Prof. Jonathan B. Baker
Spring 2014
Advanced Antitrust: Mergers (Law-693)
Syllabus
December 27, 2013
This two-credit advanced antitrust course will study substantive economic issues that
arise in horizontal merger analysis – during enforcement agency review and, in the event the
transaction is challenged, during litigation. The topics will include market definition, the
presumption of harm from market concentration, unilateral and coordinated competitive effects,
entry, and efficiencies. One goal for the class is to prepare students to join a team investigating
(for the government) or advocating (for the firms) a proposed merger and contribute
immediately.
The class will combine traditional topics in the antitrust analysis of horizontal megers
with multi-class simulation exercises to apply that learning. The exercises will be based upon
the pleadings and testimony in a government merger challenge litigated during Fall 2013: U.S.
v. Bazaarvoice, Inc, No. 13-cv-00133 (N.D. Cal., filed Jan. 10, 2013). (As of the date this
syllabus has been drafted, a decision is pending after trial.)
Students not previously or concurrently enrolled in Antitrust Law may register with
permission of the instructor.
Class will meet Wednesdays, from 4 pm to 5:50 pm.
Topics and Assignments
This document indicates readings through class 5, and topics and major assignments for later
class sessions.
Please note that some readings are limited to specified page excerpts from the assigned articles
or decisions, although the entire article or decision may be posted on the course MyWCL site.
The Horizontal Merger Guidelines are not posted on the course site, and may be downloaded at
http://www.justice.gov/atr/public/guidelines/hmg-2010.pdf
Class 1 (January 8)
Merger law and the structural presumption
Economics of the structural presumption
Enforcement agency investigation and litigation: overview of the process
Reading Assignment
2010 Horizontal Merger Guidelines §5.3
Jonathan Baker & Carl Shapiro, Reinvigorating Horizontal Merger Enforcement,
in Where the Chicago School Overshot the Mark: Effect of Conservative
Economic Analysis on U.S. Antitrust 235, 236-240, 251-58 (Robert
Pitofsky, ed.,2008)
Class 2 (January 15)
Market definition and buyer substitution
Recent merger litigation: initial framing of the issues
Allocation to teams for future assignments
During this class, students will be assigned to teams and sides for future primary
assignments. The size of teams will depend on the size of the class.
Reading Assignment
U.S. v. Bazaarvoice, Inc: Complaint and Answer
2010 Horizontal Merger Guidelines §4
Jonathan B. Baker, Market Definition: An Analytical Overview, 74 ANTITRUST
L.J. 129, 130-41, 145-51, 152-54 (2007)
Louis Kaplow, Why (Ever) Define Markets? 124 HARV. L. REV. 437, 438-43
(2010)
Gregory J. Werden, Why (Ever) Define Markets? An Answer to Professor
Kaplow 1-5, 9-17 (2012), http://ssrn.com/abstract=2004655
Writing Assignment
2
What is the main story set forth in the government’s complaint, and the main
counter-story set forth in the merging firms’ answer? Target length: no more
than one page; could be drafted as sentences or bullets. Please email your memo
or list of bullets to the professor by 5 pm the day before class, and bring a copy to
class.
Class 3 (January 22)
Market definition cont’d: critical loss analysis and price discrimination markets
Reading assignment
2010 Horizontal Merger Guidelines §4
Note on Critical Loss Analysis
F.T.C. v. Whole Foods Market, Inc., 502 F. Supp. 2d 1, 15-38 (2008)
F.T.C. v. Whole Foods Market, Inc., 548 F. 3d 1028, 1036-41, 1043-49 (D.C. Cir.
2008)
Class 4 (January 29)
Entry
Reading assignment
2010 Horizontal Merger Guidelines §9
Jonathan B. Baker, Responding to Developments in Economics and the Courts:
Entry in the Merger Guidelines, 71 ANTITRUST L. J. 189, 191-95, 198-202
(2003)
Class 5 (February 5)
Efficiencies
Buyer power
2010 Horizontal Merger Guidelines §§8,10
Bureau Staff Analysis and Findings, Applications of AT&T Inc. and Deutsche Telekom
AG For Consent to Assign or Transfer Control of Licenses and Authorizations,
WT Docket No 11-65 59-99 (¶¶123-244) (FCC Nov. 29. 2010)
Class 6 (February 12)
Unilateral competitive effects: differentiated product markets
Reading assignment
[readings to be provided]
3
Class 7 (February 19)
Unilateral competitive effects: bargaining models, merger simulation
Reading assignment
[readings to be provided]
Class 8 (February 26)
Coordinated competitive effects and mavericks
Reading assignment
[readings to be provided]
Class 9 (March 5)
Bazaarvoice: discussion of pre-trial briefs
Reading Assignment
U.S. v. Bazaarvoice, Inc: pre-trial briefs
Writing Assignment
Please prepare a brief “reaction memo” discussing something you liked or
disliked, or thought was done well or poorly, by each side in its pre-trial brief.
Target length: a page or less. Please email your memo to the professor by 5 pm
the day before class, and bring a copy to class.
Class 10 (March 19)
Role of expert economists in merger review and litigation
Reading Assignment
[readings to be provided]
Class 11 (March 26)
Bazaarvoice: discussion of abbreviated trial records
The class discussion will attempt to clarify key issues to address in future
assignments
Reading Assignment
U.S. v. Bazaarvoice, Inc: abbreviated trial records
Class 12 (April 2)
4
Potential competition
Innovation competition
Reading assignment
[readings to be provided]
Class 13 (April 9)
Bazaarvoice: student post-trial oral arguments
Assignment
Each team should prepare to present a ten minute “post-trial final argument”
orally. The argument should be based on the abbreviated record created for the
assigned case. Each student should also prepare two questions that it thinks a
judge should ask an advocate for the other side, and submit those questions in
writing by 5 pm the previous day.
This assignment is intended primarily as preparation for drafting post-trial briefs,
not as instruction in oral advocacy (though that will be an ancillary benefit). The
“judges” will be students on the other side, who should ask the questions they
prepared. (Hence each student should expect to present an oral argument on a
team, and to serve as a judge when some other team argues.)
Class 14 (April 16)
Bazaarvoice: discussion of litigation and district court opinion
Reading assignment
U.S. v. Bazaarvoice, Inc: district court decision (if available)
Please come to class prepared to discuss how the court addressed the
substantive economic issues that have been the focus of the course, and
what the prospects would be for success on appeal by the losing side.
Final writing assignment; deadline to be determined
Using the abbreviated record, please draft a post-trial brief for the district court judge
deciding the case taking your assigned side. (This is an individual assignment, not a team
project.) Please do not look at the post-trial briefs submitted by the parties. (They may
not be helpful in any case, as they are based on a different record and you may prefer to
emphasize different arguments and present arguments differently.) Target length: up to
15 double-spaced pages.
5