In 1958, Pabst Brewing Company, the country's tenth largest
brewer, acquired Blatz Brewing Company, the eighteenth largest,
thus becoming the fifth largest with 4.49% of the total industry
sales. The Government brought this action charging that the
acquisition violated § 7 of the Clayton Act because its effect "may
be substantially to lessen competition" in the production and sale
of beer in the United States, in Wisconsin, and in the three-state
area comprising Wisconsin, Illinois and Michigan. The Government
introduced evidence to establish a marked decline in the number of
brewers and a sharp rise in the share of the market controlled by
the leading brewers, both prior to and following this merger. It
also showed that the combined share of the two companies in
Wisconsin in 1957 was 23.95%, and in the three-state area was
11.32%. At the close of the Government's case, the District Court
dismissed the case, finding that the Government had not shown that
Wisconsin or the three-state area as a relevant geographic market
within which the probable effect of the acquisition should be
tested, and had not shown that the merger might substantially
lessen competition in the continental United States, the only
relevant geographic market.
Held:
1. By the language of the Act, the Government must only prove
that the effect of the merger may be substantially to lessen
competition in any line of commerce "in any section of the
country." Pp.
384 U. S.
548-550.
(a) A violation of § 7 would be proved by evidence showing that
competition may be substantially lessened throughout the country or
only in one or more sections of the Nation, and failure to prove a
relevant "economic" or "geographic" market is not an adequate
ground for dismissal. P.
384 U. S.
549.
(b) Proof of the section of the country where the
anticompetitive effect exists is entirely subsidiary to the crucial
§ 7 question, which is whether the merger may substantially lessen
competition anywhere in the country. Pp.
384 U. S.
549-550.
Page 384 U. S. 547
2. The evidence as to the probable effect of the merger of these
to large corporations, in an industry which is rapidly becoming
more concentrated, on competition in Wisconsin, in the three-state
area, and in the entire country, was ample to show a violation of §
7 in all these areas. Pp.
384 U. S.
550-552.
3. The Act is concerned with arresting concentration of the
economy, whatever its cause, in its incipiency, and the Government
has no duty to show that the trend towards concentration in the
beer industry is due to mergers. Pp.
384 U. S.
552-553.
233 F.
Supp. 475, reversed and remanded.
MR. JUSTICE BLACK delivered the opinion of the Court.
In 1958, Pabst Brewing Company, the Nation's tenth largest
brewer, acquired the Blatz Brewing Company, the eighteenth largest.
In 1959, the Government brought this action charging that the
acquisition violated § 7 of the Clayton Act as amended by the
Celler-Kefauver Anti-Merger amendment. [
Footnote 1] That section makes it unlawful for one
corporation engaged in commerce to acquire the stock or assets of
another
"where in any line of commerce in
any section of the
country, the effect of such acquisition may be substantially to
lessen competition, or to tend to create a monopoly."
(Emphasis supplied.) The Government's complaint charged that
"The effect of this
Page 384 U. S. 548
acquisition may be substantially to lessen competition or to
tend to create a monopoly in the production and sale of beer in the
United States and in various sections thereof, including the State
of Wisconsin and the three state area encompassing Wisconsin,
Illinois and Michigan. . . . [
Footnote 2]"
At the close of the Government's case, the District Court
dismissed the case under Rule 41(b) of the Fed.Rules Civ.Proc.,
holding that the Government's proof had not shown that either
Wisconsin or the three-state area of Wisconsin or the and Illinois
was a "relevant geographic market within which the probable effect
of the acquisition of Blatz by Pabst should be tested." The
District Court also ruled that the Government had not shown
that
"the effect of the acquisition . . . may be substantially to
lessen competition or to tend to create a monopoly in the beer
industry in the continental United States, the only relevant
geographic market."
233 F.
Supp. 475, 481, 488.
I
We first take up the court's dismissal based on its conclusion
that the Government failed to prove either Wisconsin or the
three-state area constituted "a relevant section of the country
within the meaning of Section 7."
Page 384 U. S. 549
Apparently the District Court thought that, in order to show a
violation of § 7, it was essential for the Government to show a
"relevant geographic market" in the same way the
corpus
delicti must be proved to establish a crime. But when the
Government brings an action under § 7, it must, according to the
language of the statute, prove no more than that there has been a
merger between two corporations engaged in commerce and that the
effect of the merger may be substantially to lessen competition or
tend to create a monopoly in any line of commerce "
in any
section of the country." (Emphasis supplied.) The language of
this section requires merely that the Government prove the merger
may have a substantial anticompetitive effect somewhere in the
United States -- "in any section" of the United States. This phrase
does not call for the delineation of a "section of the country" by
metes and bounds as a surveyor would lay off a plot of ground.
