Tethering Vertical Merger Analysis

Antitrust practitioners are mis-applying simple vertical merger screening techniques (e.g. vertical foreclosure arithmetic, price pressure analysis) to reach flawed and internally inconsistent conclusions about vertical mergers. Specifically, practitioners have struck on a formula for claiming harm from vertical mergers: They argue that relatively low upstream margins mean that, post-merger, the merged firm has an incentive to disadvantage rivals’ access to the upstream product thus driving mo