No. 12-1016 

In the Supreme Court of the United States

POLYPORE INTERNATIONAL, INC., PETITIONER

v.

FEDERAL TRADE COMMISSION

ON PETITION FOR A WRIT OF CERTIORARI 

TO THE UNITED STATES COURT OF APPEALS 

FOR THE ELEVENTH CIRCUIT 

BRIEF FOR THE RESPONDENT IN OPPOSITION 

DAVID C. SHONKA

Acting General Counsel 

JOHN F. DALY

Deputy General Counsel 

 for Litigation 

MICHELE ARINGTON

Attorney 

Federal Trade Commission

Washington, D.C. 20580 

DONALD B. VERRILLI, JR. Solicitor General 

Counsel of Record 

Department of Justice 

Washington, D.C. 20530-0001 

SupremeCtBriefs@usdoj.gov 

(202) 514-2217 

 
(I) 

QUESTIONS PRESENTED 

1. Whether the court of appeals correctly affirmed 

the determination of the Federal Trade Commission 

(Commission) that petitioner’s acquisition of a business 

rival likely would substantially lessen competition, in 

violation of Section 7 of the Clayton Act, 15 U.S.C. 18, 

when that rival was petitioner’s only competitor in two 

product markets and was expanding into a third product 

market controlled by petitioner and only one other firm. 

2. Whether the court of appeals correctly affirmed 

the Commission’s remedial order requiring petitioner to 

divest, among other assets formerly held by the acquired business rival, a production plant that had enabled the rival to compete more effectively in the relevant 

markets. 
(III) 

TABLE OF CONTENTS

Page

Opinions below ................................................................................ 1 

Jurisdiction ...................................................................................... 1 

Statement ......................................................................................... 2 

Argument ....................................................................................... 12 

Conclusion ...................................................................................... 29 

TABLE OF AUTHORITIES 

Cases: 

Abex Corp. v. FTC, 420 F.2d 928 (6th Cir.), 

cert. denied, 400 U.S. 865 (1970) ......................................... 27

Adarand Constructors, Inc. v. Mineta, 534 U.S. 103 

(2001) ...................................................................................... 25 

Beatrice Foods Co. v. FTC, 540 F.2d 303 (7th Cir. 

1976) ....................................................................................... 27

Chicago Bridge & Iron Co. v. FTC, 534 F.3d 410 

(5th Cir. 2008) .................................................................... 6, 28 

Copperweld Corp. v. Independence Tube Corp., 

467 U.S. 752 (1984) ............................................................... 21

FTC v. H.J. Heinz Co., 246 F.3d 708 (D.C. Cir. 2001) .......... 6 

FTC v. Procter & Gamble Co., 386 U.S. 568 (1967) ............ 18 

SEC v. Chenery Corp., 318 U.S. 80 (1943) ............................ 25

Seeburg Corp. v. FTC, 425 F.2d 124 (6th Cir.), 

cert. denied, 400 U.S. 866 (1970) ......................................... 27

United States v. Baker Hughes Inc., 908 F.2d 981 

(D.C. Cir. 1990) ............................................................... 22, 23 

United States v. El Paso Natural Gas Co., 

376 U.S. 651 (1964) ............................................... 9, 12, 15, 22 

United States v. Falstaff Brewing Corp., 

410 U.S. 526 (1973) ............................................................... 18

United States v. General Dynamics Corp., 

415 U.S. 486 (1974) ............................................................... 24
IV 

Cases—Continued: Page

United States v. Marine Bancorporation, Inc., 

418 U.S. 602 (1974) ...................................................... passim 

United States v. Penn-Olin Chem. Co., 378 U.S. 158 

(1964) ...................................................................................... 18

United States v. Philadelphia Nat’l Bank, 

374 U.S. 321 (1963) ...................................................... passim

United States v. Waste Mgmt., Inc., 743 F.2d 976 

(2d Cir. 1984) ......................................................................... 22 

United States v. Williams, 504 U.S. 36 (1992) .................... 29

Zivotofsky v. Clinton, 132 S. Ct. 1421 (2012) ....................... 25 

Statutes:

Clayton Act: 

15 U.S.C. 18(b) (§ 7) ................................................. passim 

15 U.S.C. 21(b) (§ 11) ........................................................ 25 

Sherman Act, 15 U.S.C. 1 (§ 1) .............................................. 21 

15 U.S.C. 45(g)(4) ..................................................................... 25 

Miscellaneous: 

Phillip E. Areeda & Herbert Hovenkamp, Antitrust 

Law (3d ed. 2006) ............................................................ 17, 20 

Donald P. Turner, Conglomerate Mergers and 

Section 7 of the Clayton Act, 78 Harv. L. Rev. 1313 

(1965) ................................................................................ 16, 17 

 
(1) 

In the Supreme Court of the United States

No. 12-1016 

POLYPORE INTERNATIONAL, INC., PETITIONER

v.

FEDERAL TRADE COMMISSION

ON PETITION FOR A WRIT OF CERTIORARI 

TO THE UNITED STATES COURT OF APPEALS 

FOR THE ELEVENTH CIRCUIT 

BRIEF FOR THE RESPONDENT IN OPPOSITION 

OPINIONS BELOW 

The opinion of the court of appeals (Pet. App. 1a-21a) 

is reported at 686 F.3d 1208. The opinion and order of 

the Federal Trade Commission (Pet. App. 22a-170a) is 

not yet published in the Federal Trade Commission 

Decisions but is available at 2010 WL 5132519. The 

decision of the Administrative Law Judge (Pet. App. 

171a-830a) is reported at 149 F.T.C. 501. 

JURISDICTION 

The judgment of the court of appeals was entered on 

July 11, 2012. A petition for rehearing was denied on 

October 17, 2012 (Pet. App. 831a-832a). The petition for 

a writ of certiorari was filed on January 15, 2013. The 

jurisdiction of this Court is invoked under 28 U.S.C. 

1254(1). 
2 

STATEMENT 

1. This case involves a consummated merger of two 

of the only three firms that produce and sell battery 

separators―microporous membranes installed between 

the positive and negative plates in flooded lead-acid 

batteries to prevent electrical short circuits―to customers (battery manufacturers) in North America. Petitioner, through its Daramic division, manufactures battery separators for a variety of applications, including 

deep-cycle batteries (used in products such as golf carts 

and floor scrubbers), motive power batteries (used in 

mobile industrial products such as forklifts), and automotive starter-lighter-ignition (SLI) batteries. Microporous Products L.P., whose acquisition by petitioner is 

at issue here, was the only other supplier of separators 

for deep-cycle and motive batteries in North America. 