[
Footnote 3] The Government may
introduce evidence which shows that, as a result of a merger,
competition may be substantially lessened throughout the country,
or, on the other hand, it may prove that competition may be
substantially lessened only in one or more sections of the country.
In either event, a violation of § 7 would be proved. Certainly the
failure of the Government to prove by an army of expert witnesses
what constitutes a relevant "economic" or "geographic" market is
not an adequate ground on which to dismiss a § 7 case.
Compare
United States v. Continental Can Co., 378 U.
S. 441,
378 U. S. 458.
Congress did not seem to be troubled about the exact spot where
competition might be lessened; it simply intended to outlaw mergers
which threatened competition in any or all parts of the country.
Proof of the section of the country where the anticompetitive
effect exists is
Page 384 U. S. 550
entirely subsidiary to the crucial question in this and every §
7 case which is whether a merger may substantially lessen
competition anywhere in the United States.
II
The Government's evidence, consisting of documents, statistics,
official records, depositions, and affidavits by witnesses, related
principally to the competitive position of Pabst and Blatz in the
beer industry throughout the Nation, in the three-state area of
Wisconsin, Illinois, and Michigan, and in the State of Wisconsin.
The record in this case, including admissions by Pabst in its
formal answer to the Government's complaint, the evidence
introduced by the Government, the findings of fact and opinion of
the District Judge, shows among others the following facts. In
1958, the year of the merger, Pabst was the tenth largest brewer in
the Nation and Blatz ranked eighteenth. The merger made Pabst the
Nation's fifth largest brewer with 4.49% of the industry's total
sales. By 1961, three years after the merger, Pabst had increased
its share of the beer market to 5.83% and had become the third
largest brewer in the country. In the State of Wisconsin, before
the merger, Blatz was the leading seller of beer and Pabst ranked
fourth. The merger made Pabst the largest seller in the State, with
23.95% of all the sales made there. By 1961, Pabst's share of the
market had increased to 27.41%. This merger took place in an
industry marked by a steady trend toward economic concentration.
According to the District Court, the number of breweries operating
in the United States declined from 714 in 1934 to 229 in 1961, and
the total number of different competitors selling beer has fallen
from 206 in 1957 to 162 in 1961. In Wisconsin, the number of
companies selling beer has declined from 77 in 1955 to 54 in 1961.
At the same time, the number
Page 384 U. S. 551
of competitors in the industry were becoming fewer and fewer,
the leading brewers were increasing their shares of sales. Between
1957 and 1961, the Nation's 10 leading brewers increased their
combined shares of sales from 45.06% to 52.60%. In Wisconsin, the
four leading sellers accounted for 47.74% of the State's sales in
1957, and, by 1961, this share had increased to 58.62%. In the
three-state area, the evidence showed that, in 1957, Blatz was the
sixth largest seller, with 5.84% of the total sales there, and
Pabst ranked seventh, with 5.48%. As was true in the beer industry
throughout the Nation, there was a trend toward concentration in
the three- state area. From 1957 to 1961, the number of major
brewers selling there dropped from 104 to 86, and, during the same
period, the eight leading sellers increased their combined shares
of beer sales from 58.93% to 67.65%.
These facts show a very marked thirty-year decline in the number
of brewers and a sharp rise in recent years in the percentage share
of the market controlled by the leading brewers. If not stopped,
this decline in the number of separate competitors and this rise in
the share of the market controlled by the larger beer manufacturers
are bound to lead to greater and greater concentration of the beer
industry into fewer and fewer hands. The merger of Pabst and Blatz
brought together two very large brewers competing against each
other in 40 States. In 1957, these two companies had combined sales
which accounted for 23.95% of the beer sales in Wisconsin, 11.32%
of the sales in the three-state area of Wisconsin, Illinois, and
Michigan, and 4.49% of the sales throughout the country. In accord
with our prior cases, [
Footnote
4] we
Page 384 U. S. 552
hold that the evidence as to the probable effect of the merger
on competition in Wisconsin, in the three-state area, and in the
entire country was sufficient to show a violation of § 7 in each
and all of these three areas.
