Antitrust Vertical Merger~

Recently, federal regulators responsible for enforcing the antitrustlaws have shown a renewed interest in the potential anticompeti-tive effects of vertical mergers--mergers between two indepen-dent firms in successive stages of production. For example, the U.S. Department of Justice has intervened in a series of vertical merger cases involving communications. In three cases, the acquisition of McCaw Communications by AT&T, the partial acquisition of MCI by British Telecommunications, and the merger between Liberty Media and Tele-Communications Inc., the Justice Department obtained consent decrees altering the outcomes. This greater activism in vertical merger cases is in striking contrast to the permissive policies that prevailed throughout the 1980s, which, in turn, were a response to the Justice Department’s and the Federal Trade Commission’s open hostility to vertical mergers during the 1960s and the early 1970so The cyclical antitrust treatment of vertical mergers over the past three and one-half decades has been strongly influenced by the theoret