The only other supplier of separators for flooded leadacid batteries in North America is Entek, which produces only SLI battery separators. Pet. App. 2a-3a, 22a24a. 

Before it was acquired, Microporous also was competing for SLI business, although it did not yet have sales 

in that market. Microporous first took steps to enter 

the SLI separator market in 2003, after the world’s 

largest automotive battery manufacturer, Johnson Controls (JCI), approached Microporous about supplying 

SLI separators to create more competition in that market. When petitioner―then JCI’s supplier of SLI separators in Europe―learned that Microporous was bidding on a portion of JCI’s SLI business, petitioner used 

the threat of cutting off its supply to JCI in Europe to 

secure a long-term supply contract with JCI. JCI nonetheless continued to work with Microporous to develop 

an additional source of SLI separators, and after it test-
3 

ed samples from Microporous, it qualified Microporous’s 

SLI separators for its batteries in 2007. JCI later entered into a supply contract with Entek for SLI separators when its contract with petitioner expired. Pet. 

App. 4a-5a, 62a-63a, 372a-373a, 396a. 

Microporous also began discussions in 2007 with two 

other manufacturers of automotive batteries, Exide and 

East Penn Battery, about supplying SLI separators. 

Microporous and Exide entered into a memorandum of 

understanding, which documented their intention that 

Microporous would supply SLI separators to Exide beginning in 2010. East Penn Battery, a customer of petitioner’s, also was interested in entering into a long-term 

contract with Microporous for SLI separators. When 

petitioner learned of Microporous’s overtures to East 

Penn Battery, petitioner offered price concessions for 

its SLI and other battery separators to keep East Penn 

Battery’s business. Pet. App. 5a, 62a, 78a-79a, 385a391a, 423a-424a.1

At the same time, Microporous was working to expand its production capacity beyond its existing production plant in Piney Flats, Tennessee. Microporous constructed a plant in Feistritz, Austria, that was equipped 

to produce either motive or SLI battery separators. 

The Feistritz plant was completed and scheduled to 

commence operating in early 2008. Microporous 

planned to shift production of its motive battery separators for European customers from Piney Flats to 

Feistritz, allowing it to increase production for its North 

American customers at Piney Flats. Microporous also 

 

1

 Petitioner asserts (Pet. 23 n.8) that its concessions did not relate 

to SLI separators. The testimony of petitioner’s own officials, however, established that petitioner was concerned about the loss of East 

Penn’s SLI business. See Pet. App. 418a. 
4 

planned to install an additional production line at Piney 

Flats, which could produce either motive or SLI separators. Pet. App. 6a, 408a-410a, 548a. 

Petitioner’s executives had long viewed Microporous 

as a significant competitive threat. In 2003, the president of petitioner’s Daramic division put Microporous at 

the top of his list of possible acquisitions to “[e]liminate 

price competition.” In 2005, Daramic’s head of sales 

warned Daramic’s CEO that Microporous’s plans for 

expansion would result in “our loss of current customers 

or further reduction in our market pricing, hence loss of 

margins.” Over the next two years, the threat of Microporous’s expansion was the subject of numerous memoranda by petitioner’s executives, who discussed acquiring Microporous as a way to avoid costly competition, 

including in the SLI separator market. Petitioner’s 

2008 budget for Daramic projected that without the 

acquisition, petitioner would lose increasing amounts of 

business to Microporous and would be forced to reduce 

prices, but that with the acquisition, petitioner could 

increase prices. Pet. App. 5a-6a, 79a-82a, 354a, 358a, 

401a-404a, 433a-442a. 

Petitioner acquired Microporous on February 29, 

2008. Within months after the acquisition, petitioner 

began to announce price increases on sales of its deepcycle, motive, and SLI battery separators that were not 

covered by long-term contracts. Pet. App. 24a, 83a-84a, 

450a-454a. 

2. In September 2008, the Federal Trade Commission (Commission) issued an administrative complaint 

alleging, as relevant here, that petitioner’s acquisition of 

Microporous may substantially lessen competition or 

tend to create a monopoly in several relevant markets, 

in violation of Section 7 of the Clayton Act, 15 U.S.C. 18 
5 

(Section 7). After a full administrative trial at which 

more than 2100 exhibits were admitted and 35 witnesses 

testified (Pet. App. 175a), an Administrative Law Judge 

(ALJ) concluded that the acquisition was unlawful. Id. 

at 171a-830a. 

3. a. On de novo review, the Commission affirmed 

the ALJ’s determination that the acquisition would 

substantially lessen competition in three relevant markets: the North American markets for deep-cycle, motive, and SLI battery separators.2

 Pet. App. 22a-107a. 

Adopting the ALJ’s findings of fact (Pet. App. 25a), 

the Commission found that, before the acquisition, 

petitioner and Microporous had been the only competitors in the deep-cycle and motive separator markets, 

and that the acquisition was therefore a merger to monopoly in those markets. The Commission also found 

that Microporous had been an actual competitor in the 

SLI separator market, poised to challenge petitioner 

and Entek’s hold on that market. The Commission 

based that finding on evidence that (1) Microporous had 

been actively competing for SLI business, (2) Microporous had made meaningful progress toward supply arrangements with JCI and Exide, and (3) petitioner had 

viewed Microporous as a competitive threat for SLI 

business and had responded by lowering its prices. 

Although petitioner sought to downplay Microporous’s 

incursion into the SLI separator market and argued that 

Microporous’s board of directors did not support the 

company’s SLI expansion plans, the Commission found 

 

2

 The Commission reversed the ALJ’s decision that the acquisition 

would harm competition in a fourth product market (separators for 

certain batteries used in computer and telecommunication systems), 

finding the evidence insufficient to show that Microporous was a 

participant in that market. Pet. App. 66a-68a. 
6 

that the evidence demonstrated otherwise. Id. at 60a65a. 

