Word: antitrusters
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Dates: during 1960-1969
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...more than a year, while the Justice Department has grown more cautious about pressing antitrust suits and opposing mergers, the Federal Trade Commission has become increasingly aggressive. Last week, in one of its boldest actions yet, the FTC moved to turn a giant into a midget. The commission ordered Maremont Corp. of Chicago, a leader in the automotive-parts field, with sales last year of $186 million, to a Washington hearing next month. The agency's aim is nothing less than to make Maremont sell off 40 companies that accounted for about $100 million of the total...
...company has "disparate power" and a "decisive competitive advantage" in parts rebuilding. Because it both makes and distributes parts, and because its growing distribution network deprives competitors of outlets for their own products, Maremont in the eyes of the bolder FTC is a vertically integrated company that clearly violates antitrust laws. Maybe so, but one defense Maremont might make next month is that there is still some competition somewhere. Earnings were off 37% last year, and Maremont finished the first quarter of the year...
Last week, citing a "growing concern" that too much U.S. business is going into too few big baskets, the FTC announced that it is undertaking a thoroughgoing study of the conglomerate phenomenon. Chief FTC Investigator Harrison Houghton, 56, plans to tackle not only antitrust problems but also such areas as efficiency and profitability of the "multimarket companies"-as the conglomerates like to call themselves...
Zeroing In. The FTC is only the latest agency to zero in on the controversial conglomerates. President Johnson has appointed a group of academic antitrust experts to study and recommend policy toward the companies. The Securities and Exchange Commission is studying their financial reporting techniques. The Justice Department, criticized as being soft on antitrust, recently became acutely aware of the fact that antitrust law has lagged behind the phenomenon of conglomerates...
Horizontal mergers (between competitors) and vertical mergers (between users and suppliers) have long been severely limited by well-established antitrust law. The status of conglomerate mergers, between companies not in direct competition, remains uncertain. Only last May, Justice issued a 27-page merger guideline suggesting that conglomerates would be opposed if, for instance, the merger would prevent two noncompeting partners from entering each other's fields on their own. Thus, this month a federal District Court upheld a key Justice challenge to a merger of Wilson Sporting Goods, a subsidiary of LTV, with a small maker of gymnastic equipment...