October 19, 2016

Antitrust: “Decline in Innovation” as Competitive Harm

This Cooley blog notes that the FTC & DOJ are increasingly challenging mergers on the theory that they may harm innovation. Here’s an excerpt:

Most recently, Lam and KLA-Tencor abandoned their proposed $10.6 billion merger which would have combined a manufacturer of machines used to inspect circuitry on computer chips and the largest maker of machines that etch away materials on silicon wafers used to make computer chips in the face of DOJ pressure. DOJ said in a press release that the proposed transaction presented “concerns about the ability of the merged firm to foreclose competitors’ development of leading edge fabrication tools and process technology on a timely basis.”

Potential loss of innovation was also a major focus of the DOJ in its lawsuit challenging the $34 billion Halliburton-Baker Hughes merger, which the companies ultimately abandoned.

John Jenkins