The Commission analyzed the competitive impact of 

the acquisition in each of these markets, applying “th[e] 

traditional burden-shifting framework” courts have used 

in Section 7 merger cases. Under that framework, the 

government can establish a presumption of liability by 

showing that a merger will lead to undue concentration 

in a relevant market, and the burden then shifts to the 

defendant to rebut the presumption with evidence that 

competitive harm is unlikely. See United States v. Philadelphia Nat’l Bank, 374 U.S. 321, 363 (1963) (“[A] 

merger which produces a firm controlling an undue 

percentage share of the relevant market, and results in 

a significant increase in the concentration of firms in 

that market, is so inherently likely to lessen competition 

substantially that it must be enjoined in the absence of 

evidence clearly showing that the merger is not likely to 

have such anticompetitive effects.”). The government 

can support its prima facie case based on market structure with other evidence showing that anticompetitive 

effects are likely. See Pet. App. 40a-43a (citing, inter 

alia, FTC v. H.J. Heinz Co., 246 F.3d 708, 715-717 (D.C. 

Cir. 2001); Chicago Bridge & Iron Co. v. FTC, 534 F.3d 

410, 423 (5th Cir. 2008)). 

The Commission concluded that a presumption of liability was warranted for each of the three separator 

markets because the acquisition created a monopoly in 

the deep-cycle and motive separator markets, and it 

eliminated Microporous’s competitive impact in the SLI 

separator market, returning that market to an entrenched duopoly. Pet. App. 60a-65a, 68a-76a. The 

Commission further concluded that the presumption extended to both unilateral effects and coordinated effects. 
7 

See id. at 85a (“By eliminating Microporous as a third 

player in the SLI market, the acquisition increased the 

likelihood of anticompetitive coordinated effects [on the 

part of petitioner and Entek].”); id. at 85a-86a (rejecting 

petitioner’s arguments in rebuttal on that point). The 

Commission also found, in the alternative, that a prima 

facie case for liability with respect to the SLI separator 

market was established by the acquisition’s elimination 

of potential competition in that market. Id. at 75a n.41. 

Even apart from these inferences based on market 

structure, the Commission found “strong qualitative 

evidence of anticompetitive unilateral effects in the 

deep-cycle, motive, and SLI markets.” Pet. App. 84a. 

In particular, the Commission determined that preacquisition competition between petitioner and Microporous had resulted in lower prices in each of the three 

markets, and that petitioner had been motivated to 

acquire Microporous at least in part to eliminate competition. The Commission also relied on actual anticompetitive effects, finding that, after the acquisition, petitioner had promptly announced price increases consistent with those projected in its pre-acquisition documents. Id. at 76a-84a. The Commission went on to 

reject petitioner’s rebuttal arguments that “entry [by 

other firms] and power [exercised by large] buyers 

would counteract any potential anticompetitive effects 

from the acquisition.” Id. at 87a; see id. at 87a-95a. 

b. Commissioner Rosch concurred. Pet. App. 108a117a. He explained that, although he agreed with the 

Commission’s analysis, the case could also be resolved 

simply “on the direct evidence of competitive effects, 

including the parties’ motives for the merger and their 

post-merger behavior.” Id. at 108a. He noted that 

“[t]he ultimate inquiry * * * is whether the transac-
8 

tion is likely to result in anticompetitive effects.” Id. at 

109a. Commissioner Rosch further explained that, “[i]n 

the case of a consummated merger, which this is, there 

is generally no need to predict whether the transaction 

is likely to result in anticompetitive effects because that 

will be apparent from what has actually occurred.” Id.

at 111a; see id. at 114a (explaining that “[e]vidence 

about what actually happened following the transaction 

may * * * reduce the need to employ economic theories in order to predict the relevant market or what is 

likely to happen”). 

Applying that approach, Commissioner Rosch found 

“two types of evidence [to be] particularly helpful in 

illuminating the transaction’s effects: [Petitioner’s] 

documents describing the transaction’s purpose, and 

post-merger price increases.” Pet. App. 115a. As to the 

former, he noted that “[b]oth the ALJ and the Commission found that [petitioner’s] documents established that 

[petitioner] acquired Microporous (1) to eliminate a key 

competitive threat in the motive, deep cycle, and SLI 

separator markets; (2) to eliminate a threat to its revenues and profits; and (3) to enable price increases.” Id.

at 116a (citing id. at 79a-82a). As to the latter, he noted 

that “[b]oth the ALJ and the Commission opinion also 

found that [petitioner] announced significant and wideranging post-acquisition price increases that were consistent with its pre-acquisition intent documents.” Ibid.

(citing id. at 83a-84a). 

c. To restore the competition lost through the acquisition, the Commission ordered petitioner to divest the 

assets it had acquired from Microporous, including the 

plant in Feistritz, Austria. The Commission found that, 

although the Feistritz plant was located abroad, divestiture of the plant would be necessary to give the acquirer 
9 

of the divested assets the ability to compete effectively 

within the relevant North American markets. In particular, including the Feistritz plant in the divested assets 

would relieve the same capacity constraints that Microporous itself had faced before it constructed the 

Feistritz plant, and it would give the acquirer the same 

ability to offer customers a global supply that Microporous would have been able to offer. Pet. App. 96a-105a. 

4. The court of appeals affirmed. Pet. App. 1a-21a. 

The court upheld the Commission’s factual findings, 

including the Commission’s assessment of the extent 

and competitive impact of Microporous’s activities in the 

SLI separator market. In particular, the court found 

petitioner’s challenges to the Commission’s factual findings to be “wholly without merit” 

with respect to whether Microporous’s dealings with 

JCI, Exide, and East Penn involved the SLI market; 

with respect to whether Microporous’s board of directors was on board with the expansion plans of 

management; with respect to the imminent capability 

of Microporous to supply the SLI market; and with 

respect to whether before acquisition, [petitioner] did 

in fact act in procompetitive ways (in the SLI market 

as well as the other two markets) in response to Microporous’s dealings in the market. 

Id. at 15a n.11. 

The court rejected petitioner’s argument “that the 

Commission erred * * * [in] treating Microporous as 

an actual competitor in the SLI separator market rather 

than a potential competitor.” Pet. App. 8a; see id. at 8a16a. The court explained that the merger here resembled the merger this Court condemned in United States

v. El Paso Natural Gas Co., 376 U.S. 651 (1964). The 

court of appeals noted that in El Paso, prior to the ac-
10 

quisition, the acquired firm had made efforts to sell in 

the relevant market, and that those efforts, though unsuccessful, had induced the acquiring firm to reduce its 

prices in that market. See Pet. App. 10a. The court of 

appeals pointed out the factual resemblance of this case: 

Like the acquired company in El Paso that was already enaged in the business of selling gas in other 

markets, Microporous was already making similar 

separators. * * * It had begun discussions with 

several companies and had produced a sample product satisfactorily for at least one large customer. It 

had even submitted quotes and entered into memoranda of understanding with another large customer. 

