Review of Industrial Organization 25: 353–374, 2004.
© 2004 Kluwer Academic Publishers. Printed in the Netherlands.
Economics Research at the FTC: Information,
Retrospectives, and Retailing
, DANIEL HOSKEN and JANIS PAPPALARDO
Federal Trade Commission, Bureau of Economics, 600 Pennsylvania Ave., N.W.,
Washington DC 20580, U.S.A.
Abstract. Individual Federal Trade Commission (FTC) cases invariably raise broad
questions about consumers, markets, and effective enforcement policy. Recent consumer
protection cases raise questions about information regulation. Horizontal merger enforce-
ment has recently focused on retrospective analysis of mergers and the role of the
retail sector in predicting the effects of manufacturer mergers. In this paper, we describe
research by the FTC’s Bureau of Economics that addresses these three areas. We argue
that such research is well worth the agency’s relatively small resource investment because
it demonstrably contributes to more thoughtful policy analysis and better policy out-
Key words: consumer protection, FTC, information, marketing, mergers, retailing
The primary role of the Bureau of Economics is supporting the Federal
Trade Commission’s (FTC) dual missions of promoting competition (anti-
trust) and protecting consumers. On the antitrust front, the past year was
marked by two cases seeking the breakup of consummated mergers,
major investigations of two mergers among branded consumer goods pro-
On the consumer protection side, the FTC battled an assortment
Author for correspondence: Luke Froeb, E-mail: firstname.lastname@example.org
An administrative law judge ruled in favor of the FTC that the acquisition of the
Water Division and the Engineered Construction Division of Pitt-Des Moines Inc. (man-
ufacturers of specialized storage tanks) violated section 7 of the Clayton Act and Section
5 of the Federal Trade Commission Act (see FTC press release, June 27, 2003; the case is
currently under appeal before the FTC). On February 10, 2004, the FTC ﬁled suit chal-
lenging the consummated acquisition of Highland Park Hospital by the Evanston North-
western Healthcare Corporation (both hospitals operate in suburban Chicago). This case
is scheduled to be heard before an administrative law judge in the Fall of 2004.
The cases were Nestle’s 2003 acquisition of Dreyer’s ice cream business (where the
Commission required a divestiture of Dreyer’s super premium ice cream brands and
Nestle’s ice cream distribution business), and the 2004 merger of RJR and Brown and
Williams U.S. cigarette businesses (which was allowed to proceed unchallenged).