1

Statement of Commissioner Christine S. Wilson

In the Matter of Staples, Inc. / Essendant, Inc.

File No. 181-0180

January 28, 2019

Staff in this case conducted a thorough examination, sifted through the resulting evidence to 

identify legitimate antitrust concerns, and crafted a remedy to address them. I therefore support 

the action the Commission takes today. Given my dissenting colleagues’ desire to abstract from 

the facts of this case to discuss vertical merger policy writ large, I write separately to express my 

views. To be clear, I base my vote upon the theories, evidence, and facts of this case, rather than 

upon any general view of what the Commission’s vertical merger policy is or should be.

A. The Concerns Voiced About Vertical Mergers Are Part of a Broader Debate

It is fashionable today to argue that antitrust policy has long been too permissive. My two 

dissenting colleagues echo this claim,1 citing left-leaning Washington think tanks and a few 

academics.2 According to some proponents of this view, our alleged laxity in antitrust 

enforcement has led to historic levels of consolidation and concentration. This, in turn, is 

apparently the cause of all that ails us, from declining competitiveness to greater income 

inequality, stagnant wages, and reduced innovation.3

Yet there is scant evidence that markets are less competitive today than they were in some illdefined golden age of yore. Commentators most often point to general upward trends in the 

number of mergers, their valuations, or the size of the largest businesses.4 While I do not dispute 

the accuracy of these broad statistics, they simply do not support such a sweeping claim about 

 1 Dissenting Statement of Commissioner Rebecca Kelly Slaughter at 2 & n.6, Staples/Essendant, File No. 181-0180 

(Jan. 28, 2019) (“I am particularly concerned that the current approach to vertical integration has led to substantial 

under-enforcement. . . . I am also concerned about under-enforcement of horizontal mergers.”); Dissenting 

Statement of Commissioner Chopra at 2, Staples/Essendant, File No. 181-0180 (Jan. 28, 2019) (“I share the 

concerns raised by Commissioner Slaughter and agree that our approach can lead to lax enforcement.”).

2 Dissenting Statement of Commissioner Slaughter, supra note 1, at 1 (“Right now, a great debate is taking place in 

Washington policy circles and even around the country at family dinner tables. The debate concerns the 

consequences for American citizens of fewer and more dominant companies controlling large swaths of industries 

and firms across sectors of the economy.”); see id. at 1 n.1 (collecting citations to work by the Roosevelt Institute, 

Open Markets Institute, and academics Grullon et al.).

3 See, e.g., Senate Democrats, A Better Deal: Cracking Down on Corporate Monopolies, at 1 (2017) [hereinafter A 

Better Deal], https://www.democrats.senate.gov/imo/media/doc/2017/07/A-Better-Deal-on-Competition-and-Costs1.pdf (“Over the past thirty years, growing corporate influence and consolidation has led to reductions in 

competition, choice for consumers, and bargaining power for workers. The extensive concentration of power in the 

hands of a few corporations hurts wages, undermines job growth, and threatens to squeeze out small businesses, 

suppliers, and new, innovative competitors.”)

4 See, e.g., Dissenting Statement of Commissioner Slaughter, supra note 1, at 2 (arguing vertical mergers “present an 

enforcement challenge that we must meet” because “companies announced mergers at record rates in 2018,” “three 

of the five largest mergers announced between 2016 and the fall of 2018 had vertical components,” and “some 

observers believe that recent high-profile vertical mergers . . . will spark further vertical merger activity”); A Better 

Deal, supra note 3, at 1 (“Over the last thirty years, courts and permissive regulators have allowed large companies 

to get larger, resulting in higher prices and limited consumer choice in daily expenses such as travel, cable, and food 

and beverages.”).
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the failure of American antitrust policy. What I would find persuasive, but have not seen, is 

evidence that firms’ market power has increased significantly in relevant antitrust markets 

throughout the American economy and that this change has meaningfully harmed American 

consumers.5 My dissenting colleagues do not make this more probative claim, and for good 

reason; there is no such evidence today.

