In a not altogether surprising move, the U.S. Justice Department has reversed its initial opposition to Anheuser-Busch InBev’s proposed US$20.1 billion play to fully control Mexico’s Grupo Modelo, the maker of Corona (“la cerveza mas fina”); in January, Justice sued AB InBev to stop it from buying the rest of Grupo Modelo, a company in which it already carries a 50% stake.
It may seem rather late in the game for this, but the Justice Department now appears to recognize that at least some firms are legitimately attempting to prepare for a global market several times larger than any that has heretofore existed. In this breathtakingly obvious context, competition regulators appear poised to acknowledge that mergers do not inevitably create destructive monopolies. The operative word is inevitably, as in categorically.
This is a nod not only to improved economic forecasting methods (which have been around for quite some time already) but also, and more importantly, evidence-based competition law and policy (if it works for baseball, why not competition law?). Though eschewed in many other contexts, categorical per se legal rules needlessly constrain competition law and policy in the United States and Canada. For example, the per se prohibitions of the pass-on defence and a cause of action for indirect purchasers who have suffered antitrust injuries set out by the United States Supreme Court in Hanover Shoe (1968) and Illinois Brick (1977), respectively, are cases in point. Those categorical rules were predicated on exaggerated methodological difficulties and the Court’s subsequent refusal to consider case-by-case exceptions where the evidence allowed supracompetitive overcharges to be traced through various levels of a given distribution chain. Which, of course, did not stop counsel north of the border from faithfully rehearsing these exaggerated and anachronistic arguments before the Supreme Court of Canada last fall in the trilogy of cases raising the availability of the pass-on defence and indirect purchaser standing in competition law (here, here, and here).
But I digress.
The Grupo Model merger awaits approval from the Mexican regulators (one can only guess at how Corona’s latest ad campaign will swing their vote).
And it is this that gestures toward the real emerging context of competition law, where different legal systems and normative frameworks are poised to collide. China’s National People’s Congress approved its first antimonopoly law in 2008; India’s version went into effect in 2009. Relatively “hollow” norms capable of assuming different values based on actual empirical evidence will be better suited to transnational regulatory coordination and policy-making than categorical per se rules that are normatively “thick” and incapable of flexible application.