FTC v. Western Meat Co.
272 U.S. 554 (1926)

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U.S. Supreme Court

FTC v. Western Meat Co., 272 U.S. 554 (1926)

Federal Trade Commission v. Western Meat Company

Nos. 96, 213, 231

Argued October 25, 26, 1926

Decided November 23, 1926.

272 U.S. 554

Syllabus

Section 7 of the Clayton Act, October 15, 1914, forbids corporations engaged in interstate commerce to acquire stock of other corporations so engaged where the effect may be substantially to lessen competition between them or to restrain such commerce or tend to create a monopoly in it. Section 11 authorizes the Federal Trade Commission to enforce this, as respects corporations other than common carriers, banks and trust companies, and empowers it to order a corporation found violating it to "cease and desist from such violations, and divest itself of the stock held," etc.

Held,

1. When a corporation has unlawfully acquired all the stock of a competitor, but not its plant or other property, the order properly directs it to divest itself of the stock ownership in such wise as will restore competition, and not leave the corporation in control of the competitor's property, as would happen if it first used the stock to secure such control and then divested itself of the stock by dissolving the other corporation. P. 272 U. S. 557.

2. But where a corporation unlawfully buys its competitor's stock and through it acquires the competitor's property, before the Commission takes action, the Commission is not empowered by the statute to order the corporation to divest itself of the property,

Page 272 U. S. 555

but the remedy, if an unlawful status has resulted, is in the courts under the Sherman Act. Pp. 272 U. S. 560-561.

4 F.2d 223 modified and affirmed.

5 F.2d 615 affirmed in part, reversed in part.

8 F.2d 595 reversed.

Certiorari ( 268 U.S. 685; 269 U.S. 546; 269 U.S. 548) to review decrees of the circuit court of appeals in proceedings taken in that court under the Federal Trade Commission and Clayton Acts.

No. 96 was a petition by the Western Meat Company to review an order of the Commission requiring the company to divest itself of stock of a competing corporation. The Commission's order was affirmed with modification, and the decree is here affirmed with the modification eliminated.

No. 213 was a petition by the Commission to the court below to enforce a similar order against Thatcher Manufacturing Company. The decree of the court below is here reversed insofar as it sustained the order.

No. 231 was a petition by Swift & Company to review a similar order. The decree of the court below sustaining the order is here reversed.

Page 272 U. S. 556

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