Although the merger of Exxon Corp. and Mobil Corp. is widely expected to clear the final hurdle of US Federal Trade Commission approval at any time, not all observers view the transaction as beneficial. Last week, two consumer groups held a press conference in Washington, DC, to voice their opposition to the merger. Ultraliberal Sen. Paul Wellstone (D-Minn.) appeared on their behalf, saying the oil industry is setting a pattern of consolidations that ultimately will leave only a few "megacompanies."
"If Exxon Mobil were a country, it would have the 18th largest economy in the world," he said. "Time has shown that one merger begets another. If this one is approved, more will follow. FTC needs to consider the danger of concentration of the industry."
Wellstone warned, "If we let the oil industry be whittled down to two or three majors, it will only make it easier for the Organization of Petroleum Exporting Countries to control world oil prices."
Wenonah Hauter of the consumer group Public Citizen said, "Teddy Roosevelt must be turning over in his grave," referring to the former US president who initiated the antitrust movement in the US.
"No one with any knowledge of the history of the oil industry can seriously believe that fewer companies will result in more competition," said Hauter. "The current wave of mergers here and overseas is creating a dangerously small group of super multinational oil companies that will cause havoc for consumers in the future."
She said Exxon's and Mobil's argument that their merger will help them compete with national oil companies "doesn't pass the laugh test." Athan Manuel of the US Public Interest Research Group agreed: "I don't see how Exxon needs help dealing with Saudi Arabia or Venezuela now."
Manuel added, "The proposed mergers set up a lose-lose situation. With less competition, consumers will lose. And the increased political power of these new megacompanies means that democracy and the environment will lose too."
