Antitrust Activity Has Little Impact on Small Firms

Study Examines Two Industries Experiencing Small Business Declines

WASHINGTON, July 10 /PRNewswire-USNewswire/ -- Federal antitrust enforcement
has little impact on small firms, according to a study released today by the
Office of Advocacy of the U.S. Small Business Administration.

Researchers examined two industries with significant enforcement activity in
recent years, retail groceries and timber. They determined that in the retail
grocery business small firms did not benefit in markets where the Federal
Trade Commission (FTC) required divestiture to offset post-merger
concentration. They also found that the decline in small Pacific Northwest
sawmills was due in large part to macroeconomic factors and efficiency gains
of the vertically integrated dominant firm.

"Federal antitrust policy has always centered on protecting competition as a
whole, and not small competitors," said Dr. Chad Moutray, Chief Economist for
the Office of Advocacy. "As the report's case studies make clear, vigorous
FTC enforcement of antitrust legislation may not necessarily be helpful for
small competitors in affected geographic areas."

Written by Innovation & Information Consultants with funding from the Office
of Advocacy, Analyzing the Impact of Antitrust Laws and Enforcement on Small
Business analyzes the impact of antitrust activity in the retail grocery and
timber industries. Among the report's conclusions:

-- In many markets investigated, small retail groceries declined in both
number and market share, regardless of whether there was FTC antitrust
enforcement activity.

-- The entry of mass merchandisers and efficiency of large supermarkets
contributed more to the closure of small groceries than increased market
concentration due to mergers.

-- Anticompetitive behavior by a dominant vertically integrated timber
industry firm contributed to a decline in small Pacific Northwest timber
firms; however, macroeconomic factors were equally important in the reduction
of small firms.

The Office of Advocacy, the "small business watchdog" of the federal
government, examines the role and status of small business in the economy and
independently represents the views of small business to federal agencies,
Congress, and the President. It is the source for small business statistics
presented in user-friendly formats, and it funds research into small business
issues.

For more information and a complete copy of the report, visit the Office of
Advocacy website at www.sba.gov/advo.

The Office of Advocacy of the U.S. Small Business Administration (SBA) is an
independent voice for small business within the federal government. The
presidentially appointed Chief Counsel for Advocacy advances the views,
concerns, and interests of small business before Congress, the White House,
federal agencies, federal courts, and state policy makers. For more
information, visit www.sba.gov/advo, or call (202) 205-6533.

SOURCE Office of Advocacy of the U.S. Small Business Administration

John McDowell of Office of Advocacy of the U.S. Small Business Administration,
+1-202-205-6941, john.mcdowell@sba.gov