Painful Bargaining: Evidence from Anesthesia Rollups
with Paulo Ramos, Amanda Starc & Thomas G. Wollmann
American Economic Review (Revise & Resubmit, 2026)
A rollup is a series of acquisitions through which a financial sponsor consolidates ownership. Increasingly, this strategy is shaping economically important markets, but historically, it has escaped antitrust enforcement. We study this phenomenon in the anesthesia industry, site of the first rollup-based antitrust case in US history. First, we identify 18 other rollups that are observationally similar to the litigated ones. Next, we show that rollups consolidate ownership and that prices rise sharply as competing practices are acquired. Last, we estimate a structural bargaining model and simulate counterfactual equilibria under remedies that courts are likely to consider.
Rolling Up Labor: Private Equity, Antitrust, and Labor
Yale Law Journal Forum (Forthcoming)
Private equity-backed serial acquisitions, commonly known as “rollups”, now account for a significant share of U.S. M&A and are reshaping major industries, from healthcare to software. While scholars and regulators have increasingly scrutinized the consumer-welfare effects of rollups, the effects on labor have received far less attention. This Essay fills that gap and makes five contributions. First, it identifies fragmentation, local or segmented competition, and human-capital intensity as key features of the labor markets commonly targeted by rollups. These features make rollups profitable for PE firms, but they also leave workers especially vulnerable to consolidation. Second, it shows how rollups can depress wages, worsen working conditions, and facilitate anticompetitive coordination among employers. Third, it explains why labor market-specific features—including noncompetes, no-solicitation agreements, and variation in workers’ relationship with the company—can magnify these harms. Fourth, it identifies doctrinal and practical obstacles that private plaintiffs and government enforcers face under existing antitrust law. Fifth, given the limits of private litigation and ex post remedies, it offers specific recommendations to strengthen ex ante government enforcement.
Can Robinson-Patman Enforcement Be Pro-Consumer?
Business & Finance Law Review (Forthcoming)
Antitrust agencies are once again interested in the Robinson-Patman Act, a dormant Depression Era statute that prohibits discriminatory wholesale pricing. This paper is the first to empirically study retailer market exit caused by discriminatory pricing—a key concern for the Act’s drafters. In doing so, it addresses and refutes the central objection to the Robinson-Patman Act—that the Act protects small retailers at the expense of consumers. The paper employs an economic model to identify three forces that determine consumer welfare effects of discriminatory pricing: heterogeneity in consumer preferences for retailer attributes, wholesaler-retailer bargaining, and retailer exit. The model shows that while chain stores often secure wholesale discounts under discriminatory pricing, this advantage can drive independent stores out of the market, ultimately reducing competition and harming consumers. An empirical analysis of the U.S. liquor sector—currently under FTC investigation—supports these conclusions, showing that discriminatory pricing results in an annual consumer welfare loss of $4.91 per individual, totaling $529 million in a year across the industry. These findings challenge the prevailing arguments in the ongoing legal debate, which often lean toward categorically permitting or prohibiting discriminatory pricing. Instead, this paper recommends a nuanced, case-by-case evaluation of price discrimination, emphasizing the importance of considering the interaction between the three forces.
Are Private Equity Funds Liable for Anticompetitive Acquisitions?
with Paulo Ramos, Amanda Starc & Thomas G. Wollmann
Stanford Journal of Law, Economics & Business (2026)
Private equity acquisitions grew tenfold over the past two decades. Over the same period, their focus shifted from financial engineering to industry consolidation, raising antitrust concerns. Heightening these concerns, privately backed acquisitions of competitors historically escaped detection by federal antitrust authorities in their incipiency. However, academic studies and agency investigations are now unearthing these transactions. Most salient is a recent complaint filed by the Federal Trade Commission challenging a series of acquisitions stretching back ten years. In the wave of litigation that is likely to follow this “landmark” and “groundbreaking” case, a serious problem may arise. Damages, which will accrue over several years and be statutorily tripled, could far exceed what portfolio companies can pay, which will be limited by several factors such as their indebtedness. In these cases, whether victims are made whole depends critically on whether private equity funds are held liable. This paper provides the first evidence that privately backed consolidation extends far beyond what the FTC’s recent lawsuit alleges. Next, it identifies the unique features of these transactions that limit the abilities of portfolio companies to fully compensate the consumers they have overcharged. Finally, it introduces a novel doctrinal framework to determine the liability of private equity funds that finance and direct mergers among rival firms.
