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In the Matter of 

POLYPORE INTERNATIONAL, INC., 

a corporation 

Docket No. 9327 

Concurring Opinion of Commissioner J. Thomas Rosch 

I concur with the Commission’s thorough and well-reasoned decision finding that 

Daramic’s acquisition of Microporous violated Section 7 of the Clayton Act. I also concur with 

the Commission’s conclusion that only complete divestiture will remedy this violation. I write 

separately to describe an alternate analytical framework that would focus on the competitive 

effects of this transaction instead of focusing initially on defining the precise contours of the 

relevant market and only then considering the transaction’s competitive effects. 

I also write separately to address Daramic’s assertion that the Commission should 

consider first and foremost the testimony of the economic expert it retained and the economic 

tools described in the Horizontal Merger Guidelines in defining the relevant market. I would 

focus instead on the direct evidence of competitive effects, including the parties’ motives for 

the merger and their post-merger behavior, and let that direct evidence define the market that is 

relevant in this case. 

I. THE LAW 

The Commission’s decision acknowledges that both the courts and the Commission 

have recognized that the traditional burden-shifting framework that begins with defining the 

relevant market “does not exhaust the possible ways to prove a § 7 violation on the merits.” 

Opinion at 11 (quoting FTC v. Whole Foods Market, 548 F.3d 1028, 1036 (D.C. Cir. 2008) 

(Brown, J.)). Nevertheless, the Commission’s opinion embraces a traditional analytical 

framework in this case, including precise upfront market definition. Opinion at 10-11. 

The ultimate inquiry in this case, as in any Section 7 case, is whether the transaction is 

likely to result in anticompetitive effects, not what the precise metes and bounds of the relevant 

market are. In rule of reason cases brought under Section 1 of the Sherman Act, the courts 

have long analyzed the analogous issue of whether it is appropriate to determine the lawfulness 

of completed or ongoing conduct by evidence of anticompetitive effects, rather than by 

requiring precise upfront market definition. See FTC v. Ind. Fed’n of Dentists, 476 U.S. 447 

(1986); Toys “R” Us, Inc. v. FTC, 221 F.3d 928, 937 (7th Cir. 2000); Ball Mem’l Hosp. v. Mut. 

Hosp. Ins., 784 F.2d 1325, 1336 (7th Cir. 1986); see also Republic Tobacco Co. v. N. Atl. 

Trading Co., 381 F.3d 717, 737 (7th Cir. 2004) (“Toys ‘R’ Us [and] Indiana Federation of 

Dentists . . . stand for the proposition that if a plaintiff can show the rough contours of a 

relevant market, and show that the defendant commands a substantial share of the market, then 

direct evidence of anticompetitive effects can establish the defendant’s market power—in lieu 

of the usual showing of a precisely defined relevant market and a monopoly market share.”). 

In that context, the courts have recognized that the purposes of market definition, on the 

one hand, and direct evidence of anticompetitive effects, on the other hand, are consistent—
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both techniques seek to determine whether an agreement by competitors is likely to facilitate 

the exercise of market power, or whether a completed agreement has enabled the exercise of 

market power. See Toys “R” Us, 221 F.3d at 937. Thus, for more than a decade, scholars have 

declared that in Section 1 rule of reason cases, market definition is not an end in itself but 

rather an indirect means to assist in determining the existence or likelihood of the exercise of 

market power. See IIB Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law § 532a, at 242-

43 (3d ed. 2007); Herbert Hovenkamp, Federal Antitrust Policy § 12.8, at 550 (3d ed. 2005). 

Put differently, both the courts and scholars have recognized that in Section 1 rule of reason 

cases, market definition is a tool for analyzing market power, but it is not the only tool, either 

as a matter of law or economics. 

There is no principled reason why the same analysis should not be used in Section 7 

cases. Indeed, two decades ago, Judge Posner observed that judicial interpretation of Section 1 

of the Sherman Act and Section 7 of the Clayton Act had converged. United States v. Rockford 

Mem’l Corp., 898 F.2d 1278, 1281-83 (7th Cir. 1990); see also IV Phillip E. Areeda & Herbert 

Hovenkamp, Antitrust Law § 913b (3d ed. 2009) (“In cases where a merger facilitates a 

significant ‘unilateral’ price increase for a grouping of sales that was not an obvious relevant 

market prior to the merger, the appropriate conclusion is that the merger has identified a new 

grouping of sales capable of being classified as a relevant market. This formulation meets the 

statutory requirement [in Section 7] that the ‘effect’ of a merger is anticompetitive in some 

‘line of commerce’ and in some ‘section of the country.’”). At the same time, Judge Thomas 

(now Justice Thomas) emphasized in United States v. Baker Hughes, Inc., 908 F.2d 981, 992 

(D.C. Cir. 1990), that the ultimate inquiry in a Section 7 case is whether the transaction is likely 

to result in anticompetitive effects, not simply to define the relevant market. 

This is not to say that one can avoid defining the relevant market altogether. As the 

passage from Areeda & Hovenkamp makes clear, the text of Section 7 requires identification of 

the “line of commerce” and the “section of the country” that are likely to suffer anticompetitive 

effects as a result of a transaction. See also Republic Tobacco, 381 F.3d at 737 (in Section 1 

cases, an antitrust plaintiff cannot “dispense entirely with market definition” but it is sufficient 

that the “rough contours” of the market be identified). In 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. When 

that is so, the competitive effects themselves may define the relevant market. Thus, at least in a 

case like this, market definition cannot properly be considered a gating item in the sense that 

competitive effects cannot be considered before the market is defined. Indeed, in the case of a 

consummated merger, the relevant market may generally be defined after the effects of the 

transaction are identified. 

