Question

Which of the following would most likely be scrutinized under the FTC and DOJ Horizontal Merger Guidelines?

Merger A: Two major players in Internet services and retailing–Amazon.com and ebay–merge.

Merger B: Cigarette maker Philip Morris merges with the Miller Brewing Company.

Merger C: Lockheed Martin, a large firm that manufactures aircraft, merges with United States Steel.

Answer 1

Correct answer is Merger A: Two major players in Internet services and retailing–Amazon.com and ebay–merge.

Step-by-step explanation:

Amazon.com and ebay are both internet marketers that sell similar product over the internet. If they merge together, they will both formed a stronger market and this reduces the numbers of firm in the market and thus, competition is reduced. This increases their market power. This type of merger is Horizontal Merger and is scrutinized under the FTC and DOJ Horizontal Merger Guidelines