Which of the following type of merger goes against the antitrust policy?
A) A horizontal merger
B) A vertical merger
C) A cash purchase
D) A stock-for-stock exchange

Question

Quizplus · Accepted Answer

A horizontal merger involves the combination of firms that are direct competitors, and therefore can give rise to anticompetitive effects such as higher prices, reduced quality, and a decrease in consumer choice. Such mergers typically go against antitrust policy and may be challenged by regulatory bodies such as the Federal Trade Commission (FTC) or the Department of Justice (DOJ). Vertical mergers, on the other hand, involve the combination of firms at different stages of the production process and may not necessarily pose a threat to competition. Cash purchases and stock-for-stock exchanges are methods of payment for mergers and do not themselves directly affect antitrust policy.

Which of the Following Type of Merger Goes Against the Antitrust