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Richard Gilbert, Jul 12, 2008
The U.S. Federal Trade Commission alleged adverse effects on innovation in about forty percent of all merger challenges between 1996 and mid-2008. The percentage was much higher for challenges in industries with unusually high research and development intensity, such as pharmaceuticals (excluding generics), chemicals, software, instruments, high-tech manufacturing, defense, and aerospace. The FTC challenged sixty-three proposed mergers or acquisitions in these industries and alleged adverse innovation effects in fifty-seven cases, or about ninety percent of the challenged transactions. The percentage of merger challenges in R&D-intensive industries that alleged adverse effects on innovation has been high throughout the past decade.