in a 40 Billion dollar merger deal. If approved by shareholders and regulators, the two companies

together will form the world’s 5th largest food company, owning brands such as Jell-O,

Cracker Barrell, and Weight Watchers. Do mergers like this violate antitrust laws against monopolies?

Well to begin with, let’s take a look at what antitrust laws are and what they’re

meant to protect.

The history of American antitrust laws goes back to the Industrial Revolution. With machines

expediting labor, businesses like Rockefeller's Standard Oil and Carnegie's Steel Company

became so large that they shut out any competition. They were called trusts, back then, but today

we call them “monopolies.” Monopolies can force consumers to pay higher prices,

and make it impossible for other companies to enter the market. Because of their size,

they can hurt the economy and even skirt government regulations.

Something needed to be done. Presidents and other politicians around the turn of the 20th

century were looking to help the American economy, and they recognized the need to regulate

monopolies.

The Sherman Act of 1890 was the first law that made monopolies illegal. In 1914, the

Federal Trade Commission Act, which created the FTC, and the Clayton Act were passed to

further protect consumers and smallest companies. Regulatory policies were installed to outlaw

price gouging and mergers which would hurt competition. Today, all three of these laws

form the foundation of American antitrust laws.

So back to the Heinz-Kraft merger. Both of these companies are already major players

in the food industry, so wouldn’t their integration be bad for competition? Well according

to analysts, the food brands owned by Heinz and Kraft are just diverse enough that they

don’t overlap. They’re not really both in the ketchup game - so there’s no ketchup

monopoly. One is most well known for ketchup, while the other is known for mac and cheese.

Experts think the Heinz-Kraft deal will be scrutinized, but eventually approved by regulatory

agencies. If there is overlap, the FTC can force them to sell off some of their similar

brands before the merge.

When you hear monopoly, you might think of the classic board game by the same name. Although

it might seem strange, this popular game was actually developed as anti-capitalist propaganda.

To learn more, check out this video from Seeker. Thanks for watching TestTube! Please subscribe.