Chapter 1. Overview of the Applicable U.S. Antitrust Laws

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CHAPTER 1

OVERVIEW OF THE APPLICABLE

U.S. ANTITRUST LAWS

The U.S. antitrust laws seek to preserve competition in the U.S.

economy and to ensure that U.S. consumers continue to enjoy the

benefits of that competition. The antitrust laws are not, however,

designed to protect individual competitors from the “rough and tumble”

of vigorous competition or to thwart business efficiencies that may be

achieved through the combination of two firms’ resources.1 As applied

to mergers and acquisitions, the antitrust laws seek to ensure such

transactions do not create, enhance, or facilitate the exercise of market

power, thereby giving one or more firms the ability “to raise prices above

competitive levels for a significant period of time.”2

A number of federal and state statutes regulate the competitive

effects of mergers and acquisitions.3 The principal federal statute is

1.See Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 488

(1977) (“the antitrust laws . . . were enacted for ‘the protection of

competition, not competitors’”) (quoting Brown Shoe Co. v. United

States, 370 U.S. 294, 320 (1962)); Northeastern Tel. Co. v. AT&T, 651

F.2d 76, 79 (2d Cir. 1981) (“dominant firms, having lawfully acquired

monopoly power, must be allowed to engage in the rough and tumble of

competition”) (citing Berkey Photo, Inc. v. Eastman Kodak Co., 603 F.2d

263 (2d Cir. 1979)).

2.United States v. Long Island Jewish Med. Ctr., 983 F. Supp. 121, 136

(E.D.N.Y. 1997) (quoting United States v. Archer-Daniels-Midland Co.,

866 F.2d 242, 246 (8th Cir. 1988)).

3.The Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act),

15 U.S.C. § 18a, requires the parties to reportable transactions to notify

the Antitrust Division of the U.S. Department of Justice (DOJ or the

Division) and the Federal Trade Commission (FTC or the Commission)

prior to consummating the proposed transaction and to observe the

applicable waiting period. See part C of Chapter 2 for a discussion of the

HSR Act and its administration. Furthermore, various federal statutes are

applicable to mergers and acquisitions involving specific industries. See

part C of Chapter 7 for a discussion of the federal statutes applicable to

the banking, energy, transportation, communications, and newspaper

industries. In addition, the National Cooperative Research and

Production Act of 1993, 15 U.S.C. §§ 4301-06, applies to research and