ABSTRACT
This chapter begins with a historical overview of antitrust policy to address the potential efficiency problems associated with mergers. It examines antitrust policy toward mergers. The Department of Justice filed an antitrust suit to prevent the merger on the grounds that the merger would significantly reduce competition. Despite the General Dynamics and Waste Management decisions, horizontal mergers remain an area in which the antitrust laws hold some punch. For some time, however, economists, antitrust authorities, and the courts have recognized that vertical mergers are less likely to have anticompetitive effects than horizontal mergers. Functionally, joint ventures have been treated as mergers under the antitrust laws because the two firms combine to engage in a joint activity exactly as they would if they merged. In August 2010 the Department of Justice’s Antitrust Division and the Federal Trade Commission jointly issued revised horizontal merger guidelines.
