The Past Year in the Economic Analysis Group

This last year has been one of continued growth and accomplishment for the Antitrust Division’s Economic Analysis Group (EAG). We welcomed an impressive new cohort of Ph.D. economists, including Mark Chicu (Northwestern ’13), Alex Gross (UVA ’20), Malika Krishna (NYU Stern ’16), Sam Krumholz (UCSD ’20), and Hal Van Gieson (Yale ’92).

Economic analysis has been important to the Division’s criminal investigations, including its investigation into antitrust conspiracies in the generic pharmaceutical industry. EAG staff has evaluated bidding and pricing behavior to assist prosecutors in their investigations and calculated volume of commerce to assist prosecutors in determining appropriate corporate criminal fines and penalties. In the generics investigation, EAG staff also worked to quantify the loss to victims and the gain to participants in antitrust crimes. This important work led to the first indictment of two generics companies with allegations under the Alternative Fine Statute, which if proven will allow a sentencing court to impose fines in excess of the otherwise-applicable $100 million statutory maximum per count. This marks the first time in a decade—since the Division’s landmark conviction in United States v. AU Optronics, resulting in a $500 million fine—that the Division is proceeding to trial under the Alternative Fine Statute.

EAG also made significant contributions to several of the Division’s higher profile civil matters, both litigated and settled. EAG’s analyses of market definition and nascent competition in two-sided transactions platforms for online debit were central to the Division’s challenge of Visa’s proposed acquisition of Plaid, which was abandoned before trial. The robust merger settlements achieved by the Division in the HPHC/Tufts health insurance merger and the Liberty Latin America/AT&T fiberoptic network merger reflect the empirical evaluations of market definition and competitive effects performed by Division economists.

EAG economists were also vital members of the groups tasked with other first-order priorities for the Division. These included the drafting of the 2020 Vertical Merger Guidelines, a process that involved identifying the primary elements of vertical merger analyses, as informed by the academic literature and experience from applications, to provide guidance and illustrative examples to the antitrust and business communities.