We have not overlooked Pabst's contention that we should not
consider the steady trend toward concentration in the beer industry
because the Government has not shown that the trend is due to
mergers. There is no duty on the Government to make such proof. It
would seem fantastic to assume that part of the concentration in
the beer industry has not been due to mergers, but even if the
Government made no such proof, it would not aid Pabst. Congress, in
passing § 7 and in amending it with the Celler-Kefauver Anti-Merger
amendment, was concerned with arresting concentration in the
American economy, whatever its cause, in its incipiency. To put a
halt to what it considered to be a "rising tide" of concentration
in American business, Congress, with full power to do so, decided
"to clamp down with vigor on mergers."
United States v. Von's
Grocery Co., ante, at
384 U. S. 276. It passed and amended § 7 on the premise
that mergers do tend to accelerate concentration in an industry.
Many believe that this assumption of Congress is wrong, and that
the disappearance of small businesses, with a correlative
concentration of business in the hands of a few, is bound to occur
whether mergers are prohibited or not. But it is not for the courts
to review the policy decision of Congress that mergers which may
substantially lessen competition are forbidden, which, in effect,
the courts would be doing should they now require proof of the
congressional premise that mergers are a major cause of
concentration. We hold that a trend toward
Page 384 U. S. 553
concentration in an industry, whatever its causes, is a highly
relevant factor in deciding how substantial the anticompetitive
effect of a merger may be.
Reversed and remanded.
[
Footnote 1]
38 Stat. 731, as amended, 64 Stat. 1125, 15 U.S.C. § 18 (1964
ed.).
[
Footnote 2]
The complaint charged that the merger violated § 7 of the
Clayton Act in the following ways, among others:
"(a) Actual and potential competition between Pabst and Blatz in
the sale of beer has been eliminated;"
"(b) Actual and potential competition generally in the sale of
beer may be substantially lessened;"
"(c) Blatz has been eliminated as an independent competitive
factor in the production and sale of beer;"
"(d) The acquisition alleged herein may enhance Pabst's
competitive advantage in the production and sale of beer to the
detriment of actual and potential competition;"
"(e) Industry-wide concentration in the sale of beer will be
increased."
[
Footnote 3]
Times-Picayune v. United States, 345 U.
S. 594,
345 U. S. 611;
United States v. E. I. Du Pont De Nemours & Co.,
351 U. S. 377,
351 U. S. 395;
United States v. Philadelphia Nat. Bank, 374 U.
S. 321,
374 U. S. 360,
n. 37.
[
Footnote 4]
See, e.g., United States v. Von's Grocery Co.,
384 U. S. 270;
Brown Shoe Co. v. United States, 370 U.
S. 294;
United States v. Philadelphia Nat.
Bank, 374 U. S. 321;
United States v. El Paso Gas Co., 376 U.
S. 651;
United States v. Alcoa, 377 U.
S. 271;
United States v. Continental Can Co.,
378 U. S. 441;
FTC v. Consolidated Foods Corp., 380 U.
S. 592.
MR. JUSTICE DOUGLAS, concurring.
While I join the Court's opinion, I add only a word in support
of the Court's description of the anatomy of the "relevant
geographic market" for purposes of the Clayton Act. The alternative
leads to a form of concentration whose ultimate
reductio ad
absurdum is described in the
384
U.S. 546app|>Appendix to this opinion.
|
384
U.S. 546app|
APPENDIX TO CONCURRING OPINION OF MR. JUSTICE
DOUGLAS.
Every time you pick up the newspaper, you read about one company
merging with another company. Of course, we have laws to protect
competition in the United States, but one can't help thinking that,
if the trend continues, the whole country will soon be merged into
one large company.
It is 1978, and, by this time, every company west of the
Mississippi will have merged into one giant corporation known as
Samson Securities. Every company east of the Mississippi will have
merged under an umbrella corporation known as the Delilah
Company.
It is inevitable that one day the chairman of the board of
Samson and the president of Delilah would meet and discuss merging
their two companies.
"If we could get together,' the president of Delilah said, 'we
would be able to finance your projects and you would be able to
finance ours."
"Exactly what I was thinking," the chairman of Samson said.
Page 384 U. S. 554
"That's a great idea and it certainly makes everyone's life less
complicated."
The men shook on it, and then they sought out approval from the
Anti-Trust Division of the Justice Department.
At first, the head of the Anti-Trust Division indicated that he
might have reservations about allowing the only two companies left
in the United States to merge.
"Our department," he said,
"will take a close look at this proposed merger. It is our job
to further competition in private business and industry, and if we
allow Samson and Delilah to merge we may be doing the consumer a
disservice."
