Law Antitrust - Instructor: Dwight Drake Boeing/McDonnell Douglas Merger (1997) What was Boeing’s and McDonnell’s market shares? Was McDonnell failing as a company? Were there high barriers to entry? How many other competitors were there? What was the “national champion” argument? Did it work? What was the FTC’s rational for not objecting to the merger? Why did the EC make such dire threats? How did U.S. respond?

Law Antitrust - Instructor: Dwight Drake Non-Horizontal Mergers – per ’84 Guidlines Merger That Eliminates Potential Entrant. Analytical factors include: - Harm to perceived competition – merger eliminates threat of new player. - Harm to potential competition – new potential competition gone. - Actual competition in market – will it be impacted? - Market concentration – the higher, the worse. - Conditions to entry – the higher, the worse. - Merger firm’s entry advantage, if any. - Market share of merger firms. - Efficiencies.

Law Antitrust - Instructor: Dwight Drake Non-Horizontal Mergers – per ’84 Guidlines Vertical Mergers 1. Vertical merger creates objectionable barriers to entry if: (a) Vertical merger requires new entrant must enter both markets, (b) Requirement to enter second market makes entry to primary market much harder or unlikely. (c) Structure of primary market conducive to non-competitive performance. Department unlikely to challenge if HHI under Vertical integration of retail outlets. Department unlikely to challenge unless HHI over 1800 and large percentage of upstream product sold through vertically-integrated retail outlets. Fear is price and output control. 3.Elimination of disruptive, competitive buyer. Department unlikely to challenge unless HHI over 1800 and disruptive firms differs substantially from other firms in the market.

Law Antitrust - Instructor: Dwight Drake Private Standing to Challenge Mergers Brunswick v. Pueblo Bowl-O-Mat, Inc. (1977): To have standing to challenge merger, private party must prove antitrust injury – injury by reason of what antitrust declares unlawful. Injury from competition not antitrust injury. Cargill, Inc. v. Monfort of Colorado, Inc. (1986): 2 nd and 3 rd largest players in meat packing market merge. 5 th largest player sues, alleging merger is anticompetitive because merged entity will be able to use “price-cost” squeeze (buy for more and sell for less) to close out other competitors. Ct. held increase competition from tough price competition not basis for standing to challenge suit. But, if they could prove likelihood of predatory pricing, then may have standing. What was government’s position in the case? What was rationale and basis for dissent? What if a merger is part of a plan to monopolize a market? Would that give a competitor standing to challenge the merger?