The Importance Of Containation In A Regulated Industry

Publicly traded companies are subject to the reporting and disclosure requirements of the Securities Exchange Commission (SEC). The laws that govern the securities industry were established to provide transparency to investors, creditors and shareholders alike. According to Hoyle, Schaefer & Doupnik, (2015) there are seven major disclosure requirements, the first being a five-year summary of operations to encompass sales, assets, income from continuing operations. Followed by a description of business activities, a three year summary of industry segments to include foreign and domestic operations, a list of company directors and executives, quarterly market price of common stock for the last two years, restrictions on the company’s ability to continue paying dividends, and finally, an analysis of the company’s financial condition, changes in the conditions and results of operation.

The Securities and Exchange Commission has the mission of protecting investors by maintaining fair, orderly and efficient markets. The SEC does this in a number of ways, and firms need to pay attention to these ways in order to ensure SEC compliance. The SEC has enforcement authority over a number of areas related to the nation's capital markets, including insider trading, accounting fraud, and providing false information. The SEC's jurisdiction extends to all securities that are traded publicly. Privately-held companies do not need to register with the SEC (SEC.gov, 2012).

From the liberal point of view, the FTC and the EC should recognize the Boeing-McDonnell Douglas merger as an international issue, not a national issue, so that it should restrain autonomy of state, in this case the U.S., preventing from intervention to protect domestic interests. However, in the case of Boeing-Mc Donnell Douglas, both antitrust authorities, specifically the European Commission, acted in a protectionist manner keeping domestic interests. In a study on 290 proposed acquisitions screened by the EC during 1990, it was found that although European merger and acquisition regulators claim to be protecting competition and consumers, in fact, the more harm suffered by European rival firms when the acquire is coming from the outside the EU, the greater the likelihood of European regulatory intervention against the proposed merger or acquisition . The EC’s focus on competitors rather than consumers was revealed by this study.

Monopolies and oligopolies often use anti-competitive practices, which can have a negative impact on the economy. This is why company mergers are often examined closely by government regulators to avoid reducing competition in an industry.

To prevent substantial lessening and dominance of competition, the CCA prohibits mergers when that would have the effect, or be likely to have the effect. One of the main ways in which mergers can lessen competition in through unilateral effects. The unilateral effects which means the merged firms’ unilateral market power is increased and it leads to remove or weaken competition. In determining whether unilateral effects arise and whether they are to lessen the competition, the ACCC considers all of the merger functions under in s50

The role of antitrust laws has been the subject of numerous publications that have attempted to provide a precise set of reasons and inspirations for their creation. However, there are still many schools of thought on the subject and much debate over the effectiveness and legitimate implementation of these laws. This paper analyzes the three main antitrust laws that the federal branch of the United States government uses to try to restrict monopolies. This paper also looks at antitrust laws in the modern business environment, and attempts to relay the information in a manner that a newcomer to the subject will understand the concept as it relates to modern technology and business practices. The findings of this paper indicate that the topic of antitrust laws is more complex than many believe and, depending on the position of the person affected by monopolies, the sentiment ranges widely.

One law, which helps protect businesses and promotes fair competition for the benefit of the consumers, is the US Anti-Trust law. This law is comprised of three different acts: The Sherman Act 1890, the Clayton Act 1914 and the Federal Trade Commission Act 1914. The first role these acts perform is to restrict the formation of cartels which would perform outside of the guidelines of the government and there for not be bound by there laws. The second role these acts perform is to ensure no single business entity can perform a certain level of mergers and acquisitions, which would essentially turn them into a monopoly and reduce competition. Overall, the antitrust laws are constantly debated for their overall functionality and efficiency in protecting the fair business practices of the United States. [2] “One view, mostly closely associated with the "Chicago School of economics" suggests that antitrust laws should focus solely on the benefits to consumers and overall efficiency, while a broad range of

6. In an era of global competition, what is the case for antitrust authorities to permit the formation of large domestic firms through mergers and acquisitions?

Companies do not have the freedom to merge and acquire as they please do. All have to meet the requirements and essentially be approved by regulatory bodies. In the context of regulations, antitrust laws and security laws are commonly referred to by regulator to determine whether a merger or acquisition should be allowed or rejected. Antitrust laws prohibit mergers and acquisitions that impede competition. The point is very simple where antitrust is referred to as competition. The goal is to increase competition because more competition in economics means that consumers get more at a fairer or lower price. Anytime a regulator believes that a merger or acquisition will make an industry or market less competitive, the business transaction might

It is necessary for a firm to expand in order to gain profits or leverage in a market place. One of the ways firms can do this is by executing a merger. There are two types of mergers, horizontal and vertical mergers. There are many incentives for companies to perform either type of merger; however, both types of mergers will always raise suspicion when being executed because they are usually perceived as anticompetitive. In order to prevent an anticompetitive environment, our government established a federal agency called the Federal Trade Commission. Their job is to review the activity of any given firm and decide whether or not to allow them to continue. Presently, CVS and Etna are currently undergoing a vertical merger to gain profits and

(a) In a merger agreement, the assets and liabilities of the firm which is being acquired end up being absorbed by the buyers firm. A merger could be the most effective and efficient way to enter a new market without the need of creating

The first problem derive from the flexibility that the IOSCO disclosure standards unequivocally grant to the securities regulators of the host country in a cross-border share offering. These standards cogitate that the core disclosure document will undertake "a minimum of tailoring to fit national requirements. (68) But the extent of national tailoring allowed under those standards could be extensive. The IOSCO standards specifically recognized that additional disclosure by foreign issuers will sometimes be essential in certain host countries because of local custom

Lessening competition and rising prices have led many people to question when government regulators will intervene if at all. During the past few years regulators have been scrutinized for their lack of involvement. In the recent past multiple large mega-mergers have been approved even though these type of mergers have and continue to lead to freedom to charge whatever those companies want to (Soergel). Antitrust laws work to regulate these markets and keep them from turning into full fledge monopolies. The Sherman Act was established in 1890 and made it illegal to restrict interstate trade by any means and outlawed attempting to monopolize. The Clayton Act which was established in 1914 outlawed

The General Electric (GE) and Honeywell International (HI) case illustrates the complexities of structuring mergers and acquisitions when the combined firms are capable of exerting market influence that threatens the competitive landscape. While General Electric's CEO, Jack Welch, characterized the deal as, "This is the cleanest deal you'll ever see," European anti-trust regulators were not so inclined to view the transaction as harmless to competition (Elliot, 2001).

Other Political factors involve the tight regulations many countries place on mergers and acquisitions and monopolistic behaviour. In the last 10 years the alcohol industry has seen an unprecedented consolidation as the largest firms try to identify the most profitable segments of the fastest growing and most profitable new markets. This often leads to infringements with national regulations about competition and market monopoly, resulting in the sale having to be approved by a government agency.