Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Gelfand delineates proper steps for economists in merger analysis presentations, (Jun 8, 2016)

By Jody Coultas, J.D.

Deputy Assistant Attorney General for the Department of Justice David Gelfand discussed the role of economics in antitrust enforcement yesterday at the economic consulting firm Bates White’s antitrust conference. As the conference was focused on merger enforcement, Gelfand’s speech concerned the role of economics in antitrust enforcement and outlined seven steps for presenting evidence before the Justice Department.

Gelfand noted that he has seen economists predict price increases in transactions, model competitive effects for commodity products where price is determined by output decisions of suppliers, and show how mergers can give parties increased bargaining leverage.

When presenting economic evidence to the Division, the main audience is the DOJ economists, Gelfand said. "[I]f our economists are not convinced, it is extremely unlikely that the legal team will second guess them on the economic work." When presenting to the lawyers at the agency, he suggested that economists explain the nature of the work in simple terms. The agency needs to understand the intuition behind the work and the basis for the results. If the science is to be influential with lawyers who make enforcement decisions and with courts, there needs to be sources to which the Justice Department can turn, written professionally by respected experts in the field, that provide clear explanations. Finally, candor and credibility in presenting economic evidence was key.

Gelfand continued that economists should give the Justice Department information it needs to test and verify your economic work and the time to do the work. "[U]se lots of charts and pictures when presenting to lawyers," he advised. "Text slides, not so much." Recognize that the farther you stray from known methods of studying markets, the more skeptical the Department of Justice will be about the methodology. Finally, economic evidence is best viewed as a complement to the other evidence in a case, not as a substitute for it, Gelfand observed.

In closing, the official stated that there is endless work to be done to invent newer and better tools to study markets, including developing consensus around the things that work and the things that don’t and figuring out how to help the agencies and the courts make good decisions.

News: AcquisitionsMergers Antitrust