THE CUSTOMER IS SOMETIMES RIGHT: THE ROLE OF CUSTOMER VIEWS IN MERGER INVESTIGATIONS

Antitrust enforcement officials and practitioners generallyagree that customers should have a prominent role in the mergerreview process. The question of the appropriate level of reliancethat competition authorities and courts should give to customertestimony has been the subject of considerable debate sincethe Arch Coal and Oracle decisions. This paper contains a comprehensivediscussion of the use of customer testimony throughout the U.S.merger review process, from the initial merger notificationfiling to injunction proceedings in federal court. We discussthe benefits from and problems with the use of customer testimony,including how these problems have led to litigation losses forthe U.S. antitrust authorities. What is the appropriate roleof customer testimony and when is it most probative? We contendthat customers can provide investigators and judges with informationregarding several relevant issues in an acquisition, includingindustry structure, geographic and product demand substitution,and acceptance of potential market entrants. In contrast, customerswill have considerably less information relevant to the likelihoodof entry, the extent of any merger-specific efficiencies, andthe validity of a failing firm defense. They will almost neverbe qualified to offer legal conclusions, such as the propermarket definition or likely competitive effects of a proposedmerger. We conclude that courts have generally remained consistentin their reliance on customer testimony, including in the ArchCoal and Oracle cases, and that customer testimony, despiteits limitations, should and will continue to be important ateach stage of the merger review process.     

Increasing Participation and Compliance in International Climate Change Agreements

Scientific and economic consensus points to the need for a credible and cost-effective approach to address the threat of global climate change, but the Kyoto Protocol to the U.N. Framework Convention on Climate Change appears incapable of inducing significant participation and compliance. We assess the Protocol and alternative policy architectures, with particular attention to their respective abilities to induce participation and compliance. We find that those approaches that offer cost-effective mitigation are unlikely to induce significant participation and compliance, while those approaches that are likely to enjoy a reasonably high level of implementation by sovereign states are sorely lacking in terms of their anticipated cost effectiveness. The feasible set of policy architectures is thus limited to second-best alternatives.