The Antitrust Division of the Department of Justice carefully scrutinizes mergers. Why?

Mergers can lead to an increase in market power, which can lead to the abuses of that power discussed in the text. In a market in which concentration is high and/or entry is difficult (the market is not contestable), a merger can have adverse consequences for buyers of the good or service. Under these conditions, the Department of Justice will often oppose a merger. Guidelines that indicate whether the Department of Justice is (or is not) likely to seek to block a merger were loosened in announcements in 1982, 1984, and 1991, compared to original guidelines dating from 1968 . Although mergers can have public benefits (such as permitting economies of scale or scope, or "synergism" when two firms bring special skills or resources together, or permit a reduction in risk), critics have pointed out that not all mergers actually have the expected benefits. To the extent that a merger may affect economic well-being, government should pay attention to merger activity.