Super Sweet Soda is engaged in the soft-drink bottling and distribution industry

Question

Super Sweet Soda is engaged in the soft-drink bottling and distribution industry in the states of New York and New Jersey. The firm currently has about 40 percent of the market for these products and related services. Carbonate Distribution Corporation competes with Super Sweet Soda in the same states. Carbonate has about 35 percent of the market. If Super Sweet Soda were to acquire the stock and assets of Carbonate through a horizontal merger, would Super Sweet Soda be in violation of any of the antitrust laws? If so, which one? Discuss fully.

Explanation / Answer

Yes they would definetly be in violation of the antitrust laws. They would be violation of the Federal law known as the Clayton Act, which specifically prohibits these kind of mergers from happening. This is because such a market environment would create a market as they would aquire more than 50% of the market in their sector. Under the Clayton Act courts have the power to stop these sort of business affairs or mergers from ever occuring and perhaps even fine them a substantial amount for these illegal practices. These fines can go as high as $100 million for corporations in our case.

Since these companies also deal within New York then they would also be in violation of the Donnelly Act , sections 340-347, which specifically prohibits these kind of monopolies of the market. The penalties for corporations in our case can go as high as $1,000,000.

Hope this helped.

If you need more info feel free to see the link below.

http://www.ag.ny.gov/antitrust/antitrust-enforcement

Good luck.

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