What we see instead are highly flawed analyses6 that have been roundly criticized.7 Perhaps the 

most common mistake assumes increased concentration, and consequently consumer harm, using 

ad hoc estimates of increased revenue shares in one industry or another.8 As any practitioner 

knows, broadly defined “industries” are rarely coterminous with relevant antitrust markets,9

which usually are defined around the demand substitutes available to customers. Nor are 

revenues always the best measure of competitive significance. Even if these industry revenue 

shares were calculated within a relevant antitrust market, and even if they contained all relevant

competitors,10 courts routinely recognize that such shares are merely the first step in a much 

deeper market power analysis.11 They therefore tell us nothing about whether merger policy has 

 5 As in any case we bring, such an analysis typically requires one to define a relevant market, identify competitors, 

estimate each rival’s competitive significance, evaluate entry, exit, repositioning, and other changes to these 

competitive dynamics, and estimate how consumer welfare is likely to change as a result of the proposed 

transaction.

6 See OPEN MARKETS INSTITUTE, AMERICA’S CONCENTRATION CRISIS (2019), available at

https://concentrationcrisis.openmarketsinstitute.org/; JOHN KWOKA, MERGERS, MERGER CONTROL, AND REMEDIES:

A RETROSPECTIVE ANALYSIS OF U.S. POLICY (2015); COUNCIL OF ECONOMIC ADVISORS, BENEFITS OF COMPETITION 

AND INDICATORS OF MARKET POWER (updated May 2016), available at

https://obamawhitehouse.archives.,gov/sites/default/files/page/files/20160502_competition_issue_brief_updated_cea

.pdf.

7 See Michael Vita & F. David Osinski, John Kwoka’s Mergers, Merger Control, and Remedies: A Critical Review, 

82 ANTITRUST L.J. 361 (2018); Joshua D. Wright, “Market Concentration,” Note submitted to the Hearing on 

Market Concentration, Directorate for Financial and Enterprise Affairs, Competition Committee, OECD (June 7, 

2018), https://one.oecd.org/document/DAF/COMP/WD(2018)69/en/pdf; Gregory J. Werden & Luke M. Froeb, 

Don’t Panic: A Guide to Claims of Increasing Concentration, ANTITRUST (forthcoming 2019), available at 

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3156912 (critiquing the CEA analysis).

8 See, e.g., OPEN MARKETS INSTITUTE, supra note 6; Senate Democrats, A Better Deal, supra note 3, at 2-3.

9 For example, the Open Markets Institute estimates market shares for the $525 billion “e-commerce” industry, 

which is hardly a relevant antitrust market. See OPEN MARKETS INSTITUTE, supra note 6, “E-Commerce.”

10 Omitting or conflating competitors is a common defect in these data. For example, the recent Open Markets 

Institute analysis discloses in fine print that it omits all imports, which are significant for products such as washing 

machines. See id. (“Data does not include market share for foreign imports.”). The same analysis also lumps all 

“Store Brand” (private label) peanut butter brands together, thereby treating products sold by many different 

competitors as if they were all under one roof. See id., “Peanut Butter.”

11 See, e.g., United States v. General Dynamics Corp., 415 U.S. 486, 494-98 (1974) (affirming the district court’s 

dismissal of a merger challenge in which “[t]he Government sought to prove a violation of § 7 of the Clayton Act 

principally through statistics showing that within certain geographic markets the coal industry was concentrated 

among a small number of large producers; that this concentration was increasing; and that the acquisition of United 

Electric would materially enlarge the market share of the acquiring company and thereby contribute to the trend 

toward concentration” because “[i]n Brown Shoe v. United States, we cautioned that statistics concerning market 

share and concentration . . . were not conclusive indicators of anticompetitive effects” and finding that changes in a 

coal miner’s ability to compete in the future merit discounting its present market share); Am. Council of Certified 

Podiatric Physicians & Surgeons v. Am. Bd. of Podiatric Surgery, Inc., 185 F.3d 606, 623 (6th Cir. 1999) 

(explaining, in a Section 2 case, that “market share is only a starting point for determining whether monopoly power 
3

allowed firms to amass the market power required to raise prices, restrict output, or reduce 

quality.

