Mergers & Acquisitions

It seems that everything in America has gone to Hell in a handbasket.

We're way past the incompetence of the Bush administration.

For years I've been questioning the constant mergers and acquisitions of businesses - banks, insurance companies, pharmaceutical companies, media.

The companies say they must grow bigger in order to compete in a global market. My complaint is as they grow and swallow smaller, and sometimes larger, competitors there's less competition and more chance for shenanigans, like price fixing and a reduction of services.

In 1984 the federal government forced AT&T to break into four separate companies because it was thought they were a monopoly and controlling the majority of phone services.

This spawned a host of smaller telecommunications companies and, supposedly, increased competition while lowering prices.

Then the inevitable happened. Cingular bought AT&T wireless. Then AT&T bought Cingular to create the largest wireless service provider in America. Then AT&T bought Bellsouth. Then SBC Communications merged with AT&T. So today, AT&T is close to being a monopoly again.

Is this an isolated incident? Absolutely not!

In 2005 alone, Verizon bought MCI; Sprint bought Nextel; Hewlett Packard bought Peregrine Systems; Adobe bought Macromedia; Symantec joined with Veritas; Computer Associates joined with iLumin; IBM Tivoli bought Collation; Oracle acquired Siebel Systems then took over Peoplesoft then Oracle and Thor Oracle bought Octet Strings.

Not to be outdone, Disney bought Pixar; Rite Aid purchased Eckerd Drug; Bank of New York acquired Mellon Bank; GlaxoSmithKline took over Pfizer who had bought CovX; Liberty Media Corp bought DirectTV and the list goes on.

These companies grew to mega-companies and when some of them crashed it shook up the financial world. Had they stayed small and manageable their collapse would have seemed like a pebble in the ocean instead of like a meteor in a lake.

What usually happens when one company takes over another? Layoffs! Lots of layoffs. Thousands of workers without jobs.

Why hasn't the federal government stopped these mergers and acquisitions? That's the job of the Federal Trade Commission.

The FTC was created in 1914 by president Woodrow Wilson and charged with protecting consumers against anti-competitive practices.

They've actually got a Bureau of Competition charged with elimination or prevention of "anti-competitive" business practices. They review all merger proposals. If that's really true and they approved some of the above mergers and takeovers then it's another example of how incompetent this government is.

When there's only two banks, two insurance companies, two media giants and so on, competition will end, prices will skyrocket, workers will be laid off and the economy will deteriorate further and the United States government will look at what's happening and exclaim, "how sad, but there's nothing we can do."

However, there's something we as citizens can do. Check the link at the left and write your congressperson. Scream, shout, make some noise. If enough of these fools we send to Washington listen perhaps something will be done to curb the abuses in government and provide more oversight. If they do nothing, then vote them out of office. It's as simple as that and we, the people, have the power to do it.