Courts have permitted two or more small companies to merge without liability under Section 7,if the merger allows them to compete more effectively with a large company.

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This statement is true. Under Section 7 of the Clayton Antitrust Act, courts may allow otherwise anticompetitive mergers if the merger enhances competition by allowing small businesses to better compete with larger companies in the industry. This is known as the "failing firm defense." However, the burden of proof is high for companies seeking to use this defense, and the merger must still be evaluated for potential anticompetitive effects.

Courts Have Permitted Two or More Small Companies to Merge