Despite the dearth of evidence that antitrust policy has failed to arrest the accumulation of 

market power,12 many – including proponents of the so-called “Better Deal” – question 

essentially everything we have learned about sound antitrust enforcement. They ask: Should we 

continue to use the consumer welfare standard as our lodestar, or instead jettison it in favor of a 

more flexible (and amorphous) multifaceted analysis that examines a merger’s impact on wage 

levels, employment, suppliers, competitors, and any other goals the decision-maker cares to 

add? Should we continue to evaluate horizontal mergers under the current framework, which 

considers industry structure alongside entry, efficiencies, and several other competitive 

dynamics,13 or should we return to earlier rules that emphasized industry structure to the 

exclusion of any other relevant factors?14 Finally, and most pertinent for today’s discussion, 

should we assume that, in the words of Commissioner Slaughter, vertical mergers “can be just as 

pernicious in sapping our economy’s vitality”15 and that “the current approach to vertical 

integration has led to substantial under-enforcement”?16

B. Procedural Concern

Before turning to the substance, my dissenting colleagues’ eagerness to rethink vertical merger 

policy raises a procedural concern: It is folly to think that the Commission unilaterally can “fix” 

 

exists, and the inference of monopoly power does not automatically follow from the possession of a commanding 

market share”). These cases make clear that courts have rejected the old Structure-Conduct-Performance paradigm 

advanced by Joe Bain. See generally Herbert J. Hovenkamp, The Neal Report and the Crisis in Antitrust, at 4, Univ. 

Iowa L. Stud. Res. Paper No. 09-09 (Mar. 5, 2009), available at

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1348707 (describing the fall of the S-C-P model into “the dung 

heap of defunct economic doctrines”).

12 Although there is today no evidence of a widespread failure of competition policy, there is ample evidence that 

vested interests abuse government regulation to carve out spaces safe from competition. Competitor-erected 

licensing requirements keep capable individuals from entering the vocations of their choice. Certificate of need 

requirements keep new hospitals from entering incumbents’ regions. Local government regulations restrict the 

ability of “gig economy” competitors, particularly ride-hailing services and short-term lodging rental firms, to 

compete against long-established franchises. Sectoral regulation, such as in banking, communication, and 

transportation, often favors large incumbents over nimble new competitors. Regulatory processes at the U.S. Food 

and Drug Administration – for example, Citizens’ Petitions – are abused by branded manufacturers to delay the 

entry of lower-cost generic competitors, sometimes for years. Government-imposed restraints are at least as 

deleterious to competition as those imposed by private entities, and in many instances are more durable.

13 See U.S. DEP’T OF JUSTICE & FED. TRADE COMM’N, HORIZONTAL MERGER GUIDELINES (issued Aug. 19, 2010), 

available at https://www.ftc.gov/sites/default/files/attachments/merger-review/100819hmg.pdf. 

14 See, e.g., Open Markets Institute, The Failure and Potential Redemption of Federal Merger Policy at 2, Comments 

Submitted to the U.S. Federal Trade Commission, Hearings on Competition and Consumer Protection in the 21st

Century, Comment #FTC-2018-0053-D-0021 (filed Aug. 20, 2018) [hereinafter Open Markets Institute FTC 

Comments] (“The agencies should look to the 1968 Merger Guidelines as a template. Accordingly, they should 

abandon the current rule of reason-like framework and establish market share and market concentration thresholds 

for horizontal and vertical mergers. Mergers that exceed these thresholds should be presumptively or per se illegal.”)

15 Dissenting Statement of Commissioner Slaughter, supra note 1, at 1.

16 Id. at 2.
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this perceived problem simply by being more aggressive. As the decision of the federal district 

court in the AT&T-Time Warner case makes clear,17 the antitrust agencies do not have the last 

word, and aggressive agency enforcement may well backfire by creating binding precedents that 

constrain future challenges to problematic deals.

C. Substantive Concerns

Recognizing both our limited authority to alter antitrust law and the fact that we as government 

enforcers bear the ultimate burden of proof before a neutral decision-maker (i.e., a federal court), 

let us finally turn to the crux of the issue raised by my dissenting colleagues: What do we know 

about the likely competitive effects of vertical mergers?

We know that vertical mergers by definition combine firms that operate at different levels of 

production. Consequently, and unlike in a horizontal merger, a vertical merger does not alter 

concentration in any relevant market.18 Purely vertical mergers therefore do not implicate many 

of the key competitive dynamics – and particularly the elimination of current competition 

between the merging firms – at play in horizontal mergers.19 Indeed, even the scholar my 

colleague cites in support of her sweeping skepticism of existing vertical merger policy says that 

competitive harm is likely to occur only in a narrow set of circumstances.20 Ultimately, we seek 

to determine not whether harm is theoretically possible, but whether – as required by Section 7 

 17 United States v. AT&T, No. 17-2511, slip op. at 4 (D.D.C. June 12, 2018), appeal docketed, No. 18-5214 (D.C. 

Cir.)

