentration over the last several decades, including wireless telecommunications, airlines, hospitals, health insurance, meat processing, and others.
Horizontal control is a central concept in industrial organization and frequently encountered concern in antitrust enforcement. For example, the vast majority of all merger transactions challenged by the U.S. Department of Justice (DOJ) Antitrust Division and Federal Trade Commission (FTC) involve some form of horizontal control. Horizontal mergers that completely and permanently eliminate an independent competitor receive the most attention. But other forms of horizontal control that do not completely eliminate a rival—including acquisitions of partial ownership stakes and some joint venture agreements—have no less important implications for competition and consumers.