Both [petitioner] and El Paso certainly considered 

the companies that they acquired to be competitive 

threats. Both companies lowered their prices and 

gave other concessions in response to their customers’ dealings with the acquired companies. 

Id. at 11a. 

The court of appeals further explained that the acquisitions in El Paso and in this case had similar effects on 

the market structures: 

In both cases, the pre-acquisition relevant market 

was highly concentrated. In both cases, the acquisition ensured a continuation of the high concentration 

and eliminated the decrease in concentration that 

would result from the acquired company’s entry into 

the market. In both cases, the pre-acquisition market activity by the acquired company―although resulting in no actual sales―had a substantial, actual 

pro-competitive effect on the market. In both cases, 

the perception by the acquiring company of the competitive threat posed by the acquired company pro-
11 

vided additional evidence of the acquired company’s 

competitive presence. 

Pet. App. 12a (footnotes ommitted). The court of appeals added that, in light of petitioner’s post-acquisition 

price increases, the government’s case was stronger 

here than in El Paso. Id. at 13a. 

The court of appeals noted that, although this Court 

in El Paso itself had not described the acquired company in that case as an actual competitor, the Court had 

later explained in United States v. Marine Bancorporation, Inc., 418 U.S. 602 (1974), that “El Paso was an 

actual competitor case, rather than a potential competitor case.” Pet. App. 13a; see Marine Bancorporation, 

418 U.S. at 623 n.24 (“The merger declared unlawful in 

El Paso removed not merely a potential, but rather an 

actual, competitor.”) (internal quotation marks and citation omitted). The court of appeals held that, because 

the acquisition at issue here had likewise eliminated an 

actual competitor, the Commission had correctly relied 

on Philadelphia National Bank in presuming that the 

acquisition substantially lessened competition in the SLI 

separator market. Pet. App. 13a-14a. The court noted 

that petitioner had “not pointed to any evidence that 

negates this evidence of anticompetitive effect,” and it 

accordingly affirmed the Commission’s determination. 

Id. at 15a. The court of appeals did not decide whether 

the Commission’s determination with respect to the SLI 

separator market could also have been supported by an 

analysis treating Microporous as a potential competitor. 

Id. at 16a n.12.3

 

3

 The court of appeals went on to consider petitioner’s challenges to 

the Commission’s analysis of the deep-cycle and motive separator 

markets. The court found that substantial evidence supported the 
12 

The court of appeals affirmed the Commission’s remedial order, holding that the Commission had properly 

exercised its discretion in requiring divestiture of Microporous’s Feistritz plant. Pet. App. 19a-21a. The court 

noted that this requirement was supported by the Commission’s findings that divestiture of the Feistritz plant 

would be necessary to provide the acquirer of the divested assets the ability to compete effectively within 

the North American market, by relieving capacity constraints that Microporous had remedied by constructing 

the Feistritz plant, and by giving the acquirer the same 

advantages of a global supply that Microporous was able 

to offer its customers once it constructed the Feistritz 

plant. Ibid. Finally, the court declined to entertain 

petitioner’s argument that the Commission had erred in 

refusing to allow a “safety valve” permitting petitioner 

to withhold the Feistritz plant from divestiture under 

certain circumstances. Id. at 21a n.13. The court explained that petitioner had failed to raise that issue 

before the Commission and had not properly presented 

it in its briefing on appeal. Ibid.

ARGUMENT 

1. Petitioner primarily argues (Pet. 13-22) that the 

court of appeals erred in treating its acquisition of Microporous as the elimination of an actual rather than a 

potential competitor in the SLI separator market. Petitioner questions the court of appeals’ reliance on United 

States v. El Paso Natural Gas Co., 376 U.S. 651 (1964), 

and United States v. Marine Bancorporation, Inc., 418 

U.S. 602 (1974), and the Commission’s use of the pre-

 

Commission’s determinations that the acquisition was an unlawful 

merger to monopoly in both of these markets. Pet. App. 16a-19a. 

Petitioner does not renew those challenges in this Court. 
13 

sumption of liability arising from analysis of market 

structure that this Court established in United States v. 

Philadelphia National Bank, 374 U.S. 321 (1963). The 

court of appeals correctly upheld the Commission’s analysis, and its decision does not conflict with any decision 

of this Court or of another court of appeals. Further review is unwarranted. 

a. Contrary to petitioner’s contention, the court of 

appeals properly relied on El Paso to conclude that the 

acquisition at issue here eliminated an actual competitor 

in the SLI separator market. 

i. The Court in El Paso addressed El Paso’s acquisition of a rival natural gas supplier (Pacific Northwest) 

that was undertaking to expand into a market supplied 

by El Paso. A California utility (Edison) had approached Pacific Northwest, which at that time had not 

made actual sales in the California market, about supplying natural gas. When Edison and Pacific Northwest 

reached a tentative agreement, El Paso responded by 

lowering its price and offering a firm supply of gas (as 

opposed to the intermittent supply that it had been 

providing) to Edison. As a result, the tentative agreement between Pacific Northwest and Edison was terminated, and no sales pursuant to that agreement were 

made. Shortly thereafter, El Paso and Pacific Northwest reached an agreement through which El Paso acquired 99.8% of Pacific Northwest’s outstanding stock. 

El Paso, 376 U.S. at 654-655. 

This Court held that the acquisition violated Section 7 

because it had eliminated a competitor that was shown 

to have been a “substantial factor” in the California 

market. El Paso, 376 U.S. at 658. The Court emphasized that Section 7 was concerned with “probabilities, 

not certainties,” ibid., and was intended “ to arrest the 
14 

trend toward concentration, the tendency to monopoly, 

before the consumer’s alternatives disappeared through 

merger,” id. at 659 (quoting Philadelphia Nat’l Bank, 

374 U.S. at 367). The fact that Pacific Northwest had 

not made actual sales in the California market was not 

dispositive because “[u]nsuccessful bidders are no less 

competitors than the successful one.” Id. at 661. 