18 For example, if a merger unites a firm with 30 percent of upstream market and a firm with 25 percent of the 

downstream market, immediately after close the combined firm would still control 30 percent of the upstream 

market and 25 percent of the downstream market. Its shares have not changed, nor have those of its competitors. 

By contrast, a horizontal merger combining firms with 25 and 30 percent of the same relevant antitrust market 

results in a combined firm with 55 percent and a marketplace with one fewer competitor.

19 See, e.g., D. Bruce Hoffman, Director, FTC Bureau of Competition, Vertical Merger Enforcement at the FTC: 

Remarks at the Credit Suisse 2018 Washington Perspectives Conference, at 2-3, Washington D.C., Jan. 10, 2018, 

available at

https://www.ftc.gov/system/files/documents/public_statements/1304213/hoffman_vertical_merger_speech_final.pdf 

(“In contrast [to horizontal mergers], vertical mergers do not combine substitutes, and in fact often involve 

complements . . . . Where horizontal mergers reduce competition on their face . . . vertical mergers do not.”).

20 See Michael H. Riordan & Steven C. Salop, Evaluating Vertical Mergers: Reply to Reiffen and Vita Comment, 63 

ANTITRUST L.J. 943, 944 (1995) (agreeing with other commentators that “efficiency benefits provide the rationale 

for many vertical mergers, can lead to increased competition and consumer welfare, and are sufficient to offset 

potential competitive harms in many cases”); Steven C. Salop, Revising the Vertical Merger Guidelines: 

Presentation at the FTC Hearings on Competition and Consumer Protection in the 21st Century, at 8 (Nov. 1, 2018), 

available at

https://www.ftc.gov/system/files/documents/public_events/1415284/ftc_hearings_5_georgetown_slides.pdf (“A 

stronger overarching procompetitive presumption for vertical mergers does not make sense in oligopoly markets.”); 

see also, e.g., James C. Cooper, Luke M. Froeb, Dan O’Brien, & Michael G. Vita, Vertical Merger Policy as a 

Problem of Inference, 23 INT’L J. INDUS. ORG. 639, 641 (2005) (“The theory shows that vertical practices potentially 

can harm competition. This finding is fragile, however, as anticompetitive equilibria emerge only under specific –

and difficult to verify – assumptions about (among other things) costs, demand, the nature of input contracts, 

conditions of entry, the slope of reaction functions, and the information available to firms.”).
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of the Clayton Act – such harm is likely to “substantially lessen competition, or to tend to create 

a monopoly” in a relevant antitrust market.21

On the other side of the ledger, we know that integrating operations at different levels of 

production often yields clear economic benefits.22 Perhaps the most commonly cited benefit in 

the economic literature is the elimination of double marginalization (EDM), which is simply to 

say that a firm has an economic incentive to reduce the total profit margin it charges customers 

when it operates at successive levels of production.23 Some commentators view EDM as a 

phenomenon inherent in vertical mergers,24 which may indicate that a lower burden of proof for 

at least some efficiencies claims would be appropriate in the vertical merger context.25 That 

said, our recent hearing on vertical mergers featured a lively debate on whether EDM arises in all 

vertical mergers.26 Focusing solely upon the narrow circumstances under which anticompetitive 

effects are plausible,27 economic theory suggests that the potential gains from EDM are likely 

significant.28

 21 15 U.S.C. § 18; AT&T, No. 17-2511, slip op. at 4 (holding the government failed to meet its burden under Section 

7 “to establish that the proposed transaction is likely to lessen competition substantially”).

22 For the seminal work, see R.H. Coase, The Nature of the Firm, 4 ECONOMETRICA 386 (1937).

23 See, e.g., Francine Lafontaine, Vertical Mergers: Presentation at the FTC Hearings on Competition and Consumer 

Protection in the 21st Century, at 86 (Nov. 1, 2018), available at

https://www.ftc.gov/system/files/documents/public_events/1415284/ftc_hearings_5_georgetown_slides.pdf 

(“Eliminating ‘double markups’”); Remarks of D. Bruce Hoffman, supra note 19, at 3 (“Due to the elimination of 

double-marginalization and the resulting downward pressure on prices, vertical mergers come with a more built-in 

likelihood of improving competition than horizontal mergers.”); Paul Yde, Non-Horizontal Merger Guidelines: A 

Solution in Search of a Problem?, ANTITRUST, at 74, 75-76 (Fall 2007) (seeking to categorize the circumstances 

under which the net competitive effects of a vertical merger, including the elimination of double marginalization, 

“will benefit consumers” or “might be anticompetitive”).

