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Crucial areas of antitrust in the United States have undergone tectonic shifts in the past 30 or 40 years. Views of strategic pricing, vertical restraints, monopoly practices, and mergers that dominated policy until the 1960s have been transformed, resulting in approval of firm conduct and market structures that would have been unthinkable some years earlier. While the extremes of past practice have few advocates, some observers have expressed concern that the transformation may have gone too far and tipped the balance in favor of policy that is too permissive. Of course, it is not easy to get the balance right. Individual cases differ, evidence varies in quality, and alternative explanations abound; hence, some policy errors are inevitable. It is, on the other hand, easy to get the balance wrong, and in this article I will provide some evidence that recent policy in the area of merger control has gotten that balance wrong. The specific issue is the role of market structure in merger review, and the balance in question concerns errors of omission versus commission.

The proper role for market structure in merger review usually devolves to the familiar debate over what is called the "structural presumption." This term is shorthand for the belief that mergers beyond certain concentration and/or share thresholds are, with high probability, likely to be anticompetitive, and hence enforcement by the agencies and courts can rely on those thresholds for predicting anticompetitive outcomes from such mergers. Of course, few doubt that structural conditions make some difference to pricing and other market outcomes, and few advocates would go so far as to make the presumption completely irrefutable. Much of the debate has therefore centered on the question of how accurately structural characteristics of a market predict competitive outcomes and hence how much reliance...