Industries & Issues: Mergers

Mergers can benefit the economy, allowing firms to reduce costs, improve products and reduce prices. Mergers can also harm competition and consumers by facilitating collusion, creating opportunities for unilateral price increases, reducing incentives to innovate, and creating a market structure that allows the merged firm to exclude or artificially disadvantage rivals or suppliers. Regarding current U.S.merger policy, the AAI believes change to Section 7 of the Clayton Act is not needed if the agencies take a more aggressive approach that recognizes the incipiency nature of the statute, protects potential competition, and consequently challenges a higher proportion of proposed mergers. The agencies should make enforcement of the statute more effective by clarifying the Merger Guidelines and the basis for these guidelines. For an overview of AAI's positions, read the Merger Policy chapter from AAI's report "The Next Antitrust Agenda."