The Clayton Act Anti-Merger Provisions


Finally, a broad review of 113 years of antitrust jurisprudence would not be complete without a brief discussion of what became Section 7 of the Clayton Act (adopted in 1914), 15 U.S.C.A. § 18, the Anti-Merger provision. While trends in antitrust enforcement of § 7 have evolved along with trends in industrial organization economics, the principal focus has been on its prophylactic purpose. Section 7 authorizes attacks on mergers (principally mergers of competitors) which are likely to have an adverse effect on competition. A full-blown anticompetitive effect need not be demonstrated. The focus is on the relevant product and geographic market. The Court asks, is the likely effect of the merger anticompetitive in some product line in some area of the country? To determine whether it is likely to be anticompetitive, courts (or the FTC or the Antitrust Division of the Department of Justice) ask: Will the combined company be able to raise prices for their combined products above existing competitive prices or will they, as a combined power, be able to exclude other competitors from the market for those products. An affirmative answer to either question is likely to result in a challenge to the merger. Obviously, a determination of the scope of the relevant market and the likelihood of an adverse effect are issues that require economic, legal, and sometimes marketing expertise because courts want to know what the effects are on the purchasers of the goods or services sold by the combined entity.




Inside the Minds Stuff - Inside the Minds. Winning Antitrust Strategies
Inside the Minds Stuff - Inside the Minds. Winning Antitrust Strategies
ISBN: N/A
EAN: N/A
Year: 2004
Pages: 102

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