The Potential Impact of Industrial Deconcentration and Some Related Questions About Current Antitrust Activity in the Milk Industry

Abstract

Industrial deconcentration or restructuring refers to the break up or diffusion of large firms in markets with high concentration. The idea of carving up large companies into two or more separate entities is not new. A number of prominent economists, including Stigler, Kaysen and Turner, and Mueller, have argued persuasively for just such an action. Since passage of the Sherman Act, the courts, while generally reluctant to perform surgery on large firms, have ordered corporate split-ups in at least 26 cases. Some of the early orders were quite drastic, including the division of Standard Oil of New Jersey into 33 parts, the break up of American Tobacco into 16 pieces, the splitting of DuPont into three separate powder manufacturing firms. With the exception of the Pullman and Paramount cases in the 1940's, both of which are of interest because they involved vertical as well as horizontal dimensions of market power, more recent divestitures have been mild.