The court of appeals cataloged the deep resemblance 

between El Paso and this case, see pp. 10-11, supra, 

including the fact that Microporous’s pre-acquisition 

activities in the SLI separator market, like Pacific 

Northwest’s activities in California, had a “substantial, 

actual pro-competitive effect on the market,” Pet. App. 

12a. Having recognized those factual parallels, the court 

of appeals properly relied on El Paso to uphold the 

Commission’s decision. The court explained that in both 

cases, elimination of the acquired company’s actual 

competitive presence in the market likely substantially 

lessened competition and thus violated Section 7. See 

id. at 11a-14a. 

Petitioner observes that, at the time of the acquisition at issue here, Microporous had not made actual 

sales of SLI separators, “had no firm offers or contracts 

to supply” SLI separators, and had not formulated an 

“approved business plan to enter” the SLI separator 

market. Pet. 13. Petitioner posits a “stark contrast” 

between those facts and the circumstances in El Paso, 

noting that Pacific Northwest had decided to enter the 

California market and was acting on its plan. Pet. 15. It 

appears, however, that Pacific Northwest also had no 

“firm offers or contracts” to supply natural gas in California at the time it was acquired by El Paso. The acquired entities in both cases had made concrete plans to 

enter the relevant markets, and were regarded by the 
15 

acquiring companies as significant competitive threats, 

even though the nascent competitors had not yet made 

actual sales in those markets. 

The Commission’s findings show that Microporous 

was as vigorous a competitor in the SLI separator market as Pacific Northwest was in the California natural 

gas supply market when the respective firms were acquired. The Commission found that (1) Microporous had 

developed an SLI separator and had bid on a portion of 

JCI’s business; (2) Microporous had entered into a 

memorandum of understanding with Exide to supply 

SLI separators, and Exide intended to purchase Microporous’s SLI separators when its existing supply contract expired in 2010; (3) Microporous was installing a 

new production line at its Tennessee plant that could 

produce SLI separators; (4) Microporous’s board of 

directors was in accord with management’s plans to 

supply the SLI separator market; and (5) petitioner 

itself considered Microporous a sufficiently serious 

competitive threat to its SLI business that it made price 

concessions to East Penn in response to Microporous’s 

discussions with East Penn about an SLI supply contract. See Pet. App. 4a-6a, 11a-12a, 61a-65a. The court 

of appeals found petitioner’s challenges to these and 

similar factual findings to be “wholly without merit.” Id.

at 15a n.11. 

ii. The Court in El Paso did not identify Pacific 

Northwest as an “actual” competitor in the California 

market and indeed used the term “potential competitor.” 

376 U.S. at 659. This Court later made clear, however, 

that “El Paso was in reality * * * an actual-competition rather than a potential-competition case,” Marine Bancorporation, 418 U.S. at 623. The Court relied 

(id. at 623 n.24) on Professor Turner’s explanation: 
16 

[T]he acquisition of Pacific Northwest removed not 

merely a potential, but rather an actual, competitor. 

Of course, the extent of Pacific Northwest’s probable 

future influence on the market for natural gas in California was not certain. * * * But barring some exceptional proof that future events would minimize or 

eliminate the competitive significance of a merging 

firm, it was certainly reasonable to conclude that at 

least as of the time of the acquisition the merger 

would probably have resulted in a substantial lessening of competition. 

Donald P. Turner, Conglomerate Mergers and Section 7 

of the Clayton Act, 78 Harv. L. Rev., 1313, 1371 

(1965) (Conglomerate Mergers). The Court in Marine 

Bancorporation further explained that “[t]he degree of 

entry that the acquired firm had achieved into the 

market of the acquiring firm”—referring to Pacific 

Northwest’s tentative supply agreement with Edison 

and to El Paso’s competitive response to retain Edison 

as a customer―“distinguishes El Paso from subsequent 

cases truly presenting a potential-competition situation.” 418 U.S. at 624 n.24. The court of appeals was 

faithful to that understanding of El Paso when it recognized that Microporous’s dealings with SLI separator 

customers, and petitioner’s competitive response to 

those dealings, signaled that petitioner’s acquisition of 

Microporous eliminated an actual competitor from the 

SLI separator market. 

Petitioner argues (Pet. 18) that Marine Bancorporation is “not helpful as legal guidance” because it has 

“blurred the important doctrinal line” between mergers 

of actual competitors and mergers of potential competitors. Although the pre-acquisition competitive posture 

of the acquired firm is an important consideration in a 
17 

Section 7 case, petitioner’s criticism of Marine Bancorporation is unfounded. As leading commentators have 

explained, “a firm that submits bids against the dominant firm but loses is clearly an ‘actual’ competitor, 

perhaps even forcing the dominant firm to lower its bid 

in the face of a rival bidder.” 4 Phillip E. Areeda & 

Herbert Hovenkamp, Antitrust Law ¶ 912a, at 59 (3d 

ed. 2009) (Antitrust Law). 

As this Court in Marine Bancorporation recognized, 

Pacific Northwest’s pre-acquisition activities in El Paso

had precisely that effect. Although Pacific Northwest 

had not yet made actual sales in the California market, 

its efforts to compete in that market had “compell[ed] 

the acquiring firm [El Paso] to make significant price 

and delivery concessions in order to retain [an important] customer.” Marine Bancorporation, 418 U.S. 

at 624 n.24. The Commission and the court of appeals 

correctly recognized that the same is true here.4

Petitioner points out that this Court (or individual 

Justices) had, in cases before Marine Bancorporation, 

 

4

 It may sometimes be a close question whether a firm’s entry overtures are more fairly deemed actual competition or a sign of potential 

competition. See, e.g., 5 Antitrust Law ¶ 1123a, at 60 (“[T]he acquisition [in El Paso] removed not merely a potential but also an actual 

competitor. * * * Although the impact was direct and clearly substantial in El Paso, in other situations it may be very uncertain.”); 

Conglomerate Mergers, 78 Harv. L. Rev. at 1371 (“[I]n the absence of 

the kind of direct proof found in El Paso, it obviously becomes more 

difficult to determine the existence and substantiality of the competitive influence of a firm not actually selling in the market.”). This case 

is not an “uncertain” or “difficult” one, however, given the ample 

“direct proof” (ibid.) of Microporous’s actual competition that the 

Commission and the court of appeals cataloged below. In any event, 

this Court has unequivocally rejected petitioner’s proposed brightline rule that status as an “actual competitor” requires actual sales in 

the relevant market. 
18 

referred in passing to El Paso as involving a potential 

competitor. Petitioner suggests that these cases undermine Marine Bancorporation’s characterization of 

