As unprecedented waves of mergers wash over the country, the question is whether they will act more like a tsunami, swamping consumers, or more like the tide that lifts all boats. The current merger mania is setting records for the number of companies joining forces and for the size of the resulting combinations. For the year that ended Oct. 31, the number was up to 4,700.
Economists say no.
Only the merger's effect on competition matters, under U.S. law. Bigger does not always equate with driving competition from the market. General Motors, for example, is one of the largest employers in the country. But it faces plenty of competition from within the United States and from abroad, leaving it little power single-handedly to raise prices and otherwise control the market. A two-bit ice cream vendor, though, may not be a conglomerate, but he could charge just about anything he wants if no one else is plying the beach on a hot day.