AI v. Judge — Episode 3: FTC v. Tapestry, Inc. and Capri Holdings Limited

Economic Concept: Market definition using the Hypothetical Monopolist Test and aggregate diversion ratios in differentiated consumer goods (“The Goldilocks Market”)

Key Takeaways

• The FTC tried to stop a merger between Tapestry (Coach, Kate Spade) and Capri (Michael Kors) worth $8.5 billion by defining a small "accessible luxury" or "Goldilocks" handbag market where the new company would have about 58–59% of the market.

• The FTC's expert used the Hypothetical Monopolist Test, upward pricing pressure , and merger sim…