24 Transcript at 19, 25, 116, 141, FTC Hearings on Competition and Consumer Protection in the 21st Century, 

Hearing #5 (consumer welfare and vertical merger policy), available at 

https://www.ftc.gov/system/files/documents/public_events/1415284/ftc_hearings_session_5_transcript_11-1-18.pdf 

(statements of Prof. Shapiro) (“[T]here are some inherent efficiencies – at least possible efficiencies including 

elimination of double marginalization. . . . So I think what is fundamentally different is that how do we handle the 

efficiencies in the vertical deals than horizontal, and we are hearing from panels about these inherent efficiencies,

which economists would agree with, including me.”)

25 The FTC also held hearings on the appropriate welfare standard. See FTC, Hearings on Competition and 

Consumer Protection in the 21st Century, Hearings #1 & #5 (review of competition and consumer protection 

landscape, concentration and competitiveness in the U.S. economy, privacy regulation, consumer welfare standard 

in antitrust; consumer welfare and vertical merger policy), Sept. 13, 2018 & Nov. 1, 2018, 

https://www.ftc.gov/news-events/events-calendar/ftc-hearing-5-competition-consumer-protection-21st-century. 

This debate similarly could have implications for the analysis of both vertical and horizontal mergers. For example, 

if total surplus (or aggregate economic welfare) is selected as the appropriate welfare standard, then it would be 

unnecessary to analyze whether and to what extent efficiencies may be passed through to consumers. See, e.g., 

Roger D. Blair and D. Daniel Sokol, Welfare Standards in U.S. and E.U. Antitrust Enforcement, 81 FORDHAM L.

REV. 2497 (2013).

26 See FTC, Hearings on Competition and Consumer Protection in the 21st Century, Hearing #5 (consumer welfare 

and vertical merger policy), Nov. 1, 2018, https://www.ftc.gov/news-events/events-calendar/ftc-hearing-5-

competition-consumer-protection-21st-century.

27 Hearing #5 Transcript, supra note 27, at 19, 25, 116, 141, (statements of Prof. Salop and Mssrs. Hoffman and Yde 

agreeing that, in Mr. Yde’s words, “we are only going to look at vertical transactions where we are confident that we 

are looking at an oligopoly at both stages”); Salop, Revising the Vertical Merger Guidelines, supra note 20, at 8 
6

Vertical mergers also generate other procompetitive benefits. For example, these mergers allow 

firms at successive levels to coordinate their production, design, or innovation activities, thereby 

reducing costs, increasing quality, and speeding the introduction of new products.29 Vertical 

integration also incentivizes greater investment by harmonizing upstream and downstream 

incentives and by reducing transaction costs, “free-riding,” and the risk of hold-up.30 Although 

my colleague is correct to note that vertical agreements short of a merger can confer similar 

procompetitive benefits,31 I have not seen any evidence – and she does not cite any – for the 

proposition that these contractual arrangements necessarily replicate the benefits of a full merger. 

To the contrary, economists have long known that there are many circumstances in which 

contractual arrangements may be inferior to mergers.

32

We also know that economic models that attempt to predict the net competitive effect of a given 

vertical merger are often more art than science. Most models identify the possibility of both 

procompetitive and anticompetitive effects, and sometimes even their magnitude, but make no 

attempt to assign probabilities to any of them. Standing alone, these “highly stylized [and] 

largely game-theoretic models” do not provide clear guidance on how to separate the wheat from 

 

(arguing “[e]nforcement should be focused on oligopoly markets” because in these markets the risk of 

anticompetitive harm may be larger and the likelihood of procompetitive benefits may be smaller); Steven C. Salop, 

Invigorating Vertical Merger Enforcement, 127 YALE L.J. 1962, 1972 (2018) (“While vertical mergers in oligopoly 

markets should not be subject to near-per se illegality, they also are not entitled to near-per se legality.”); see id. at 

1967 (“[F]oreclosure concerns cannot simply be dismissed in oligopoly markets.”); id. at 1969 (“[I]n oligopoly 

markets with multiple competitors, vertical mergers can harm competition from input or customer foreclosure, even 

without coordination.”).

