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The Year in Review: Economics at the Antitrust Division 2021–2022

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Abstract

The President’s 2021 Executive Order urged the Division to reevaluate certain aspects of antitrust analyses, facilitate a whole-of-government approach to reinvigorating competition, and pursue aggressive antitrust enforcement. Consistent with the Order, Division economists engaged on competition issues with several federal agencies while contributing to the Division’s many investigations—including several cases that are in ongoing litigation. The Division also continued its vigorous enforcement efforts, including the proposed Cargotec-Konecranes merger and the proposed Aon-Willis Towers Watson merger. These mergers highlight issues that are frequently presented to EAG economists.

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Notes

  1. See https://www.whitehouse.gov/briefing-room/presidential-actions/2021/07/09/executive-order-on-promoting-competition-in-the-american-economy/.

  2. https://www.justice.gov/opa/press-release/file/1481811/download.

  3. https://www.justice.gov/opa/pr/departments-justice-and-labor-strengthen-partnership-protect-workers

  4. https://www.justice.gov/atr/page/file/1428651/download.

  5. https://www.justice.gov/atr/page/file/1479511/download.

  6. A “captive shipper” is a shipper that lacks economic non-rail shipping options and that has a direct rail connection to only a single railroad and thus is “captive” to that railroad.

  7. More specifically, “under reciprocal switching, an incumbent carrier transports a shipper's traffic to an interchange point, where it switches the rail cars over to the competing carrier. The competing carrier pays the incumbent carrier a switching fee for bringing or taking the cars from the shipper's facility to the interchange point, or vice versa. The switching fee is incorporated in some manner into the competing carrier's total rate to the shipper. Reciprocal switching thus enables a competing carrier to offer its own single-line rate to compete with the incumbent carrier's single-line rate, even if the competing carrier's lines do not physically reach a shipper's facility.” https://www.federalregister.gov/documents/2022/01/03/2021-28396/reciprocal-switching.

  8. See also Pittman (2010).

  9. Prior to the competition-enhancing Staggers Act of 1980, the stifling regulatory environment contributed to a decline in the US railroad industry. DOJ’s comment also noted that the concerns articulated by some that STB’s reciprocal switching proposal would be so burdensome that it might return us to that previous era were exaggerated.

  10. https://www.marinelink.com/news/konecranes-cargotec-merge-482118.

  11. https://atrnet.atr.doj.gov/subdocs/2022/401599.pdf.

  12. See Miller (2014).

  13. “Mergers: Commission clears the merger of Cargotec with Konecranes, subject to conditions,” February 24, 2022, https://ec.europa.eu/commission/presscorner/detail/en/ip_22_1329.

  14. “Konecranes and Cargotec provide an update on planned merger: Remedy requirements are more complex than expected, dialogue with relevant competition authorities continues,” Konecranes press release, February 3, 2022, https://www.konecranes.com/press/releases/2022/konecranes-and-cargotec-provide-update-on-planned-merger-remedy-requirements-are-more-complex-than-expected; “Cargotec, Konecranes Propose Remedies to Allay Antitrust Concerns,” Bloomberg Law, December 9, 2021, https://news.bloomberglaw.com/antitrust/cargotec-konecranes-propose-remedies-to-allay-antitrust-concern?context=search&index=1.

  15. “Cargotec/Konecranes: Failed Shipping Equipment Merger Illustrates Aggressive UK/U.S. Enforcement and Increased Skepticism of Remedies,” JDSupra, April 19, 2022, https://www.jdsupra.com/legalnews/cargotec-konecranes-failed-shipping-6697860/#:~:text=In%20Cargotec%2FKonecranes%2C%20the%20proposed,and%20match%E2%80%9D%20solution%20was%20unacceptable; “Cargotec/Konecranes: Red Card to Mix-and-Match Remedies?”, Copenhagen Economics, April 7, 2022, https://copenhageneconomics.com/wp-content/uploads/2022/04/Cargotec-and-Kronocranes-CE20220407.pdf

  16. https://www.gov.uk/government/news/cma-blocks-planned-cargotec-konecranes-merger; https://www.justice.gov/opa/pr/shipping-equipment-giants-cargotec-and-konecranes-abandon-merger-after-justice-department.

  17. https://www.whitehouse.gov/briefing-room/statements-releases/2022/07/14/brian-deese-remarks-on-president-bidens-competition-agenda/.

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Authors and Affiliations

  1. Economic Analysis Group (EAG), Antitrust Division of the U.S. Department of Justice, Washington, DC, 20530, USA

    Susan Athey, Russell Pittman & Fan Zhang

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  1. Susan Athey
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  2. Russell Pittman
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  3. Fan Zhang
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Correspondence to Russell Pittman.

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Athey, S., Pittman, R. & Zhang, F. The Year in Review: Economics at the Antitrust Division 2021–2022. Rev Ind Organ 61, 439–447 (2022). https://doi.org/10.1007/s11151-022-09884-9

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