Ever wondered why competition regulators in both Canada and the
US sometimes put the brakes on M&A deals? As mature markets
become increasingly concentrated while smaller players are bought
out and entities merge to achieve greater economies of scale, we
continue to see headlines featuring the involvement of
competition regulators in M&A transactions. But if we value the
concept of 'free markets,' why are governmental bodies
involving themselves in private transactions?
Adam Smith, one of the earliest proponents of modern capitalism,
was a strong supporter of competition (antitrust) law. In his Inquiry Into the Nature and Causes of the
Wealth of Nations, he wrote, "The Monopolists, by
keeping the market constantly understocked, by never fully
supplying the effectual demand, sell their commodities much above
the natural price, and raise their emoluments, whether they consist
in wages or profit, greatly above their natural rate." As
companies merge and markets become
