Overview of the Applicable U.S. Antitrust Laws

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CHAPTER I

OVERVIEW OF THE APPLICABLE

U.S. ANTITRUST LAWS

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.1As applied to mergers

and acquisitions, the antitrust laws seek to ensure that 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

Several federal and state statutes regulate the competitive effects of

mergers and acquisitions.3The principal federal statute is Section 7 of

1. SeeBrunswick 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, 370U.S. 294, 320 (1962)); Northeast Tel. Co. v. AT&T Co.,

651F.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 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)); see alsoUnited States v. Oracle

Corp., 331 F. Supp. 2d 1098, 1110 (N.D. Cal. 2004) (“[s]ubstantial

competitive harm is likely to result if a merger creates or enhances

‘market power’”).

3. Seepart C of Chapter II for a discussion of the HSR Act and its

administration. Furthermore, various federal statutes are applicable to

mergers and acquisitions involving specific industries. Seeparts C and D

of Chapter VII 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. §§4301-4306, applies to research and

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