Model Herfindahl-Hirschman Index (HHI) concentration, cross-tier vertical foreclosure, and Stigler cartel coordination risks under the DOJ/FTC 2023 Merger Guidelines and Jonathan Kanter's enforcement doctrines.
Under Jonathan Kanter's doctrine, vertical deals that grant a dominant platform the power or incentive to starve rivals of non-replicable AI inputs trigger structural challenges.
Evaluates conditions under which tacit coordination or slow-walk cartel agreements can survive without active detection in high-capital AI infrastructure.
Adopted under Jonathan Kanter and Lina Khan, the 2023 guidelines reinstated a stricter 1,800 HHI threshold for highly concentrated markets (down from 2,500 in 2010) and established that transactions increasing HHI by more than 100 points in concentrated markets create a structural presumption of illegality.
Traditional antitrust treated vertical agreements as inherently pro-competitive efficiencies. Kanter's enforcement modernized this: when an upstream bottleneck (such as premier AI accelerator clusters or power interconnects) is locked behind exclusive tie-ins, downstream rivals face input starvation or margin squeezes.
High fixed compute costs, centralized wafer allocations, and transparent cloud pricing create classic Stigler conditions for tacit collusion. When top players coordinate to slow down release cycles or pace capacity rollouts, innovation pace is restricted without formal smoking-gun communications.