Mergers and Acquisitions: Do They Hinder Competition?

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This Economic Issue of the Day discusses the basic concepts of mergers and acquisitions as well as their advantages and disadvantages to the economy, in general. While mergers do not necessarily harm market competition, this paper calls for firms to abide by fair competition laws and regulations, particularly the new Philippine Competition Act, which provides the guidelines on competition-related activities. It likewise argues that these business activities can be good or bad depending on the extent to which they are likely to create substantial changes in the market structure and the probable impact on consumer welfare.