And why are they not actually enforced?

Every time I turn around another "merger and acquisition" takes place.

Are they just ignoring the law, and gubbermint lets it happen?

What?

There was just a huuuuuuuuuge decision yesterday, AT&T with Time Warner. DOJ litigated it for months, and lost.

Anti trust is a very complex area of the law and is constantly evolving.

Anti-trust does not mean "no mergers".

There are a couple of enacted bits of legislation (Robinson Patman, e.g.) and a bunch of case about what makes a proposed merger objectionable in terms of tending to create an illegal monopoly. Most mergers are OK, as they should be. Getting bigger isn't necessarily a bad thing - Google 'economies of scale'.

The USG can shake down merger participants to get approvals voluntarily ("We won't approve the merger unless you do X, Y and Z") but can only prevent mergers if their decision to withhold approval holds up in court.

Unlike hassling individuals, when the USG wants to oppress a corporation, the may find corporations can afford as many attorneys as the bureaucrats.

quote:

Anti-trust does not mean "no mergers".

I know, but what about all these huge banking, or oil industry, mergers. Or phone companies?

I cannot see a situation wherein those mergers * acquisitions will not lead to collusion/price fixing, etc.

I had an econ professor in college that said the only way to maintain free and fair trade within an industry was to assure hard competition within that industry.

quote:

Originally posted by Elk Hunter:

quote:

Anti-trust does not mean "no mergers".

I know, but what about all these huge banking, or oil industry, mergers. Or phone companies?

I cannot see a situation wherein those mergers * acquisitions will not lead to collusion/price fixing, etc.

I had an econ professor in college that said the only way to maintain free and fair trade within an industry was to assure hard competition within that industry.

Interestingly enough, anti-trust laws are the reason there is little or no competition in ISP's or cable television.

The courts have ruled that if 2 companies are competing against each other in a market that they generally cannot merge because that merger would supposedly decrease competition.

In reality, what happens is if Comcast is already in a market, AT&T or other large companies will not enter that market because they may want to acquire or merge with the other company at some point and won't be able to if they are directly competing with them.

So the anti-trust laws actually encourage LESS competition and more mergers.

Free, competitive markets are the holy grail - economics says they are more efficient, participants can succeed or fail based solely on what they do, and customers get to choose who wins.

What happens in practice is that once you set up a power-base of bureaucrats with the make-or-break power over markets, they tend to use that power. And large companies, having already figured out how to survive under that regulatory regime, have a huge advantage over new entrants, who might trigger some hidden red-line and get the Feds all over them.

So, the very existence of a supposedly 'pro-competition' power structure in the government inhibits entrance to the market by new players, and helps entrench established companies from facing competition.

Kind of a Catch-22.

Do we want the government out of the regulation business or not? I mostly don't want the government saying who can and cannot merge.

The ATT/Time Warner merger was not blocked because ATT and Time Warner is a vertical merger. They don't compete with each other much. Time Warner makes content and ATT distributes it. The court decided it isn't a prohibited merger because of that non-competition.

What other recent merger are you concerned about?

Just as an example, even if Shell wanted to merge with Exxon, there are several other huge oil companies. Even thought Shexxon would be very large, BP, Mobil, Diamond Shamrock, and others would still be out there to compete. It probably wouldn't be blocked.

Verizon is next.

quote:

Originally posted by Graniteguy:
Verizon is next.

Or Comcast and 20th Century Fox

quote:

Originally posted by jhe888:
Just as an example, even if Shell wanted to merge with Exxon, there are several other huge oil companies. Even thought Shexxon would be very large, BP, Mobil, Diamond Shamrock, and others would still be out there to compete. It probably wouldn't be blocked.

Exxon & Mobil merged in 1999.

quote:

Originally posted by 1967Goat:

quote:

Originally posted by jhe888:
Just as an example, even if Shell wanted to merge with Exxon, there are several other huge oil companies. Even thought Shexxon would be very large, BP, Mobil, Diamond Shamrock, and others would still be out there to compete. It probably wouldn't be blocked.

Exxon & Mobil merged in 1999.

True enough. I was making a point. Which you have helped make.

