Review of Industrial Organization 23: 95–119, 2003.
© 2003 Kluwer Academic Publishers. Printed in the Netherlands.
Selected Economic Analysis at the Antitrust
Division: The Year in Review
DAVID S. SIBLEY and KEN HEYER
950 Pennsylvania Avenue, N.W. Washington, DC 20530, U.S.A.
(E-mails: David.Sibley@usdoj.gov; Ken.Heyer@usdoj.gov)
Abstract. Of the many activities of the Antitrust Division of the U.S. Department of Justice, we
have summarized some that raise interesting economic issues. We describe recent improvements in
the methodology to be used in “coordinated effects” analysis of mergers. We also discuss four cases
brought by the DOJ that raise issues of market deﬁnition, the inﬂuence of common partial ownership
of competitors, and the effects of fringe suppliers in constraining collusion by large ﬁrms.
Key words: Antitrust, mergers, collusion, coordinated effects, unilateral effects.
This paper describes some of the economic issues that have been encountered by
the Antitrust Division of the U.S. Department of Justice during the last year or so.
It follows a paper by Katz (2002) published earlier in this journal that described
and discussed the economics of Division activities during the preceding year.
In employing economic analysis to antitrust issues the Division and its Eco-
nomic Analysis Group are often faced with real world fact patterns for which
the economics literature provides only limited guidance and no clear or deﬁnitive
road map for obtaining the correct answers. We describe in this paper some of
the economic issues, particularly those relating to the potential coordinated effects
implications of mergers, that are currently a focus of attention by both economists
and attorneys at the Division. In addition, we present some applications of the
Division’s economic analysis in several recent cases.
The Division has conducted a number of major methodological projects over
the past year. In coordination with the Federal Trade Commission (FTC), the
Division conducted a series of public hearings on competition and intellectual
Deputy Assistant Attorney General for Economics, U.S. Department of Justice, Antitrust Di-
vision and Economics Director of Enforcement, U.S. Department of Justice, Antitrust Division.
This paper does not draw on any conﬁdential materials or information. The views expressed are
solely those of the authors and do not necessarily represent the views of the U.S. Department of
Justice. The authors are grateful to Andrew Dick, Norman Familant, Mark Botti, and Jeff Prisbrey for
helpful comments and suggestions. Thanks also to Christina Akers for cheerfully entering numerous
corrections and tracking down wayward citations. All errors remain the responsibility of the authors.