Abstract:
The failing company defense allows a competitor to acquire a firm that is facing grave financial difficulties even if the acquisition will reduce competition. This defense is generally tolerated as an antitrust law anomaly that sacrifices economic goals. Professor Campbell argues that it can be shown that the failing company defense is consistent with economic efficiency, within the range of the data in the reported cases. Campbell formulates a test that identifies cases in which the failing company defense could reduce economic welfare, and thus suggests that the defense should not be a per se absolute defense.