1. Substantive Merger Analysis in Recent Cases and the Treatment of Coordinated Effects William E. Kovacic U.S. Federal Trade Commission 7 th Annual Trans-Atlantic Antitrust Dialogue BIICL, London May 1, 2007

2. Coordinated Effects After Airtours and Arch Coal Decisions to Prosecute Structural presumptions attenuated Greater burden to explain how post-Merger coordination will take place Decisions Not to Prosecute What constitutes a suitable basis for closing a file after Sony/BMG?

3. Significance of Coordinated Effects in Modern Practice Relatively Few Litigated Coordinated Effects Cases Greater Reliance in Analysis and Prosecution Upon Unilateral Effects Temptations to fit matters artificially into unilateral effects framework?

4. US Horizontal Merger Cases Since 1960: A Structural Perspective 1960s: 12 to 11 1970s: 9 to 8 or 8 to 7 1980s: 6 to 5 (1982 DOJ Guidelines) 1990s: 4 to 3 [4 to 2, 3 to 2, 2 to 1] 2000s: 4 to 3 [cf. Arch Coal (5 to 4)] See also AirTours (evidence/fuller story)

5. Is Post-Merger Coordination Likely to Occur? Permissive Assumptions in Recent Cases Is past episode of collusion essential? Learning from Modern Cartel Cases: Stigler Meets Coase and Williamson Ingenuity and effort Kovacic, Marshall, Marx, Raiff, Lessons for Competition Policy from the Vitamins Cartel, in The Political Economy of Antitrust 149 (Ghosal & Stennek eds., 2007)

6. Accounting for Incentives Likelihood of Coordination: Importance of Anticipated Payoffs Kovacic, Marshall, Marx & Schulenberg, Coordinated Effects in Merger Review, 2006 Fordham Competition Law Institute 271 (B. Hawk ed. 2007) Kovacic, Marshall, Marx & Schulenberg, Quantitative Analysis of Coordinated Effects (October 2006).

7. Institutional Arrangements: The Research Agenda Apply Lessons of Cartel Experience Invest in Ex Post Assessments Remedies: Canada, EU, UK, US, OECD Case Studies: e.g. Cruise Lines Kovacic, Using Ex Post Evaluations to Improve the Performance of Competition Authorities, 31 Journal of Corporation Law 503 (2006)