El Paso as involving the elimination of actual competition. See Pet. 17 (citing United States v. Falstaff Brewing Corp., 410 U.S. 526, 536 n.13 (1973); United States 

v. Penn-Olin Chem. Co., 378 U.S. 158, 170 (1964); 

FTC v. Procter & Gamble Co., 386 U.S. 568, 586 (1967) 

(Harlan, J., concurring)). But the Court that decided 

Marine Bancorporation was well aware of what it had 

said in those earlier cases. In the very sentence after 

it described El Paso as “an actual-competition rather 

than a potential-competition case,” the Court cited Falstaff Brewing, Penn-Olin, and Procter & Gamble as 

“defin[ing]” the “potential-competition doctrine.” Marine Bancorporation, 418 U.S. 623-624 & n.25. In none 

of those decisions, moreover, did the Court suggest that 

a firm like Microporous—which had developed products, 

courted customers, made unsuccessful bids for their 

business, and prompted a competitive response from its 

rival—should be regarded as anything less than an actual competitor. 

The Court in Marine Bancorporation recognized 

that “[t]he term ‘potential competitor’” had been used in 

El Paso, but stated that “El Paso was in reality * * * 

an actual-competition case.” 418 U.S. at 623 (emphasis 

added). The Court’s reference to El Paso as an “actualcompetition case” thus was not an unconsidered use of 

imprecise language. To the contrary, the evident purpose of the Court’s discussion was to acknowledge the 

imprecision of its prior language, while rejecting unambiguously the very reading of El Paso that petitioner 

advances here—i.e., that actual sales by a competitor in 
19 

the relevant market are a prerequisite to “actual competition.” 

iii. Petitioner contends (Pet. 18-19) that the decision 

below conflicts with decisions of several circuits. Petitioner’s only basis for its claim of conflict, however, is 

that other courts of appeals have occasionally referred 

to El Paso as a potential-competition case, notwithstanding this Court’s disavowal of that reading in Marine Bancorporation. None of the cases petitioner cites 

involved facts resembling those found by the Commission here, and none addressed whether the acquisition of 

a firm actively seeking business (but without actual 

sales) in the relevant market is properly analyzed as the 

acquisition of an actual competitor. 

b. In a related vein, petitioner contends (Pet. 20-22) 

that Microporous’s lack of actual sales in the SLI separator market renders inoperative the Philadelphia National Bank presumption of liability—“that a merger 

which produces a firm controlling an undue percentage 

share of the relevant market, and results in a significant 

increase in the concentration of firms in that market 

* * * [presumptively] must be enjoined,” 374 U.S. at 

363. Petitioner construes Philadelphia National Bank

too narrowly, and its claim of a division of authority 

among lower courts is unfounded. 

i. Petitioner does not dispute that, in important respects, the acquisition here presents a paradigmatic 

case for applying the Philadelphia National Bank presumption. Petitioner’s acquisition of Microporous returned the SLI separator market to an entrenched duopoly, among the most concentrated market structures 

possible. Under those conditions, where “concentration 

is already great, the importance of preventing even 

slight increases in concentration and so preserving the 
20 

possibility of eventual deconcentration is correspondingly great.” Philadelphia Nat’l Bank, 374 U.S. at 365 

n.42. That concern is especially acute when a nascent 

rival is the target of the acquisition. See 4 Antitrust 

Law ¶ 912a, at 59-60 (“The acquisition by an already 

dominant firm of a new or nascent rival can be just as 

anticompetitive as a merger to monopoly. * * * [T]he 

acquisition eliminates an important route by which competition could have increased in the immediate future. 

It thus bears a very strong presumption of illegality that 

should rarely be defeated.”). Petitioner does not contend in this Court, moreover, that it could rebut the 

Philadelphia National Bank presumption if that presumption applies. 

Instead, petitioner’s objection to applying the Philadelphia National Bank presumption rests on its view 

that the acquisition at issue here did not “result[] in a 

significant increase in the concentration of firms in th[e] 

market,” 374 U.S. at 363. See Pet. 21 (“[A] firm not yet 

supplying customers in the relevant market at the time 

of the merger (like Microporous in the SLI market) has 

a market share of zero, and thus, by definition its combination with a firm already participating in the market 

cannot increase the level of concentration.”). Petitioner’s analysis is flawed because it assumes that an “increase in the concentration of firms” (in the sense in 

which that phrase is used in Philadelphia National 

Bank) can be measured only by shares of actual past 

sales. 

To be sure, relying on shares of actual past sales to 

project future market shares, and in turn to assess the 

concentration of a market, is one way to detect an increase in concentration. The Court in Philadelphia 

National Bank analyzed the increase in concentration 
21 

from the bank merger there by reference to the existing 

firms’ percentages of “control * * * of the area’s commercial banking business.” 374 U.S. at 365. The Court 

concluded that “these percentages raise an inference 

that the effect of the contemplated merger of [the firms] 

may be substantially to lessen competition.” Ibid. The 

Court in Philadelphia National Bank did not suggest, 

however, that this comparison is the only permissible 

way to determine whether an acquisition of one firm by 

another will increase concentration in the relevant market. Rather, the analysis used by the Court to compare 

pre- and post-merger concentration simply reflected the 

theory and evidentiary proof advanced by the United 

States in that case. See id. at 334, 364-365. 

