The Vast Space in Which the Vertical Merger Guidelines Lived

AuthorEdward A. Snyder
Published date01 September 2022
Date01 September 2022
The Antitrust Bulletin
2022, Vol. 67(3) 424 –433
© The Author(s) 2022
Article reuse guidelines:
DOI: 10.1177/0003603X221103114
The Vast Space in Which the
Vertical Merger Guidelines Lived
Edward A. Snyder*
The thesis of this article is that the gap left by the abandoned Vertical Merger Guidelines (VMGs)
is small, and that the gap should not be filled until a sound foundation for guidelines is built.
The VMGs operated with a narrow scaffolding in a vast space of real-world decisions and a
continuum of organizational forms. The illustrations in the VMGs were based on pricing models
that show that anticompetitive exclusion may result from vertical mergers. But these models
are incapable of generalization, and they do not account for investments, market uncertainty,
contracting problems, information asymmetries, and governance issues. Perplexingly, the VMGs
ignored research that considers such factors and illuminates a broad range of empirically verifiable
efficiencies. The requisite foundation for effective vertical guidelines is not in place. Until it is
developed, replacements will fail to screen vertical mergers that do not raise concerns and will not
be of assistance when mergers are challenged. Antitrust scholars could advance the foundational
work by developing authoritative briefs on topics such as anticompetitive exclusion, asset-specific
investments, incomplete contracts and opportunistic behavior, information asymmetries and
principal–agent problems, the purposes and effects of restrictive contracts, and the implications
of network economies for the scope of firms.
vertical merger guidelines, vertical integration
I. Introduction
Important questions follow from the decisions by the Federal Trade Commission (FTC) and the
Department of Justice (DOJ) to abandon the Vertical Merger Guidelines (VMGs)1: How much of a void
is left? Should the VMGs be replaced? These questions should be answered bearing in mind that useful
*Yale University, New Haven, CT, USA
Corresponding Author:
Edward A. Snyder, Yale University, New Haven, CT 06520, USA.
1103114ABXXXX10.1177/0003603X221103114The Antitrust BulletinSnyder
1. The DOJ and FTC adopted the 2020 Vertical Merger Guidelines on June 30, 2020. These superseded the portions of the
1984 Merger Guidelines that dealt with vertical mergers. See Department of Justice and Federal Trade Commission (2020).
The FTC and the DOJ withdrew the VMGs in the second half of 2021. Various forms of guidelines for vertical mergers and
vertical restraints have been in place since 1968.

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