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Yeah it seems ridiculous in hindsight. I think what enabled the mergers though was less someone with a brilliant idea that they could just recombine, and more t

Yeah it seems ridiculous in hindsight. I think what enabled the mergers though was less someone with a brilliant idea that they could just recombine, and more the drastic change in the government's conception and enforcement of antcompetitiveness laws. That is, they wouldn't have tried to merge back together if the they didn't think the government might let them. The government can and does does block mergers, still, and it makes sense that that they wouldn't just want to ban a specific company from a specific market share for all eternity.

elliekelly 8y ago
This is the exact issue. The DOJ's Antitrust Criminal Enforcement Division breaks up the companies by making an argument that's then directly contradicted by the DOJ's Merger Enforcement Division's (very outdated) policy on approving mergers. From the Merger Enforcement Guidelines[1] (last updated in 1997): > By definition, non-horizontal mergers involve firms that do not operate in the same market. It necessarily follows that such mergers produce no immediate change in the level of concentration in any relevant market as defined in Section 2 of these Guidelines. The Merger Enforcement Division's assumption may have been true in 1997 but it's difficult to argue that simply because Google and Amazon don't operate in the "same market" as their primary businesses that their combination would "produce no immediate change in the level of concentration" of the market for both online advertising and computing services. Yet, under these guidelines, if a Google + Amazon merger were proposed it wouldn't present any immediate issue for the Antitrust Division to oppose it. [1]https://www.justice.gov/atr/non-horizontal-merger-guidelines https://www.justice.gov/atr/non-horizontal-merger-guidelines
- nickodell 8y ago
  Amazon and Google do operate in several of the same markets. Amazon sells Kindle/Fire devices. Google sells Android phones. Amazon does product search. Google has a product search engine.
  - elliekelly 8y ago
    Antitrust enforcement focuses on the "primary market" of the entities. Google's primary market is advertising and Amazon's primary market is retail products. The DOJ does consider the potential anti-competitive impact on tertiary markets the two entities operate in but it wouldn't be a barrier to the hypothetical merger because those markets have plenty of other competitors.

elliekelly 8y ago

This is the exact issue. The DOJ's Antitrust Criminal Enforcement Division breaks up the companies by making an argument that's then directly contradicted by the DOJ's Merger Enforcement Division's (very outdated) policy on approving mergers. From the Merger Enforcement Guidelines[1] (last updated in 1997): > By definition, non-horizontal mergers involve firms that do not operate in the same market. It necessarily follows that such mergers produce no immediate change in the level of concentration in any relevant market as defined in Section 2 of these Guidelines. The Merger Enforcement Division's assumption may have been true in 1997 but it's difficult to argue that simply because Google and Amazon don't operate in the "same market" as their primary businesses that their combination would "produce no immediate change in the level of concentration" of the market for both online advertising and computing services. Yet, under these guidelines, if a Google + Amazon merger were proposed it wouldn't present any immediate issue for the Antitrust Division to oppose it. [1]https://www.justice.gov/atr/non-horizontal-merger-guidelines https://www.justice.gov/atr/non-horizontal-merger-guidelines

nickodell 8y ago
Amazon and Google do operate in several of the same markets. Amazon sells Kindle/Fire devices. Google sells Android phones. Amazon does product search. Google has a product search engine.
- elliekelly 8y ago
  Antitrust enforcement focuses on the "primary market" of the entities. Google's primary market is advertising and Amazon's primary market is retail products. The DOJ does consider the potential anti-competitive impact on tertiary markets the two entities operate in but it wouldn't be a barrier to the hypothetical merger because those markets have plenty of other competitors.