If UPS and FedEx merged, would you call them FedUp?

quote:

Originally posted by jhe888:
Just as an example, even if Shell wanted to merge with Exxon, there are several other huge oil companies. Even thought Shexxon would be very large, BP, Mobil, Diamond Shamrock, and others would still be out there to compete. It probably wouldn't be blocked.

Oil is a great example of how complex anti-trust laws have become due to globalization.

If there were to be a merger of two supermajors like Shell and ExxonMobil (i.e. large international companies operating on multiple continents) in the oil & gas industry. You'll have at least the European Union and the US' FTC looking at the competitive impacts of the merger. They'll look at it in whole and also in regions.

As an example of a regional look, the Exxon and Mobil merger considered the impact of both companies having a refinery in California and required the sale of the refinery in San Francisco for the merger to be approved. For a Shexxon merger they'd look at Shell's 50% in Deer Park and Exxon's 100% in Baytown for Houston market, and then Shell's 50% in Port Arthur and Exxon's 100% in Beaumont for the Golden Triangle market. Likely, they'll look at Houston and Golden Triangle together as well.

Three examples of looking at a merger in whole:

They'll (EU and FTC) look at the percent of total combined refining capacity. In other words, if the two supermajors were merged how many percent of total US refining capacity is it and is it a monopoly.

They'll (EU and FTC) look at the percentage of refined products marketing in a manner similar to above bullet.

They'll (EU and FTC) look at worldwide crude oil reserves. This would be next to impossible for a publicly traded company as the growing dominance of the national oil companies the past 2 decades. 8 of the 10 countries with the largest proven oil reserves in the world have a national oil company. Even if they partner with a publicly traded oil company for developing a field they almost always take 50% or more, and they're getting less and less dependent on publicly traded oil companies.

---

Ego is the anesthesia that deadens the pain of stupidity

DISCLAIMER: These are the author's own personal views and do not represent the views of the author's employer.

Sirus & XM seems to be an example.
Since they merged there is no competition for that type of service. I just got a bill for $228.00 to renew for a the next year. Way too much to spend for my truck that MIGHT get used once a week for local errands.


Looks like I will be getting my cds back out.

quote:

Originally posted by gjgalligan:
Sirus & XM seems to be an example.
Since they merged there is no competition for that type of service. I just got a bill for $228.00 to renew for a the next year. Way too much to spend for my truck that MIGHT get used once a week for local errands.


Looks like I will be getting my cds back out.

Let it lapse then they'll send better and better offers. Initially, I'd received an offer of $29.xx for 5 months, but last week I received an offer from them for $59.86 for a year.

quote:

Originally posted by tatortodd:

quote:

Originally posted by gjgalligan:
Sirus & XM seems to be an example.
Since they merged there is no competition for that type of service. I just got a bill for $228.00 to renew for a the next year. Way too much to spend for my truck that MIGHT get used once a week for local errands.


Looks like I will be getting my cds back out.

Let it lapse then they'll send better and better offers. Initially, I'd received an offer of $29.xx for 5 months, but last week I received an offer from them for $59.86 for a year.

Just call them and ask for a better deal. You'll get a much lower price. Half that.

It's funny, large scale commerce (ocean shipping) has been protected by limited anti-trust immunity for the longest time. Here's a JOC article discussing the desire to change that. When I was working for APL two decades ago as an outside sales rep this used to drive me nuts. At one point we were a premium service provider (trying to sell a premium service at a higher cost) but we'd be in shipping alliances with competitors trying to steal our business. To top it off, you'd work your ass off trying to build relationships with clients, improve their supply chain and then your executives would sit down and discuss rate increases with our competition. Basically destroyed any individual integrity you had.

The pacific import trade in particular sucked. Everyone smaller than Walmart would have to wait until what the carriers decided they'd try to force on them as a general rate increase (GRI). Your customers (say Hallmark) would essentially be on hold. Service contracts changed some of this but in reality everyone knew what was happening. One of the reasons why when I went back and finished my MIS degree I told myself I'd never work for a carrier again.

Anyhow, I'm not sure why it still exists today. Personally I think it's a sham.