The chairman of Samson protested vigorously that merging with
Delilah would not stifle competition, but would help it. "The
public will be the true beneficiary of this merger," he said. "The
larger we are, the more services we can perform, and the lower
prices we can charge."
The president of Delilah backed him up.
"In the Communist system, the people don't have a choice. They
must buy from the state. In our capitalistic society, the people
can buy from either the Samson Company or the Delilah Company."
"But if you merge,' someone pointed out, 'there will be only one
company left in the United States."
"Exactly,' said the president of Delilah. 'Thank God for the
free enterprise system."
The Anti-Trust Division of the Justice Department studied the
merger for months. Finally the Attorney General made this
ruling.
"While we find some drawbacks to only one company's being left
in the United States, we feel the advantages to the public far
outweigh the disadvantages."
"Therefore, we're making an exception in this case and allowing
Samson and Delilah to merge. "
Page 384 U. S. 555
"I would like to announce that the Samson and Delilah Company is
now negotiating at the White House with the President to buy the
United States. The Justice Department will naturally study this
merger to see if it violates any of our strong antitrust laws."
Art Buchwald, Washington Post, June 2, 1966, p. A21.
MR. JUSTICE HARLAN, whom MR. JUSTICE STEWART joins, concurring
in the result.
I concur in the judgment of reversal on the limited ground that
the Government's evidence is sufficient to establish
prima
facie that Wisconsin and the tri-state area comprising
Wisconsin, Michigan and Illinois are both proper sections of the
country in which to measure the probable effects of the acquisition
of Blatz by Pabst under § 7 of the Clayton Act, 38 Stat. 731, as
amended, 64 Stat. 1125, 15 U.S.C. § 18 (1964 ed.). However, I am
wholly unable to subscribe to the Court's opinion, which appears to
emasculate the statutory phrase "in any section of the
country."
I
The Court is quite right in stating that the primary question in
a § 7 case is whether the effect of the challenged acquisition "may
substantially lessen competition."
Ante, p.
384 U. S. 550.
But any resolution of this question necessarily involves a study of
statistics and other evidence bearing upon market shares, market
trends, number of competitors and the like. Obviously such figures
will vary depending upon what geographic area is chosen as
relevant, and the possibilities for "gerrymandering"
Page 384 U. S. 556
are limitless. The Senate Report which discusses the "section of
the country" requirement, S.Rep. No. 1775, 81st Cong., 2d Sess.,
5-6 (1950), notes that it "will vary with the nature of the
product" so as to determine an "economically significant" area in
which to measure a change in the level of competition.
Id.
at 5. "In determining the area of effective competition for a given
product," the report continues,
"it will be necessary to decide what comprises an appreciable
segment of the market. An appreciable segment of the market may not
only be a segment which covers an appreciable segment of the trade,
but it may also be a segment which is largely segregated from,
independent of, or not affected by the trade in that product in
other parts of the country."
Id. at 6.
The cases under § 7 have established a flexible, but workable,
approach to the question of geographic market. In
Brown Shoe
Co. v. United States, 370 U. S. 294, the
Court recognized that a test for an appropriate geographic market
had been prescribed by Congress, 370 U.S. at
370 U. S. 336,
and that it must "correspond to the commercial realities" of the
industry and be "economically significant." 370 U.S. at
370 U. S.
336-337. [
Footnote 2/1]
The determination of relevant geographic market received more
detailed study in
United States v. Philadelphia Nat. Bank,
374 U. S. 321. The
Court there saw the "proper question" as framed to ascertain
"not where the parties to the merger do business or even where
they compete, but where, within the area of competitive overlap,
the effect of the merger on competition will be direct and
immediate."
374 U.S. at
374 U. S.
357.
The appropriate geographic area in which to examine the effects
of an acquisition is an area in which the parties to the merger or
acquisition compete, and around
Page 384 U. S. 557
which there exist economic barriers that significantly impede
the entry of new competitors. Of course, as
Philadelphia
National Bank and commentators [
Footnote 2/2] have noted, no such designation is
perfect, for all geographic markets are to some extent
interconnected, and, over time, any barrier may be overcome or may
disappear owing to structural or technological changes in the
industry,
e.g., refrigeration, which widened markets for
"perishable" foods. Thus, in
Philadelphia National Bank,
it was recognized that large borrowers and depositors operate in
something like a national banking market, and that very small
borrowers and depositors are likely to confine themselves to banks
in their immediate neighborhood. Nevertheless, the Court was able
to find a four-county area in metropolitan Philadelphia to be a
relevant "section of the country" in which to measure that merger.
