Union Pacific and Norfolk Southern are bringing out the Dream Team.
The railroads reached into academia to gather a quartet of former government anti-trust experts in an effort to refute the latest filing by red state Attorneys General urging regulators to reject the proposed merger that would create the first U.S. transcontinental freight railroad.
In a nine-page filing submitted Wednesday to the Surface Transportation Board that read like a legal brief complete with citations, the experts cautioned that merger complaints stand as conjecture – and not proof. They offered case histories and academic research supporting previous corporate tie-ups that were also contested on anti-trust grounds, and how opponents use the courts to hinder mergers.
The filing this week by the top law enforcement officials from seven Republican states said that the merger of UP (NYSE: UNP) and NS (NYSE: NSC) won’t enhance competition as required by STB rules, and will raise costs for shippers and consumers.
The experts writing for UP-NS are Alden Abbott, general counsel of the Federal Trade Commission from 2018-2021, now at George Mason University; Tad Lipsky, Jr., deputy assistant attorney general in the Department of Justice Antitrust Division from 1981–1983 and chief antitrust lawyer at Coca-Cola from 1992–2002, also at George Mason, as is Gregory Werden, former DOJ Antitrust Division economist and lawyer; and Mark Whitener, former global executive counsel for competition law and policy for General Electric and deputy director of the Federal Trade Commission’s Bureau of Competition from 1993–1997, now affiliated with Georgetown University.
The hundreds of filings for and against the merger carry no legal weight; STB Chairman Patrick Fuchs has made it clear that the deal will stand on its own merits as evaluated by his agency. Fuchs earlier assembled his own team of data scientists from MIT to break down the numbers, and has fiercely defended the STB’s independence and decision-making process.
The experts also cited case history showing how opponents of mergers are inherently incentivized to protect their own interests, and not necessarily those of the consumer.
“Railroad competitors are not disinterested observers of this transaction; they are commercial rivals that presumably stand to lose traffic if the merged UP–NS offers a superior service product,” they wrote. “Their opposition should be understood as advocacy by market participants to protect their bottom line – not as objective evidence of likely harm to shippers or the competitive process.
“[S]ingle-line integration,” they said, “can create a lower-cost, more efficient service that intensifies overall modal rivalry.”
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Read more articles by Stuart Chirls here.
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