Mergers

Question 1

Brown Shoe v. U.S.

Answer 1

§ 7 Clayton

Fragmented market, gov’t may block a merger that achieves a very small percentage of market control if there is a POTENTIAL TREND toward concentration.

Need:
1. Proper geographic & product market

2. Probability of future market harm.

Also look at practical indicia

Question 2

U.S. v. Von’s Grocery

Answer 2

Mergers unlawful on failing firm defense.

Extreme example of halting a trend toward concentration in incipiency.

Question 3

U.S. v. General Dynamics

Answer 3

FLAILING FIRM DEFENSE

Market concentration is not the only factor to consider.

Question 4

Brunswick v. Pueblo Bowl-O-Mat

Answer 4

Plaintiff must prove injury of the type that antitrust laws were intended to prevent.

PB would face same result if centers were owned by Brunswick or small owners.

Question 5

Ford Motor Co. v. U.S.

Answer 5

Foreclosure of competitors

Question 6

U.S. v. AT&T

Answer 6

Elimination of Double Marginalization (a single margin is more efficient, cost to producer and consumer decreases)