IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/123063.html
   My bibliography  Save this paper

Should conditions regarding non-discrimination be imposed in vertical mergers? The Surface Transportation Board on the acquisition of the Kansas City Southern Railway by the Canadian Pacific

Author

Listed:
  • Pittman, Russell

Abstract

In its 2023 decision approving the acquisition of the Kansas City Southern Railway by the Canadian Pacific, the U.S. Surface Transportation Board conditioned its approval on the merged railway’s commitment “to keep gateways open on commercially reasonable terms” – that is, to allow shippers and non-merging railroads to continue to enjoy the option of using joint-line service, despite the merger’s creation of the alternative of single-line service on the merged railroad. A century has passed since the Board’s predecessor agency, the Interstate Commerce Commission, first imposed a condition of the maintenance of open gateways as a condition for approving a rail merger. This paper asks three questions. First, exactly what, in practice, are open gateways? Second, how have the two regulatory agencies dealt with the inherent tension between maintaining open gateways and achieving merger efficiencies? Third, what is the current state of play?

Suggested Citation

  • Pittman, Russell, 2024. "Should conditions regarding non-discrimination be imposed in vertical mergers? The Surface Transportation Board on the acquisition of the Kansas City Southern Railway by the Canadian Pacific," MPRA Paper 123063, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:123063
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/123063/1/MPRA_paper_123063.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Fiona Scott Morton, 1997. "The Strategic Response by Pharmaceutical Firms to the Medicaid Most-Favored-Customer Rules," RAND Journal of Economics, The RAND Corporation, vol. 28(2), pages 269-290, Summer.
    2. Joseph J. Spengler, 1950. "Vertical Integration and Antitrust Policy," Journal of Political Economy, University of Chicago Press, vol. 58(4), pages 347-347.
    3. Williamson, Oliver E, 1971. "The Vertical Integration of Production: Market Failure Considerations," American Economic Review, American Economic Association, vol. 61(2), pages 112-123, May.
    4. Carl Shapiro, 2021. "Vertical Mergers and Input Foreclosure Lessons from the AT&T/Time Warner Case," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 59(2), pages 303-341, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tarsalewska, Monika, 2015. "The timing of mergers along the production chain, capital structure, and risk dynamics," Journal of Banking & Finance, Elsevier, vol. 57(C), pages 51-64.
    2. Sexton, Richard J., 1991. "Game Theory: A Review With Applications To Vertical Control In Agricultural Markets," Working Papers 225865, University of California, Davis, Department of Agricultural and Resource Economics.
    3. Francine Lafontaine & Margaret Slade, 2007. "Vertical Integration and Firm Boundaries: The Evidence," Journal of Economic Literature, American Economic Association, vol. 45(3), pages 629-685, September.
    4. repec:bla:jecsur:v:12:y:1998:i:4:p:333-59 is not listed on IDEAS
    5. G. Rossini & L. Vici, 2007. "Vertical integration, disintegration and ability to export," Working Papers 592, Dipartimento Scienze Economiche, Universita' di Bologna.
    6. In Kyung Kim & Vladyslav Nora, 2020. "Does vertical integration enhance non-price efficiency? Evidence from the movie theater industry," Review of Economic Design, Springer;Society for Economic Design, vol. 24(3), pages 143-170, December.
    7. Federico M. Accursi & Raúl Bajo-Buenestado & Raul Bajo-Buenestado, 2024. "Do Cooperatives Exercise Market Power? Evidence from Pass-Through to Retail Prices," CESifo Working Paper Series 11473, CESifo.
    8. L. Lambertini & G. Rossini, 2003. "Vertical Integration and Differentiation in an Oligopoly with Process Innovating R&D," Working Papers 468, Dipartimento Scienze Economiche, Universita' di Bologna.
    9. G. Rossini, 2004. "Vertical integration in a stochastic framework and a nonsymmetric bargaining equilibrium," Working Papers 527, Dipartimento Scienze Economiche, Universita' di Bologna.
    10. Michele Moretto & Gianpaolo Rossini, 2008. "Vertical Integration and Operational Flexibility," Working Papers 2008.37, Fondazione Eni Enrico Mattei.
    11. Javier D. Donna & Pedro Pereira, 2024. "Structural Presumptions for Non-horizontal Mergers in the 2023 Merger Guidelines: A Primer and a Path Forward," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 65(1), pages 303-345, August.
    12. R. Antonietti & D. Antonioli, 2007. "Production offshoring and the skill composition of Italian manufacturing firms A quasi-experimental analysis," Working Papers 593, Dipartimento Scienze Economiche, Universita' di Bologna.
    13. G. Rossini, 2005. "Pitfalls in private and social incentives of vertical crossborder outsourcing," Working Papers 536, Dipartimento Scienze Economiche, Universita' di Bologna.
    14. Jain, Amit, 2011. "Connaissance, ressources, concurrence et les frontières de l'entreprise," Economics Thesis from University Paris Dauphine, Paris Dauphine University, number 123456789/6403 edited by Thiétart, Raymond-Alain.
    15. G. Rossini & L. Lambertini, 2003. "Endogeneous outsourcing and vertical integration with process R&D," Working Papers 487, Dipartimento Scienze Economiche, Universita' di Bologna.
    16. Livio Cricelli & Massimo Mastaldi & Nathan Levialdi, 1999. "Vertical Integration in International Telecommunication System," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 14(4), pages 337-353, June.
    17. Desai, Vijay S., 1996. "Interactions between members of a marketing-production channel under seasonal demand," European Journal of Operational Research, Elsevier, vol. 90(1), pages 115-141, April.
    18. Brunekreeft, Gert, 2001. "Regulation and third-party discrimination in vertically related markets: The case of German electricity," Discussion Papers 74 [rev.], University of Freiburg, Institute for Transport Economics and Regional Policy.
    19. Limin Su & Yongchao Cao & Wenjuan Zhang, 2023. "Low-Carbon Supply Chain Operation Decisions and Coordination Strategies Considering the Consumers’ Preferences," Sustainability, MDPI, vol. 15(14), pages 1-20, July.
    20. Greer, Monica L., 2008. "A test of vertical economies for non-vertically integrated firms: The case of rural electric cooperatives," Energy Economics, Elsevier, vol. 30(3), pages 679-687, May.
    21. Donna, Javier D. & Pereira, Pedro & Trindade, Andre & Yoshida, Renan C., 2020. "Direct-to-Consumer Sales by Manufacturers and Bargaining," MPRA Paper 105773, University Library of Munich, Germany.

    More about this item

    Keywords

    freight railways; regulation; vertical mergers; nondiscrimination conditions;
    All these keywords.

    JEL classification:

    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:123063. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.