Still More "Suddenly Classic" Antitrust Cases From The New Merger Guidelines: General Dynamics, Marine Bancorporation And Procter & Gamble

• Published date: 09 August 2023
• Subject Matter: Corporate/Commercial Law, Antitrust/Competition Law, Transport, M&A/Private Equity, Antitrust, EU Competition , Marine/ Shipping
• Law Firm: Bona Law PC
• Author: Mr Steven Cernak and Luis Blanquez

As we explained in a prior post, the new draft merger Guidelines issued recently by the FTC and DOJ cite to several older court opinions that may be unfamiliar to antitrust practitioners who have been focused for decades exclusively on earlier versions of the Guidelines. In the last post, we covered two such cases, Philadelphia National Bank and Pabst. Below, we cover three more of such newly "classic cases:" General Dynamics, Marine Bancorporation and Protect & Gamble.

General Dynamics

It is not surprising that the New Guidelines cite General Dynamics seven times; after all, the case has been cited in hundreds of opinions and even more law review articles and treatises. Nor are some of the citations surprising. For example, one citation (FN 93) quotes the case for the proposition that "other pertinent factors" besides market share might mandate a conclusion that competition would not be lessened by a merger. Similarly, citations about market definition make sense because the definitions of both the product and geographic markets were contentious points in the opinion. But for reasons we explain below, the citations to the case for parts of the New Guidelines that would challenge mergers on the basis of just an increase in concentration, while accurate, seem out of step with the opinion as a whole.

General Dynamics is a 1974 opinion with the 5-4 majority opinion written by Justice Stewart. Eight years before, Justice Stewart had written the dissent in Von's Grocery. In that dissent, Justice Stewart penned one of his most famous quotes (no, not that one): "The sole consistency that I can find is that, in litigation under ' 7, the Government always wins." More substantively, Justice Stewart took issue with the majority's market definition analysis. Instead of simply assuming a "Los Angeles grocery" market as the majority did, Justice Stewart would have applied a "housewife driving test" that, despite the antiquated name, was similar to the hypothetical monopolist test of later Guidelines. Also, instead of assuming anticompetitive effects from "high" market shares and increasing competition, as did the majority, Justice Stewart would have considered other pertinent factors, like low barriers to entry, turnover of firms, and changes to the Los Angeles population.

Eight years later, Justice Stewart applied similar concepts in General Dynamics, but this time for the majority. In this case, one Midwest coal supplier gradually purchased the voting securities of another Midwest coal producer. The DOJ...