History
In 1982 the U.S. Department of Justice Merger Guidelines introduced the SSNIP test as a new method for defining markets and for measuring market power directly. In the EU it was used for the first time in the Nestlé/Perrier case in 1992 and has been officially recognized by the European Commission in its "Commission's Notice for the Definition of the Relevant Market" in 1997.
The original concept is believed to have been proposed first in 1959 by economist Morris Adelman of the Massachusetts Institute of Technology. Several other individuals formulated, apparently independently, similar conceptual approaches during the 1970s. The SSNIP approach was implemented by F. M. Scherer in three antitrust cases: in a 1972 Justice Department attempt to enjoin the merger of Associated Brewing Co. and G. W. Heileman Co., in 1975 during hearings on the U.S. government's monopolization case against IBM, and in a 1981 proceeding precipitated by Marathon Oil Company's effort to avert takeover by Mobil Oil Corporation. Scherer also proposed the basic concept underlying SSNIP along with limitations posed by what has come to be known as "the cellophane fallacy" in the second (1980) edition of his industrial organization textbook. Historical retrospectives suggest that early proponents were unaware of other individuals' conceptual proposals.
Read more about this topic: Small But Significant And Non-transitory Increase In Price
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