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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