28 Cooper, Froeb, O’Brien, & Vita, supra note 20, at 658 (“Most models that predict (potential) harm from vertical 

restraints require pre-existing market power at multiple stages of production. This condition usually implies the 

existence of efficiencies from vertical control, and the magnitude of the efficiency often rises monotonically with the 

level of pre-existing market power.”).

29 See, e.g., Salop, Revising the Vertical Merger Guidelines, supra note 20, at 13.

30 See, e.g., Lafontaine, Vertical Mergers, supra note 23, at 86.

31 See Dissenting Statement of Commissioner Slaughter, supra note 1, at 4 (asserting “claimed [efficiency] benefits 

should not be taken at face value” because, among other things, “[t]he claimed benefits may not be merger-specific 

and instead may be achieved via unilateral conduct or contractual arrangements”).

32 See, e.g., Paul L. Joskow, Vertical Integration, in HANDBOOK OF NEW INSTITUTIONAL ECONOMICS 321 (C. 

Menard & M. Shirley eds., 2008) (summarizing the literature on various forms of vertical integration, from 

contracting to merger, and explaining that “[c]ontractual incompleteness, and its interaction with the attributes of 

different types of transactional attributes including asset specificity, complexity, and uncertainty, plays a central role 

in the evaluation of the relative costs of governance through market-based bilateral contracts versus governance 

through internal organization”); Oliver E. Williamson, The Theory of the Firm as Governance Structure: From 

Choice to Contract, 16 J. ECON. PERSP. 171, 179-192 (2002) (describing the “make-versus-buy” decision, graphing 

the relative attractiveness of various options, and addressing its application to vertical integration); Benjamin Klein, 

Robert G. Crawford, & Armen A. Alchian, Vertical Integration, Appropriable Rents, and the Competitive 

Contracting Process, 21 J. L. & ECON. 297 (1978) (identifying “the possibility of post-contractual opportunistic 

behavior” as one reason a firm may choose “an intrafirm rather than an interfirm transaction”).
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the chaff.33 The economic evidence regarding completed transactions, however, indicates the 

typical vertical merger does not harm competition.34

Given limitations in the models, and particularly in their ability to reliably predict 

anticompetitive harm, we must marry these theoretical models with hard evidence collected 

during the investigation. When the theory and facts both point to a potential diminution in 

competition, it may be appropriate to take remedial steps, as we have done here. When the 

model, the evidence, or both do not support this view, it is not appropriate to act.

D. When Crafting a Remedy, We Must Take Care Not to Impose a Cure Worse than 

the Disease

Even when we identify a vertical merger that presents meaningful antitrust problems, that is not 

the end of the analysis. As in any case, we must then choose a remedy that is narrowly tailored 

to address the likely competitive harms without doing collateral damage. This task is sometimes 

more difficult than it sounds; as I have written previously, misguided behavioral remedies –

particularly in vertical mergers – have sometimes decreased competition and harmed consumers. 

For example, I have been deeply troubled by behavioral remedies imposed in previous vertical 

mergers that required “compulsory innovation,” the “compulsory FRAND licensing of a product 

that did not yet exist,” and “long-term bans on serving specific current clients.”35 

Given the risks of either undershooting or overshooting the mark, I support conducting targeted 

retrospectives to analyze prior enforcement decisions and determine whether, going forward, 

revisions to enforcement policy or remedies need to be undertaken. I have long advocated for a 

more extensive merger retrospectives program, as retrospectives serve as an important check on 

 33 Michael A. Salinger, Vertical Mergers, in I OXFORD HANDBOOK OF INTERNATIONAL ANTITRUST ECONOMICS 551, 

574 (Roger D. Blair & D. Daniel Sokol eds., 2015).

34 See, e.g., Francine Lafontaine & Margaret Slade, Vertical Integration and Firm Boundaries: The Evidence, 45 J.

ECON. LIT. 629, 680 (2007) (conducting a broad study of past vertical integrations and concluding “even in 

industries that are highly concentrated . . . , the net effect of vertical integration appears to be positive in many 

instances”); Cooper, Froeb, O’Brien, & Vita, supra note 20, at 658 (“Most studies find evidence that vertical 

restraints/vertical integration are procompetitive” and “[t]his efficiency often is plausibly attributable to the 

elimination of double-markups or other cost savings.”); Global Antitrust Institute, Antonin Scalia Law Sch., Geo. 

