Is the consolidation unlawful under a rule of reason analysis?
Under the rule of reason, we evaluate whether the consolidation will have a net anticompetitive effect. We weigh the potential anticompetitive consequences of the consolidation in light of its procompetitive potential. In undertaking this analysis, we examine the nature and purpose of the proposal, the markets in which the parties compete, and any collateral agreements. We are assuming that each of the consolidated services constitutes a relevant product market and that Marin County is a relevant geographic market for each product.(3) It is our understanding that Marin and Ross operate the only adult inpatient mental health facilities in that market and are competitors in these assumed markets. The participation of the only two competitors in a market in the joint production of their competing product clearly creates the opportunity to collude explicitly or tacitly on prices. In addition, while, as discussed above, the pooling of revenues from County-run programs and the Medicare progr
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