Markets and Market Power in Battery Separators: In Re Polypore

Abstract

The FTC's lawsuit against Polypore International, Inc. mainly focused on Polypore's consummated acquisition of Microporous L.P., its only rival in the sale of two types of battery separators and one of its two rivals in the sale of a third type of battery separator. Because this was a consummated acquisition, three types of evidence were available to define markets and analyze competitive effects: 1) structural evidence showing a high market share in an appropriately defined market where there were barriers to entry; 2) pre-acquisition direct evidence of head-to-head competition; and 3) post-acquisition evidence of higher prices or reduced output. This article notes that while all three types of evidence indicated that the merger was anticompetitive, the pre-acquisition and post-acquisition evidence of direct effects was particularly informative in understanding the acquisition's effect on competition.