Some of the criteria cited there as supporting such a determination
were the convenience of location for all but the largest bank
customers as an important factor limiting competition by outsiders,
the concentration of the defendant's business in that region, and
administrative designations of that region as an "area of effective
competition." 374 U.S. at
374 U. S.
359-361.
See also Tampa Elec. Co. v. Nashville Coal
Co., 365 U. S. 320,
365 U. S. 327,
365 U. S.
330-333.
II
In the case before us, the Government has, in my opinion, made a
prima facie showing that the State of Wisconsin and the
three-state area [
Footnote 2/3] are
both relevant
Page 384 U. S. 558
sections of the country for measuring the effects of this
merger. That is, on the basis of the evidence thus far submitted, I
believe the Government has made a sufficient showing that
significant barriers exist to prevent outside brewers from entering
the Wisconsin market as effective competitors to those brewers
already marketing beer there.
As a preliminary matter, it is clear that Pabst and Blatz both
carry on substantial business and are direct competitors in
Wisconsin. About 13% of Pabst's sales in 1957, the year before the
merger, were made in Wisconsin, where Pabst maintained one of its
four breweries. Blatz maintained its only brewery in Wisconsin,
where it sold 31% of its beer in 1957. It is thus clear that the
two beers were important competitors in that area; indeed, Blatz
was the loading seller in Wisconsin and Pabst the fourth largest.
There statistics become meaningful for antitrust purposes in the
context of the further evidence showing substantial barriers to
brewers who were not then selling beer in Wisconsin.
The sales statistics submitted by the Government show not only a
high percentage of the Wisconsin market dominated by Pabst and
Blatz, but also a pattern of local concentration in the sale of
beer there and throughout the country. Wisconsin, with about the
highest per capita beer consumption level in the country, was
dominated by substantially the same group of brewers maintaining
substantially the same market shares year after year without
serious challenge from other brewers operating in other sectors of
the country. [
Footnote 2/4] This
picture of local concentration in various regional markets is
supported by evidence that brewers are able to sell the same beer
in different States for different prices (exclusive of
transportation
Page 384 U. S. 559
cost). Although there is no direct evidence in the record that
beer is subject to high transportation costs, which would, of
course, be highly persuasive evidence supporting the local market
theory, it is relevant that about 90% of beer sold in Wisconsin
comes from breweries located in that State or nearby in Minnesota.
Indeed, in 1959, the Blatz brewery in Wisconsin was closed down,
and Blatz beer was brewed in the four Pabst breweries, because
"decentralization" was considered more efficient. To the extent
that it is true that local breweries have an advantage in terms of
efficiency, and thus cost, a significant barrier exists to brewers
who wish to sell in Wisconsin but brew their beer in other areas of
the country. Thus, in terms of the structure of beer marketing as
reflected in sales statistics and brewery location, the record
supports the relevancy of Wisconsin as a distinguishable and
economically significant market for the sale of beer.
This picture of beer competition as essentially a localized or
regional matter is buttressed by evidence of marketing techniques
used by the industry. Beer is not a fungible commodity like wheat;
product differentiation is important, and the ordinary consumer is
likely to choose a particular brand, rather than purchase any beer
indiscriminately. The record demonstrates a recognition in the
industry that a successful sales program relies to a large extent
on consumer recognition and preference for particular brands, and
that this preference must be built up through intensive advertising
and other promotional techniques. There is evidence in the record
regarding efforts by Pabst and Blatz to enter new or undeveloped
markets in this way, and the inference is inescapable that, were a
brewer from, say, Colorado, interested in entering the Wisconsin
market, a great deal of costly preliminary promotional activity
would be required before sizable Wisconsin sales could be
expected.
Page 384 U. S. 560
In addition, the record indicates that beer is sold through
distribution networks operating on regional, statewide, and local
levels. There are numerous examples in the record of the highly
specialized salesmanship needed to induce local retail sellers to
carry, display, and advertise new brands of beer.
This heavy emphasis on consumer recognition and promotional
techniques in the marketing of beer supports the conclusion that
there does exist a substantial barrier to a new competitor in a
regional market such as Wisconsin. To enter this market, the new
entrant must be prepared to incur considerable expense over a
substantial period of time creating a distribution network and
advertising his brand in order to compete more or less on a parity
with an established seller in the Wisconsin market.
