The Celler-Kefauver Act Explained
The Celler-Kefauver Act was passed in 1950 by the US Congress. The act sought to strengthen antitrust legislation that was associated with the Clayton Antitrust Act. The Celler Kefauver Act expanded the application of anti-merger provisions.
A Little More on the What is the Celler-Kefauver Act
The Celler-Kefauver Act addresses mergers in which a company buys suppliers to guarantee production and shun competition. This is viewed as anti-competitive if the supply to competitors is cut off. This act seeks to regulate mergers that would lead to the creation of monopolies or reduce competition significantly.
The Clayton Act of 1914 had a section that addressed horizontal mergers; but the Celler Kefauver Act added a section to address vertical and conglomerate mergers. However, the Act does not illegalize conglomerate and vertical mergers unless the mergers significantly reduce competition or create monopolies.
It is not easy to classify actions that reduce competition. Vertical mergers streamline production and stabilize supply. As long as there are suppliers in the market to supply other companies, this kind of merger is not illegal. The 1914 act established control over a number of mergers and acquisitions but this was limited to buying of shares in circulation. This way, companies can circumvent this act by buying shares of the target company. The Celler-Kefauver act prevents this circumvention to reinforce antitrust rules in US.
References for Celler-Kefauver Act
Academic Research on the Celler-Kefauver Act
- A Decade of Administration of the Celler–Kefauver Antimerger Act, Handler, M., & Robinson, S. D. (1961). Columbia Law Review, 61(4), 629-679. This study examines the performance of the Celler-Kefauver Act a decade after it is implemented. The study looks specifically at Columbia and how the act has influenced the creation of other acts. It observes that, enforcement of the law started slow but has picked up with both the Federal Trade Commission and the Department of Justice being more involved in enforcing the act into law.
- Quantitative Substantiality and the Celler–Kefauver Act-A Look at the Record, Handler, M. (1955). Mercer L. Rev., 7, 279. This paper examines the performance of the Celler-Kefauver act and whether it is doing what it was created to do. The paper notes that while the act has good sections on merger and acquisitions, it concentrates more on other sections such as education.
- Constructing state autonomy: the federal trade commission and the Celler–Kefauver Act, Luchansky, B., & Gerber, J. (1993). Sociological Perspectives, 36(3), 217-240. This paper examines the role played by state agencies in controlling trade and business. It looks at the passing of the Celler-Kefauver act and how the Federal Trade Commission has expanded its regulatory mandate since the act was passed. The paper goes on to note that FTC acted as a social movement when it defined mergers as social problems. In conclusion, the paper gives more examples where state agencies acted as social movements.
- Notes on the 1984 Merger Guidelines: Clarification of the Policy or Repeal of the Celler–Kefauver Act?, Miller, R. A. (1984). Antitrust Bull., 29, 653. This paper examines the merger guidelines of 1984 and how they affected policies already set by DoJ and other government agencies. It looks at new literature introduced and how it affects the Celler-Kefauver act.
- Celler–Kefauver Act: Sixteen Years of Enforcement, The, Mueller, W. F. (1969). J. Reprints Antitrust L. & Econ., 1, 111. This study examines the enforcement of the Celler-Kefauver act 16 years after its implementation. It studies the involvement of the DoJ and the Federal Trade Commission and how they have helped shape mergers. It also projects the future of the act and what should be done to enforce it better such as concentrating more on mergers than on other sections of the act.
- The Celler–Kefauver Act and the Quest for Market Certainty, Celler, E. (1964). ABAJ, 50, 559. This paper looks at complaints made to the government by Merss Lewyn and Mann in connection to the Celler-Kefauver act and how it is enforced. The two complainants state that their cases have not been heard and there are discrepancies in how the act is enforced. The study analyzes all the complaints and suggestions raised by the two.
- The determinants of aggregate-merger activity—Before and after Celler–Kefauver, Benzing, C. (1991). Review of Industrial Organization, 6(1), 61-72. This paper uses regression analysis in the study of factors that influenced aggregate-merger activities before and after Celler-Kefauver act. It suggests that interest rates positively relate to merger activities before Celler-Kefauver and negatively after Celler-Kefauver. It also notes that the rate of unemployment before Celler-Kefauver was linked to mergers but after Celler-Kefauver, unemployment rates are not related to mergers. It concludes that after the implementation of the Celler-Kefauver, merger activities were efficiently controlled.
- A Decade of the Celler–Kefauver Anti-Merger Act, Steele, C. J. (1960). Vand. L. Rev., 14, 1049. This paper analyzes the failures of the Sherman act of 1890 and the Clayton act of 1914. It notes how the two could not control mergers until a monopoly was realized. It also analyzes the performance of the Celler-Kefauver act ten years as its implementation into law. The paper notes that, the Celler-Kefauver act has streamlined business by regulating mergers.
- Merger Policy and the Celler–Kefauver Act, Hurley, J. J. (1963). Louis ULJ, 8, 379. This study analyzes the enforcement of the Celler-Kefauver act and how the Federal Trade Commission and some courts protects competitors and not competition as the act stipulates. It also examines how policies have been developed to make the act better and regulate mergers better.
- Corporate mergers and the business cycle, Becketti, S. (1986). Economic Review, 71(5), 13-26. This paper looks at the effect of corporate mergers on how business operate. It looks at different mergers, their effects on the economy and how different businesses dominate industries.
- Public policy toward mergers in the dairy processing industry, Mueller, W. F., Hamm, L. G., & Cook, H. L. (1976). North Central regional research publication. This paper looks at the effects of the Celler-Kefauver act on the dairy processing industry. It notes that the act did not prevent industrial reorganizations. It also notes that the policy made the industry more competitive.