Attorney General William French Smith defended the Reagan administration's antitrust and merger policies yesterday, saying that although the administration believes "bigness is not necessarily badness," antitrust officials have not shied away from attacking several big mergers.
"If you examine the decisions of the past year, you will find that the Justice Department has moved very aggressively against a number of mergers, large and small, that presented a threat to competition in economically identifiable markets," Smith told several hundred antitrust lawyers in an American Bar Association meeting.
For example, Smith said, Justice allowed the DuPont-Conoco merger to proceed only after requiring that DuPont buy out another chemical company's interest in a chemical refinery jointly owned with Conoco.
Additionally, Smith noted, Justice challenged an acquisition in the cigar industry and has signed a consent decree to prevent "unacceptable increases in industry concentration."
"Challenging anticompetitive mergers remained an important part of our enforcement program" last year, Smith said, adding that it will continue to play an important role, especially with the release of new merger guidelines now being developed by the department's antitrust division.
However, he added, the division will focus only on mergers between firms in the same line of business. Mergers between sharply different types of companies "have ceased to be a major enforcement focus of the division."
New merger guidelines are necessary because developments in the courts, in economics, and in the Department have rendered the old (1968) guidelines obsolete, Smith said.
The antitrust divison had hoped to unveil the guidelines at the ABA meeting this week, but Justice officials now say the guidelines are at least five to six weeks away. Sources indicate that there are serious disagreements among division officials about the specifics of the policy.
Nonetheless, Smith unveiled a general outline of the merger policy, which appears to hinge on complex economic formulas.
The policy will set up a mathematic formula to determine the concentration of a market based on the number of companies and their market shares.
Until the specifics of the formula are unveiled, it is difficult to determine the new policy's possible effects.
Several antitrust lawyers indicated that the formula now being contemplated appears to allow greater concentration without fear of antitrust challenges.