Content area
Full Text
INTRODUCTION
On July 1, 1997, the Federal Trade Commission (FTC) closed its investigation of the merger of the Boeing Company (Boeing) and the McDonnell Douglas Corporation (McDonnell Douglas), essentially approving the merger.1 The proposed $14 billion merger2 was quite significant, as it would unite the first and third largest civil aircraft companies in the world.3 Although the proposed merger had passed muster under U.S. antitrust laws, Boeing still faced the obstacle of gaining approval form the European Commission (EC), the antitrust enforcement agency of the European Union (EU). The EC initially sought to reject the merger and to levy heavy penalties on Boeing and McDonnell Douglas if they continued with the planned structure of the merger.4 The EC finally approved the merger of the companies on July 30, 1997,5 but only after Boeing had acceded to major concessions, resulting partly from political pressure from the Clinton Administration.6
The Boeing-McDonnell Douglas merger was a hotly debated matter, which brought the United States and the EU to the brink of a global trade war.7 The merger highlights several important global antitrust issues. For example, the merger demonstrates the approaches pursued by the FTC and the EC in analyzing mergers. The actions of both agencies indicate that factual merger analysis, as well as policy considerations, play vital roles in guiding an agency to its final decision to approve or reject a merger. Perhaps more importantly, however, the Boeing-McDonnell Douglas merger accentuates the problems affecting international companies as they move into the global market. The globalization of business forces companies contemplating mergers to consider the antitrust laws not only of their home countries but also of the countries in which they do business.
This Note draws from experiences gained in the Boeing-McDonnell Douglas merger to explore the prospects of instituting a global antitrust system. Background relevant to the antitrust analysis of the Boeing-McDonnell Douglas merger is set forth in Part II, which discusses generally the aircraft manufacturing industry and the Boeing-McDonnell Douglas merger. Parts III and IV proceed with examinations of the merger in light of the antitrust guidelines used by the FTC and the EC, respectively. In doing so, these Parts discuss not only the pure competition analyses undertaken by both agencies but also the political factors and...