US merger control rests on four strong cornerstones. The first is section 7 of the Clayton Act, as amended by the Celler-Kefauver Act in 1950, which created the substantial lessening of competition standard as the test for the legality of mergers and acquisitions. The second is the Supreme Court’s 1962 decision in Philadelphia National Bank, which relied on the structure-conduct-performance paradigm from industrial organisation economics to fashion a presumption that mergers that significantly increase concentration in already concentrated industries will lessen competition, imposing on the parties the burden of rebutting the government’s structural case. The third is the Hart-Scott-Rodino Antitrust Improvements Act of 1976, which introduced the concept of pre-merger notification, to give the agencies an opportunity to review major transactions before they are consummated. The fourth, and final, cornerstone was the publication by the Justice Department in 1982 of a completely new set of Merger Guidelines, which have been refined over time and which set forth the basic analytical framework the agencies use to evaluate mergers.
Antitrust and Trade Regulation
Date of this Version
William Kolasky, "US Merger Review: A ‘Goldilocksian’ Perspective" (July 2005). Wilmer Cutler Pickering Hale and Dorr Antitrust Series. Working Paper 14.