When a company considers the acquisition of or merger with another company, the companies must be aware of the possibility that the new, combined company might dominate the market, preventing competition, or that the changed market structure will encourage collusion among the remaining competitors.
The concern is with a competitive market. Without major competitors, consumers pay increased prices. If there is a monopoly, there will be less competition to drive prices down to levels favorable to consumers.
A merger may diminish competition by enabling firms to engage in coordinated interaction that harms consumers. Coordinated interaction occurs when a group of firms make decisions that are profitable for each of them only as a result of the accommodating reactions of the others. This behavior includes implied or express collusion and may or may not be in violation of law.
A merger may diminish competition even if it does not lead to coordinated interaction, because merging firms may find it profitable to change their behavior unilaterally following the acquisition, often by raising prices and keeping output to a minimum.
If you face allegations that you have violated an antitrust statute, immediate legal counsel should be sought. Violations of U.S. antitrust law are serious offenses carrying both civil and criminal penalties. Speaking with the proper lawyer will inform you of your legal rights as well as preserve any possible remedies you may have. If you believe another business violated the antitrust acts and harmed you or your company, you should speak to a lawyer who can properly review your case.
Last Modified: 10-27-2011 04:24 PM PDTLaw Library Disclaimer
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