Relevant market definition and SSNIP test under the 2010 US Horizontal Merger Guidelines

The article reviews some of the provisions of the 2010 US Horizontal Merger Guidelines concerning the relevant market definition and the hypothetical monopolist test (SSNIP test). The new Guidelines replace the 1992 Guidelines and adopt the new approach to merger review that the Department of Justice and the Federal Trade Commission (‘Agencies’) apply. They mainly focus on the direct evidence of potential impact of a horizontal merger on competition and thus de-emphasize the role of relevant market analysis. The 2010 Guidelines also change the hypothetical monopolist test, although it remains an important tool used to define relevant market. The hypothetical monopolist test still asks would a hypothetical profit-maximizing firm would impose at least small, but significant and nontransitory increase in price, but it is no longer implemented using the iterative procedure and the 'smallest market principle' is softened. The author analyses whether the courts will accept this new Guidelines’ approach instead of a traditional analysis of market definition, market shares and market concentration. It is noticed that market definition plays a smaller, though still significant role in the merger analysis and that the Agencies and courts will continue to determine a relevant market in the merger review process.