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42 J. Corp. L. 403 (2016-2017)
What Structural Presumption: Reuniting Evidence and Economics on the Role of Market Concentration in Horizontal Merger Analysis

handle is hein.journals/jcorl42 and id is 421 raw text is: What Structural Presumption?: Reuniting Evidence and Economics on the Role of Market Concentration in Horizontal Merger Analysis Sean P. Sullivan* The structural presumption is a proposition in antitrust law standing for the typical illegality of mergers that would combine rival firms with large shares of the same market. Courts and commentators are rarely precise in their use of the word presumption and there is foundational confusion about what kind of presumption this proposition actually entails. It could either be a substantive factual inference based on economic theory or a procedural device for artificially shifting the burden of production at trial. This Article argues that the substantive inference interpretation is the better reading of case law and the sounder application of the laws of antitrust and evidence. By instead interpreting the structural presumption as a formal rebuttable presumption, modern merger analysis needlessly complicates the use of market concentration evidence and may be systematically undervaluing the probative weight of this evidence. At least in this context, a formal presumption likely confers less evidentiary weight than a simple substantive inference. 1. INTRODUCTION.............................................................405 II. THE QUESTION POSED....................... ...............................408 A. Market Concentration Evidence.................................408 B. The Structural Presumption...................................410 C. Evidentiary Presumptions....................................411 1. Substantive Factual Inferences..............................412 2. Rebuttable (Burden-Shfiting) Presumptions .....................413 D. Competing Interpretations................... ................415 III. THE CASE LAW HISTORY ...................................................416 A. The 1960s (Philadelphia National Bank).............. ............416 B. The 1970s (General Dynamics)................................420 C. The 1980s and 1990s (Baker Hughes)............................422 IV. POSITIVE ANALYSIS.......................................................424 A. The Probative Value ofMarket Concentration ......... .................... 425 Bureau of Competition, Federal Trade Commission. This Article reflects the personal views of the author. It does not necessarily represent the views of the United States Govemnment or Federal Trade Commission, which have neither approved nor disapproved its content. Contact the author at ssully@gmail.com. This Article has benefitted from the thoughtful comments of Jon Baker, Malcolm Coate, Josh Fischman, Larry Fullerton, Mike Gilbert, Josh Goodman, Rich Hynes, Paul Rothstein, George Ruthergien, Steve Salop, and workshop participants at Duke, Georgetown, and Northwestern.

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