Antitrust Guide to Market Arrangements

Integration

Ownership of assets and legal control over economic activities. Integration is achieved through internal growth, merger, or acquisition of assets

EXAMPLE
The doorskin case concerned vertical integration in the market for interior molded doors. Doorskins are decorative plates for the front and the back of doors. Until 2012, three doorskin manufacturers operated in the United States. They were owned by door manufacturers that vertically integrated door and doorskin manufacturing. Other door manufacturers bought doorskins from these three companies. In 2012, one of the vertically integrated companies acquired the doorskin business of one of its vertically integrated peers. With the consolidation in the doorskin segment, prices of doorskins went up.

Partial Integration
Incomplete ownership of assets or incomplete legal control of economic activities.
EXAMPLE
Ice Cream Shop’s ownership of equity in Big Restaurant gives the Shop control of the Restaurant, although possibly incomplete control (“partial integration”). By contrast, the Shop has complete control of the Ice Cream Van (“complete integration”). Big Firm’s minority holding in the Restaurant might amount to partial integration.
Joint Venture
To the extent that Ice Cream Shop and Big Firm share the governance of Big Restaurant, the Restaurant is a joint venture. Otherwise, Big Firm is merely an investor.
Passive Investment
Incomplete ownership with no governance rights.
Example
Jim sold 20% of his restaurant to Big Restaurant and has retained all governance rights.
Antitrust
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