An increase in market concentration can properly be 

identified by other measures, such as a reduction in the 

number of independent firms vying for business in a 

market. Cf. Copperweld Corp. v. Independence Tube 

Corp., 467 U.S. 752, 769 (1984) (explaining that concerted action is condemned by Section 1 of the Sherman Act, 

15 U.S.C. 1, because it “deprives the marketplace of the 

independent centers of decisionmaking that competition 

assumes and demands”). That was the core of the 

Commission’s analysis of the SLI separator market: 

“The acquisition eliminated the impact that Microporous 

had on competition in the market and returned the market to a duopoly controlled by the two long-time incumbents.” Pet. App. 75a. Likewise, the court of appeals 

concluded that petitioner’s acquisition of Microporous 

“did increase concentration in that it eliminated the preacquisition influence on the market exercised by Microporous” and, indeed, “eliminated the competition in the 

market which [petitioner] itself contemplated.” Id. at 

14a n.9. Because the Commission and the court of ap-
22 

peals properly found an increase in concentration in an 

already highly concentrated market, they were correct 

to rely on the Philadelphia National Bank presumption.5

ii. Petitioner contends that the decision below conflicts with decisions it characterizes as holding that the 

Philadelphia National Bank presumption applies “only 

[to] mergers of current competitors.” See Pet. 22 (citing 

United States v. Baker Hughes Inc., 908 F.2d 981 (D.C. 

Cir. 1990) (Thomas, J.); United States v. Waste Mgmt., 

Inc., 743 F.2d 976 (2d Cir. 1984)). There is no conflict. 

Petitioner asserts that those decisions treat as “current 

competitors” only “firms that are direct and current 

rivals.” Pet. 22 & n.7. The Commission found, however, 

that Microporous was in every relevant sense petitioner’s “direct and current rival,” having competed to win 

the business of petitioner’s existing customers, and 

having thereby induced petitioner to make pricing concessions it would not otherwise have made. 

Petitioner’s claim of a conflict with the cited decisions 

appears to rest on the premise that petitioner and 

Microporous could not have been “current competitors” 

in the SLI separator market because Microporous had 

made no actual sales in that market prior to the acquisition. Neither of the decisions that petitioner cites, however, endorsed that line of reasoning or addressed the 

 

5

 Contrary to petitioner’s contention (Pet. 22), the fact that El Paso

did not expressly invoke the Philadelphia National Bank presumption does not render unsound the court of appeals’ reliance on both 

cases together. If anything, the El Paso Court’s swift decision to 

condemn the acquisition there, based upon a finding that the acquisition eliminated a firm that had been a “substantial factor” in the 

relevant market, 376 U.S. at 658, illustrates how far El Paso and this 

case lie from the margin at which the Philadelphia National Bank

presumption might be outcome-determinative. 
23 

application of the Philadelphia National Bank presumption to the acquisition of a rival that was competing 

for business in the relevant market but that had not yet 

made actual sales. Rather, both Baker Hughes and 

Waste Management concerned the factual and legal 

standards for rebutting a concededly sufficient prima 

facie case under Philadelphia National Bank. See 

Baker Hughes, 908 F.2d at 982-984; Waste Mgmt., 743 

F.2d at 981-984. 

c. For two reasons, this case would be a poor vehicle 

for resolving the legal questions of Section 7 liability 

that petitioner presents with respect to the SLI separator market, even if those issues otherwise warranted 

this Court’s review. 

First, the Commission’s finding of liability in the SLI 

separator market relied not only on the Philadelphia 

National Bank presumption, but also on direct evidence 

of the acquisition’s anticompetitive effects, including 

evidence that petitioner had increased prices for SLI 

separators after the acquisition. See Pet. App. 13a, 76a84a. The Commission principally relied on that evidence 

to “corroborate[]” its use of the Philadelphia National 

Bank presumption, see id. at 84a, but the evidence is 

powerful even standing alone. Indeed, as Commissioner 

Rosch’s concurring opinion explained, the unlawfulness 

of petitioner’s acquisition of Microporous was evident 

simply from “the direct evidence of competitive effects, 

including the parties’ motives for the merger and their 

post-merger behavior.” Id. at 108a; see 108a-117a. 

Commissioner Rosch’s observations make especially 

clear why a case involving a consummated merger is a 

relatively unattractive vehicle for addressing the application of a predictive presumption like the one endorsed 

in Philadelphia National Bank. As he explained, “[i]n 
24 

the case of a consummated merger, which this is, there 

is generally no need to predict whether the transaction 

is likely to result in anticompetitive effects because that 

will be apparent from what has actually occurred.” Id.

at 111a.6

Second, even if the Court granted certiorari and 

ruled in petitioner’s favor on the Section 7 liability issue 

presented by the petition, petitioner would not likely 

derive any long-term practical benefit from the Court’s 

decision. The Commission’s remedial order does not 

depend exclusively on its finding of a violation of Section 

7 with respect to the SLI separator market. Independent of its analysis of that market, the Commission found, 

and the court of appeals affirmed, that the acquisition 

violated Section 7 with respect to the deep-cycle and 

motive separator markets because it created an outright 

monopoly in those markets. Pet. App. 16a-19a, 61a, 74a76a. Petitioner does not seek this Court’s review of 

those determinations, which on their own would support 

the Commission’s remedial order. 

That order directs petitioner to divest Microporous’s 

Piney Flats plant, which produced separators for the 

deep-cycle and motive separator markets. The order 

also directs petitioner to divest Microporous’s Feistritz 

plant, which (as explained below, pp. 26-27, infra) is 

necessary to allow the acquirer to compete effectively 

 

6

 Although proof of actual anticompetitive effects from a consummated merger is an independently sufficient basis for condemning 

the merger under Section 7, such proof is not required. See United 

States v. General Dynamics Corp., 415 U.S. 486, 505 (1974) (“[T]he 

mere nonoccurrence of a substantial lessening of competition in the 

interval between acquisition and trial does not mean that no substantial lessening will develop thereafter; the essential question remains 

whether the probability of such future impact exists at the time of 

trial.”). 
25 

for North American customers—including motive and 

deep-cycle customers. See Pet. App. 101a-103a. Those 

considerations would warrant complete divestiture to 

fully restore the competition eliminated in the motive 

and deep-cycle separator markets, regardless of petitioner’s liability as to the SLI separator market. 

To be sure, if this Court were to vacate or reverse the 

Commission’s Section 7 liability determination with 

respect to the SLI separator market, principles of administrative law likely would require that the Commission, not this Court, pass in the first instance on whether 

the Commission’s liability finding could be reinstated on 

other grounds and whether its remedial order would 

stand undisturbed. See SEC v. Chenery Corp., 318 U.S. 

