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Jorge Padilla, Should Profit Margins Play a More Decisive Role in Horizontal Merger Control? – A Reply to Valletti and Zenger, Journal of European Competition Law & Practice, Volume 9, Issue 6, June 2018, Pages 379–381, https://doi.org/10.1093/jeclap/lpy034
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I. Introduction
In this brief article, I provide a few comments on the rejoinder published in this journal1 by Prof Tommaso Valletti and Dr Hans Zenger in which they discuss the main conclusions of my assessment of the appropriate role of margin analysis in horizontal merger control, also published in this journal.2 My goal here is twofold. Firstly, I intend to clarify our points of agreement and disagreement. Secondly, I provide further argumentation in defence of my views on those issues where we are not aligned.
The paper is structured in two sections. In Section II, I set out the points of agreement between us, which are many and fundamental. In Section III, I identify our main disagreements, which are few but non-trivial, and put forward additional arguments in support of the central claim of my first paper: while profit margins should play, and do play, a role in the assessment of the potential price effect of horizontal mergers, there is no justification for the adoption of a policy that targets mergers in high-margin markets or high-margin firms and subjects them to stricter controls. Section IV concludes.