Can Machines Commit Crimes Under US Antitrust Laws?
with Thomas G. Wollmann
The University of Chicago Business Law Review (2024)
Generative artificial intelligence is being rapidly deployed for corporate tasks including pricing. Suppose one of these machines communicates with the pricing manager of a competing firm, proposes to collude, receives assent, and raises price. Is this a crime under US antitrust laws, and, if so, who is liable? Based on the observed behavior of the most widely adopted large language model, we argue that this conduct is imminent, would satisfy the requirements for agreement and intent under Section 1 of the Sherman Act, and confer criminal liability to both firms as well as the pricing manager of the competing firm.
Notification and Enforcement of PE-Backed Consolidation
with Thomas G. Wollmann
Antitrust Chronicle (2024)
Acquisitions that were backed by private equity (PE) and escaped antitrust scrutiny in their incipiency face mounting litigation risk. For instance, the FTC recently challenged a series of PE-backed transactions in the anesthesia sector that stretch back more than a decade, amounting to the first “rollup”-based antitrust case in US history. In this paper, we address three main issues about these developments. First, we produce novel empirical evidence that shows PE-backed consolidation extends far beyond the anesthesia industry, which suggests that courts could face a wave of merger litigation. Second, we present an economic model that implies the damages arising from anticompetitive harm will often exceed the portfolio companies’ ability to pay. In these cases, whether plaintiffs are made whole depends on whether the funds that financed and directed these transactions compensate victims. Finally, we introduce a doctrinal framework for assessing the liability of PE funds for anticompetitive acquisitions. Our analysis identifies five distinct theories of liability that draw from antitrust and business organization law.
Misaligned Measures of Control: Private Equity’s Antitrust Loophole
with Thomas G. Wollmann & John M. Barrios
Virginia Law & Business Review (2023)
Agencies and legislators have raised concerns that acquisitions backed by private equity (PE) threaten competition, but few, if any, have offered explanations as to why they pose a unique threat. In this article, we argue that PE-backed acquisitions may avoid antitrust enforcement because they escape detection. Under the Hart-Scott-Rodino Antitrust Improvements Act, parties intending to merge must notify federal authorities and wait for clearance. However, various exemptions exist based on the size of the transaction, parties involved, and proportion of control conferred by the merger. Recent work demonstrates that to police mergers effectively, agencies must be informed about transactions in their incipiency, meaning that in many economically important industries, the contours of the premerger notification program under the Act are, in practice, the same as the contours of the substantive legal standard. We show that when the Act’s exemptions are applied to PE’s standard investment structure, which use an array of intermediate special purpose vehicles to minimize taxes, share risks, and distribute fees, many PE-backed acquisitions that would otherwise be reportable are exempt. We support our argument with merger and filing data.
How Do Commercial Banks Leverage Market Power?
with Jakub Kastl
Working paper
Cluster products are complementary goods that have reduced transaction costs when purchased from a single company. These products are economically important and abundant in markets. A notable example is the commercial banking products. In this particular market, consumers arguably select banks rather than specific banking products, allowing banks to leverage their power in one product market, such as loans, to set rates in another product market, such as deposits. Although the concept of cluster products has roots in seminal Supreme Court decisions from the 1960s, modern regulatory analysis of proposed bank mergers often overlooks this phenomenon. In this paper, we present a structural demand and supply model for loans and deposits that accounts for the complementarity between these commercial banking products. In our model, banks compete in these two product markets by taking into consideration the interplay between the demands for both products. We use our model to predict the impact of actual mergers on deposit and loan rates charged by and market shares of each market participant. Subsequently, we compare these predictions to the rates and shares that were realized after the studied mergers.
When Do Non-Price Vertical Restraints Become Unreasonable?
Working paper
Intrabrand non-price vertical restraints emerge from agreements between upstream and downstream firms and impose conditions on the downstream firm’s resale of products. They are prevalent in the economy, especially in consumer-facing industries. Following the Supreme Court’s 1977 decision in Sylvania, these restrictions have been subject to the rule of reason. In Sylvania, the Court noted that these restraints incentivize downstream firms to invest in product launches and brand promotion. Yet, if one of the main objectives of these restraints is to facilitate brand building and product introduction, a question arises as to whether they should be revisited at some point in the product’s lifecycle. This paper argues that intrabrand non-price vertical restraints should be limited in duration. The initial phase of exclusivity incentivizes downstream firms to invest in new products and brands. But once these products gain recognition and firms recoup their investment, exclusivity starts maintaining prices above competitive levels without offering any countervailing competitive benefits. At this point, these restraints should be found unreasonable. To substantiate this framework, this paper presents both a novel economic model and a new empirical study of the exclusive territory provisions in the ready-to-drink beverage industry. It shows that when third-party distributors violate exclusive territories, prices of both affected and rival products decrease. Additionally, product sales in the affected territories either experience an increase or remain stable, suggesting a lack of significant decline in product quality. However, the breach of the exclusive territories leads to a reduction in product variety, underscoring the significance of these restraints for downstream investment in new products.
