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How could the merger of two large phone companies cause them to come into conflict with...

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granny54 | Student, College Freshman | Valedictorian

Posted August 15, 2013 at 7:39 AM via web

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How could the merger of two large phone companies cause them to come into conflict with federal Anti-Trust legislation? 

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farouk23 | College Teacher | (Level 1) Associate Educator

Posted August 15, 2013 at 10:47 AM (Answer #1)

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There are a number of ways for the companies to come into conflict with Anti-Trust legislation, which could include:

  1. Being seen to stifle competition
  2. Price fixing
  3. Not adequately disclosing the details of the merger
  4. Attempt to restrict trade
  5. Creating a market monopoly

Of all the possibilities outlined above, the creation of a situation whereby the merged companies control too much of the market share in a specific geographical area or the country, is the one most likely to put them in violation of the law. Such situation will be seen as a creation of a market monopoly and most likely would result in the proposed merger not being approved in the first place. 

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