The Whirlpool-Maytag Merger and The End of Antitrust
Check out this post titled The End of Antitrust over at Oligopoly Watch, which is highly critical of the green light for the Whirlpool-Maytag merger. In response to the DOJ’s press release, according to which
this merger is not likely to give the merged entity market power in the sale of any of its products in the United StatesSteve writes:
Not likely to give the merged entity market power? Then, Microsoft has no market power, I suppose. The idea is that at some future point, Korean and Chinese companies might possibly enter the US in a big way. This creates a new standard for antitrust, what we might call the “crystal ball” approach. Using it, it is not possible to have any antitrust rules. Let Coca Cola and Pepsico merge, Japan’s Suntory might garb a big market share at some future time. Let Mars, Nestle and Hershey all join up; some Indian sweets company might be thinking of launching products in the US.From the press release, it is clear that expansion and entry were the key reasons for clearing the merger, followed by efficiencies. I am particularly interested in the timeframe that DOJ considered for entry and expansion to become effective, that’s Steve’s “crystal ball” point. Assuming that the government did indeed relax its standards for considering effective entry and expansion in response to a hypothetical price increase, would that relaxed standard also apply to exclusionary conduct? The more comfortable we get with potential long run effects, the more powerful the entry argument will be. But by the same token, the further we dare to look into the future, the more plausible stories of exclusion and recoupment will become. I am looking forward to learning more about the government’s reasoning in this case in the months to come.
Technorati Tags: antitrust, Whirlpool-Maytag, DOJ, entry, exclusion
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April 1st, 2006 at 10:16 pm
Maytag Caught in a Brand Architecture Whirlpool…
Whirlpool has just completed the buyout of 115 year old Maytag and will immediately start integrating the companies. The hoary old Maytag name came with a $2.6 bil price tag, including Whirlpool’s assumption of Maytag’s debt. I’ll have more on th…
April 3rd, 2006 at 2:23 pm
[…] And while you’re at the AAI’s webpage, I recommend rereading their views on the Maytag-Whirlpool merger, expressed as a response to the famous Wall-Street-Journal editorial. An interesting read now that we know how the DoJ came out, as we reported here, and have seen some reactions. You can also bookmark this on del.icio.us or check the cosmos […]