80 (1943). But the strong likelihood that the Commission would ultimately make the same Section 7 liability 

finding and impose the same remedy counsels against 

discretionary review by this Court. That is especially so 

because further review would give petitioner the windfall of a continued monopoly position while the divestiture order remains suspended by operation of law, see 

15 U.S.C. 21(b), 45(g)(4). 

2. Petitioner asks this Court to grant review “to 

clear the tangled underbrush from the orchard of the 

potential competition doctrine.” Pet. 28. Because the 

court of appeals agreed with the Commission that the 

acquisition eliminated petitioner’s actual competitor in 

the SLI separator market, the court did not address 

whether the acquisition could also have been condemned 

on an analysis that treated Microporous as a potential 

competitor. Pet. App. 16a n.12. Because this is “a court 

of final review and not first view,” Zivotofsky v. Clinton, 

132 S. Ct. 1421, 1430 (2012) (quoting Adarand Construc-
26 

tors, Inc. v. Mineta, 534 U.S. 103, 110 (2001)), that question is not suitably presented in this case. 

Petitioner acknowledges, moreover, that the question 

is not independently certworthy. Petitioner states that 

the “alternative basis [for the Commission’s decision] 

w[ould] be at issue in this case” only if this Court reviewed and rejected the Commission’s principal framework for analyzing the acquisition. Pet. 23. For the reasons given above, the primary question petitioner presents does not warrant review. 

3. Petitioner contends (Pet. 28-34) that the decision 

below implicates a disagreement among the courts of appeals about the Commission’s authority to order divestiture of assets outside the relevant market. The court of 

appeals correctly upheld the Commission’s remedial order, and no circuit conflict exists. 

a. Petitioner asserts that the court of appeals upheld 

the Commission’s authority to order the divestiture of 

an asset that “bears no logical relation” to the competitive harm found (here, the elimination of competition in 

North American separator markets). Pet. 28. That assertion mischaracterizes the Commission’s rationale for 

the scope of its remedial order and the court of appeals’ 

reasons for upholding that order. As the court below 

recognized, the Commission included Microporous’s 

Feistritz plant in its divestiture order so that the acquirer of the divested assets could compete effectively 

within the North American markets. This aspect of the 

Commission’s remedy therefore had the necessary connection to the competitive harm that the divestiture 

order was intended to address. 

The Commission found that, when Microporous produced motive separators for its foreign customers at its 

Piney Flats plant, capacity constraints limited its ability 
27 

to compete for additional North American business. 

Construction of the Feistritz plant promised to relieve 

the Piney Flats plant of the burden of production for 

European customers, enabling Microporous to commit 

to additional North American sales and making it a 

more effective competitor in North America. See Pet. 

App. 20a-21a. The Commission separately found that 

including the Feistritz plant in the divestiture package 

would allow the acquirer to compete on terms demanded 

by customers, such as having multiple plants as insurance against supply disruptions and the ability to provide local supply points for customers’ global operations. 

The Commission therefore determined that divestiture 

of the Piney Flats plant alone would not produce an adequate substitute for the more attractive competitor lost 

through the unlawful acquisition. See id. at 98a-105a. 

Although petitioner disputes those factual findings, that 

factbound dispute would not warrant this Court’s review. In any event, ample evidence supports those findings. See id. at 99a-105a, 412a-415a, 549a-551a. 

b. Contrary to petitioner’s contention (Pet. 31-34), 

the decision below does not reflect legal disagreement 

among lower courts about the scope of the Commission’s 

remedial authority. To be sure, some courts have modified ancillary provisions of Commission remedies found 

to be unrelated to the violation. See Beatrice Foods Co.

v. FTC, 540 F.2d 303, 313-314 (7th Cir. 1976); Seeburg 

Corp. v. FTC, 425 F.2d 124, 129-130 (6th Cir.), cert. 

denied, 400 U.S. 866 (1970); Abex Corp. v. FTC, 420 F.2d 

928, 933 (6th Cir.), cert. denied, 400 U.S. 865 (1970). But 

the court below did not question its own authority to 

insist that the Commission’s chosen remedy have a reasonable nexus to the competitive harm sought to be addressed. Rather, the court simply recognized that di-
28 

vestiture of the Feistritz plant was a reasonable means 

of protecting competition in the relevant North American markets. The fact that the court below upheld the 

Commission’s remedial order, while other court of appeals reviewing unrelated Commission orders have 

sometimes reached different results, is not evidence of a 

circuit conflict. 

The decision below is consistent, in particular, with 

the Fifth Circuit’s decision in Chicago Bridge & Iron Co.

v. FTC, 534 F.3d 410 (2008), on which petitioner principally relies (see Pet. 31-33). The court in Chicago 

Bridge upheld a Commission order requiring the divestiture of assets for building water tanks, even though the 

relevant product market was cryogenic tanks, because 

cryogenic tank sales were irregularly timed and water 

tank sales would provide the regular income stream 

needed for the divestiture buyer’s viability. The Fifth 

Circuit thus recognized that the Commission may appropriately order divestiture of assets outside the relevant market if divestiture of those assets is necessary to 

restore competition within the relevant market. Id. at 

441-442. The court of appeals’ decision in this case reflects the same basic principle. 

Petitioner emphasizes that the Commission included 

in the Chicago Bridge remedial order, but not in the 

remedial order at issue here, a provision allowing the 

exclusion of certain assets from divestiture if the acquirer and monitor trustee both found them unnecessary. 

See Pet. 32. Such a narrow and subsidiary quarrel with 

the precise terms of a divestiture order does not present 

a matter of recurring importance warranting this 

Court’s review. And the fact that two courts of appeals 

have sustained Commission remedial orders having 
29 

slightly different parameters does not suggest the existence of a circuit conflict. 

In any event, the court below properly declined to 

reach the question whether the remedial order at issue 

in this case should have included a Chicago Bridge-like 

provision. The court explained that petitioner had forfeited that challenge by failing to raise it before the 

Commission or in its initial brief on appeal. Pet. App. 

21a. This Court’s “traditional rule * * * precludes a 

grant of certiorari” when “the question presented was 

not pressed or passed upon below.” United States v. 

Williams, 504 U.S. 36, 41 (1992) (citation omitted). The 

Court should adhere to that rule here. 

CONCLUSION 

The petition for a writ of certiorari should be denied. 

Respectfully submitted. 

DAVID C. SHONKA

Acting General Counsel 

JOHN F. DALY

Deputy General Counsel 

for Litigation 

MICHELE ARINGTON

Attorney 

Federal Trade Commission 

DONALD B. VERRILLI, JR. Solicitor General 

MAY 2013