Skip to main content
Article
Department Stores On Sale: An Antitrust Quandary
Georgia State University Law Review (2010)
  • Mark D Bauer, Stetson University College of Law
Abstract

In 2005, Macy’s bought its largest competitor, May Department Stores, for $17 billion. The resulting combination created a department store behemoth with over one thousand stores across the United States. Despite protests by the attorneys general of a number of states, and consumers and advocacy groups around the country, the Federal Trade Commission (“FTC”) blessed this merger without requiring any modification in its terms. And according to law and economics scholars, this merger had no substantive impact on consumers, competition or consumer welfare.

My empirical research, published in an earlier law review article, showed that Macy’s now charges consumers 13% more than it did before the merger, and was featured in a page one New York Times article. My empirical research, however, was an observation. This article tells the heart of a very compelling story behind that empirical research and critically analyzes important legal questions. Department stores are an important part of the fabric of American life. For example, more than two years after Macy’s changed the name of all Marshall Field’s stores in Chicago, people are still picketing the store – in fact they led a large protest at Macy’s most recent annual stock holder’s meeting. Barely a day goes by without a major newspaper featuring a story on the plight of American department stores and consumer angst over these destructive changes.

The FTC, which investigated Macy’s acquisition of May, may have erred. This article explains the relevant history of department stores, analyzes the FTC’s flawed investigation of the deal, and critiques the narrowly applied law and economics analysis that led to these incorrect conclusions.

Keywords
  • Antitrust,
  • Department Stores,
  • Law and Economics,
  • Macy's
Publication Date
2010
Citation Information
Mark D Bauer. "Department Stores On Sale: An Antitrust Quandary" Georgia State University Law Review Vol. 26 (2010)
Available at: http://works.bepress.com/mark_bauer/4/