A further factor, the pervasive state regulation of the sale and
promotion of alcoholic beverages, well documented in the record,
supports the acceptability of Wisconsin as a relevant geographic
market for beer. Methods of sales promotion permitted in one State
are unlawful in others. State regulations govern labeling, size of
containers, alcoholic content of beer, shipping procedures, and
credit arrangements with wholesalers. A brewer wishing to enter the
Wisconsin market does not merely start transporting beer to
Milwaukee; he must comply with these various state requirements,
which may differ from those in the States in which he has always
dealt. Although this factor may not, by itself, be an effective
barrier to distant competitors, it does reinforce the other factors
examined in justifying the conclusion that there is a state or
regional market for beer.
All of this, taken in the context of a
prima facie
case, supports the proposition that Wisconsin is an
identifiable "section of the country" presenting impediments to the
entry of new competitors and insulating those already within the
market. In terms of antitrust consequences,
Page 384 U. S. 561
this means that those already within such a local market can
engage in oligopolistic pricing or other practices without a very
real threat that brewers operating in other areas could easily, and
within a reasonably short time, enter the Wisconsin market as
effective competitors of those already entrenched there.
It should be emphasized that we are faced here only with a
dismissal after the presentation of the Government's case. On
remand, the appellees can, of course, attempt to refute this
showing by introducing evidence demonstrating either that these
asserted barriers do not, in practice, exist or that, when seen in
light of other factors, they are so unimportant that brewers who
presently do not sell in the Wisconsin market are not, in fact,
appreciably hindered from entering as effective competitors.
III
The trial court also found that, viewing the entire continental
United States as the relevant market, the evidence submitted did
not sustain the Government's contention that the acquisition may
substantially lessen competition. I would not disturb that
conclusion. I do not, of course, pass upon the sufficiency of the
evidence to establish a
prima facie violation of § 7
within Wisconsin or the three-state area, an issue which the
District Court had no occasion to reach in view of its
determination that neither of these sections was a relevant
market.
For these reasons, I believe the District Court erred in
dismissing the complaint at the close of the Government's case.
[
Footnote 2/1]
See in addition my concurring opinion in
Brown, 370 U.S. at
370 U. S.
368-369.
[
Footnote 2/2]
See, e.g., Bock, Mergers and Markets 35-42 (1960);
Kaysen & Turner, Antitrust Policy 101-102 (1959); Martin,
Mergers and the Clayton Act 321-322 (1959).
[
Footnote 2/3]
The evidence in the record supporting the Government's
contention that the three-state area is a relevant geographic
market in which to measure the effects of this acquisition is not
significantly different from that supporting the Wisconsin market.
For simplicity, this opinion will therefore discuss these criteria
only in terms of the Wisconsin market.
[
Footnote 2/4]
Only one-third of the Nation's beer producers sold beer in the
Wisconsin market.
MR. JUSTICE WHITE, concurring.
I join the Court's opinion insofar as it holds the merger of
Pabst and Blatz may substantially lessen competition in the beer
industry in the Nation as a whole.
MR. JUSTICE FORTAS, concurring in the result.
The District Court clearly erred in dismissing the complaint.
There is ample proof that the effect of this acquisition may be
substantially to lessen competition in the production and sale of
beer in well-defined sections
Page 384 U. S. 562
of the country. But I cannot join the Court's opinion, because,
contrary to the statements in that opinion, I believe that, in § 7
cases, it is the Government's duty, as plaintiff, to prove the
"market" or the "section of the country" in which the claimed
effect of the acquisition is manifest. This is an important, even
essential, element of the judgment which must be made in a § 7
case. This Court has consistently recognized this.
See, e.g.,
Brown Shoe Co. v. United States, 370 U.
S. 294;
United States v. Philadelphia Nat.
Bank, 374 U. S. 321,
374 U.S. 355-362. It is
true that the search for the relevant market is frequently
complicated and elaborated beyond reason or need -- sometimes for
purposes of delay or obstruction. But the search is nevertheless
essential. It is not a snipe hunt.
In some situations, arithmetic as to the merging companies'
aggregate volume of sales of the commodity involved may be
impressive. Sometimes, the resulting size of the conjoined
companies is great. But unless it can be shown that the effect may
be "substantially to lessen competition, or to tend to create a
monopoly" in a specific section of the country, courts are not
authorized to condemn the acquisition. Congress has been specific
in at least this respect, and I cannot agree that this standard
should be denigrated. Unless both the product and the geographical
market are carefully defined, neither analysis nor result in
antitrust is likely to be of acceptable quality.
Compare
majority and dissenting opinions in
United States v. Grinnell
Corp., post, p.
384 U. S. 563
(involving §§ 1 and 2 of the Sherman Act).