nd taxes that inhibit smaller firms. So, no doubt, do Reagan administration hints of "leniency" on conglomerate mergers (but not on "horizontal mergers"). The exact reasons are not so important here. The important point is that the market is a decentralized, voluntarist information and decision making process in which people grapple with uncertainty in pursuit of their well-being. To interfere with this in the name of protecting the people is the cruelest hypocrisy. Vertical MergerThe term Vertical Merger is defined as a merger that integrates the operation of a supplier and a customer. A vertical merger may be the result of a company wanting to spread its product line, or it may be that a company has a desire to increase its marketing area. When dealing with vertical mergers there are very stringent guidelines that must be followed and reporting that must be met. The Federal Trade Commission, in 1976, enacted rules pursuant to the Hart-Scott-Rodino Antitrust Improvement Act. These rules require certain firms to notify the Federal Trade Commission as well as the Justice Department if a merger is proposed. This act gives the Federal Trade Commission as well as the Justice Department time to investigate any merger it finds to be anticompetitive. The merging parties must file the notification and then wait 30 days before proceeding. During the 30 day waiting period the government may sue and the case is entitled to accelerated treatment in the courts.With vertical mergers there are two different types of mergers that may take place. The first is a backward merger and the second a forward merger. An example of a backward merger may be a company that produces paint to purchase a chemical company that supplies to paint manufacturers. If this sale would cause the chemical company to no longer conduct business with other paint manufactures, the sale would be considered anticompetitive and the merger would be stopped.An example of a fo...