Mason Univ., Comment Submitted in the Federal Trade Commission’s Hearings on Competition and Consumer 

Protection in the 21st Century, Vertical Mergers, at 5-9 (filed Sept. 6, 2018) (summarizing the available empirical 

studies and concluding that either nine or ten of the eleven studies “indicated vertical integration resulted in positive 

welfare changes” or “no change” in welfare); David Reiffen and Michael Vita, Is There New Thinking on Vertical 

Mergers? A Comment, 63 ANTITRUST L.J. 917 (1995) (arguing the economics suggests the vast majority of vertical 

mergers are efficiency-enhancing); Michael H. Riordan & Steven C. Salop, Evaluating Vertical Mergers: Reply to 

Reiffen and Vita Comment, 63 ANTITRUST L.J. 943, 944 (1995) (agreeing with Reiffen and Vita that “efficiency 

benefits provide the rationale for many vertical mergers, can lead to increased competition and consumer welfare, 

and are sufficient to offset potential competitive harms in many cases”).

35 Christine Wilson & Keith Klovers, Yes We Can, But Should We? Merger Remedies During the First Obama 

Administration, CPI ANTITRUST CHRONICLE 2 (Dec. 2014). As I explained there, I have substantially fewer qualms 

about long-standing and less invasive tools, such as the “firewalls, fair dealing, and transparency provisions” the 

Antitrust Division endorsed in the 2004 edition of its Policy Guide. U.S. DEP’T OF JUSTICE, ANTITRUST DIVISION 

POLICY GUIDE TO MERGER REMEDIES 22-25 (June 2004), available at

https://www.justice.gov/sites/default/files/atr/legacy/2011/06/16/205108.pdf.
8

whether we are employing sound enforcement policies.36 But I am wary of clearing mergers 

with remedies, after extensive investigations, while simultaneously threatening to undo those 

mergers later, which is precisely what Commissioner Slaughter hopes to do.37 Absent certainty, 

a merged entity will be reluctant to make capital and other investments that may be lost if a 

subsequent merger challenge forces it to unwind the transaction. This uncertainty is bad for both 

businesses and their consumers. If applied on anything like the scale Commissioner Slaughter 

envisions, it also risks returning the Commission to its earlier role as the “national nanny” with 

an ongoing mandate to monitor prices, output, entry, and other marketplace developments 

throughout the economy.38

Conclusion

For all of these reasons, I have grave concerns about my dissenting colleagues’ enthusiasm for 

treating all vertical mergers with skepticism and conducting a fundamental reevaluation of our 

vertical merger policy. Policy should be dictated by applicable law and relevant facts. On that 

basis, there are very few vertical mergers that should be challenged. Two of my colleagues 

believe that this is one of those few vertical mergers that the Commission should challenge, 

based on nothing more than a hunch that Staples “may” or “might” be able to harm rivals by 

integrating vertically. I prefer to base my analysis on the evidence we have gathered and the law 

as it exists today, and therefore vote to accept the limited relief we order.

 36 See “Dynamic Efficiencies in Merger Analysis,” Submission of the Business and Industry Advisory Committee, 

Presented by Christine S. Wilson to the OECD Competition Committee (June 6, 2007) at para. 58 (asserting that “it 

would be instructive for enforcement agencies to perform retrospective studies of merger enforcement decisions . . . 

to assess the efficacy of merger policy generally, and would be particularly useful in assessing the impact of 

dynamic efficiencies, given that benefits from such efficiencies may accrue over extended periods of time”).

37 Dissenting Statement of Commissioner Slaughter, supra note 1, at 9-10 (“With the benefit of pre-commitment, 

hindsight, and ongoing monitoring, we may be able to refine and bolster confidence in our analysis and deter or 

prosecute future anticompetitive conduct by Staples. Ultimately, if there is sufficient evidence of actual 

anticompetitive effects as a result of the transaction, we can and should bring an enforcement action to break-up the 

merger.”).

38 See, e.g., Daniel A. Crane & Thibault Schrepel, The Democrats’ ‘Better Deal’ Is Neither Better Nor a Deal, 

N.Y.U. J. L. & BUS. 1, 4 (2017) (“Allowing the agencies to give conditional blessing to a merger and then hover 

over the merged company for years with the constant threat of divestiture would create a ‘national nanny’ culture in 

which the agencies became de facto regulators rather than competition enforcement agencies. The fear of post hoc 

divestiture orders would deter beneficial investments and tearing apart companies integrated for years would result 

in chaos and economic loss (for all of the reasons recognized by the D.C. Circuit in Microsoft). It’s a bad idea.”).