The authorities on which Daramic relies are not to the contrary. Daramic asserts, for 

example, that market definition is a “critical” requirement in antitrust cases generally, and it 

cites seven cases supporting that assertion. RAB at 9. That is correct, but it does not mean that 

the relevant market must necessarily be defined with precision upfront. Daramic also contends 

that Complaint Counsel bears the burden of proving the relevant market. Id. That is true too, 

but it does not mean that Complaint Counsel cannot bear this burden, at least in a consummated 

merger case, by proving that the challenged merger resulted in anticompetitive effects. In fact, 
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that is just what former Chairman Muris contemplated when he said that in a consummated 

merger case, “it’s not enough to assert that the transaction was anticompetitive – you have to 

prove it.” Id. at 9 n.7 (quoting Interview with Timothy Muris, Global Competition Review, 

Dec. 21, 2004). 

Daramic repeatedly assails the ALJ’s reliance on statements of the parties and other 

participants in the market, including customers, instead of on “economic” or “econometric” 

evidence. Id. at 1, 6-7, 9-24. Specifically, Daramic urges that the testimony of Complaint 

Counsel’s expert be disregarded because he relied on “soft” qualitative evidence instead of 

“rigorous” economic tests like the “hypothetical monopolist test,” the SSNIP test, and the 

Elzinga-Hogarty test. Id. at 1, 6-7, 10-15, 19-21, 23-24. Similarly, Daramic urges that the 

testimony of its own expert must be credited because it was “grounded” in such economic 

theories. Id. at 15-16, 21, 23-24.1

 In the same vein, at pages 10 and 16 of its appeal 

brief, Daramic describes as a “46-year old” historical relic the Supreme Court’s decision in 

Brown Shoe Co. v. United States, 370 U.S. 294, 325 (1962), in which the Court specifically 

blessed the use of “practical indicia” of the market, like the views of market participants, to 

define the relevant market.2

 Presumably, Daramic would also dismiss the district court’s 

decision in FTC v. Staples, Inc., 970 F. Supp. 1066, 1075, 1078 (D.D.C. 1997) and the D.C. 

Circuit’s majority decision in Whole Foods, 548 F.3d at 1033 (Brown, J.); id. at 1044-45 (Tatel, 

J.), both of which relied on such “practical indicia” in the same fashion.3 

To be sure, economic analyses like the “hypothetical monopolist” test, the SSNIP test, 

and the Elzinga-Hogarty test may be valuable predictive tools in unconsummated merger cases 

where there is a need to predict whether the transaction will result in anticompetitive effects. 

But, where, as here, the merger has been consummated, the need for predicting the effects of 

the transaction may be reduced or eliminated. That, in turn, may reduce or eliminate the need 

for economic tools to help make the prediction. There may be empirical evidence whether and 

to what extent customers regarded the parties’ rivals as alternatives before and after the 

transaction; whether a price increase or a significant impairment in non-price terms or 

innovation occurred in the wake of the transaction; and whether and to what extent rivals were 

attracted by the changes resulting from the transaction and capitalized on them by entry or 

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 I emphasize that I would not choose the testimony of Complaint Counsel’s expert over the 

testimony of Daramic’s expert, as such, or the use of the hypothetical monopolist and SSNIP 

tests, which these experts purported to use. Opinion at 17-18. I only credit the testimony of 

Complaint Counsel’s expert insofar as that testimony accurately described the “practical 

indicia” endorsed in Brown Shoe. 

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 Daramic invokes “soft” evidence of the relevant market—i.e., practical indicia of the 

relevant market of the sort blessed in Brown Shoe—when it considers it in its self-interest to do 

so. RAB at 8, 18, 20-23. 

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 Daramic’s contention at page 12 of its appeal brief that reliance on such “soft” evidence 

did not permit Complaint Counsel’s expert to “estimate cross-elasticities of demand” is wrong. 

As Daramic admits in footnote 11 of its brief, Complaint Counsel’s expert specifically relied on 

“statements by the buyers that they had very little options to substitute” to find that “the 

demand curve was very inelastic.” 
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repositioning. Evidence about what actually happened following the transaction may, in other 

words, reduce the need to employ economic theories in order to predict the relevant market or 

what is likely to happen—in particular, the SSNIP test described in the Horizontal Merger 

Guidelines. Put differently, economic theory is not a substitute for, or superior to, the empirical 

evidence about whether the transaction has actually resulted in anticompetitive effects. See, 

e.g., FTC v. CCC Holdings Inc., 605 F. Supp. 2d 26, 68-72 (D.D.C. 2009); Abbott Labs. v. 

Teva Pharms. USA, Inc., 432 F. Supp. 2d 408, 428 (D. Del. 2006); FTC v. Arch Coal, Inc., 329 

F. Supp. 2d 109 (D.D.C. 2004); FTC v. Staples, Inc., 970 F. Supp. 1066 (D.D.C. 1997). 

Again, however, it cannot be said that the fact that a merger is consummated will 

always eliminate the need for these predictive tools. For one thing, in United States v. General 

Dynamics Corp., 415 U.S. 486 (1974), the Supreme Court held that if and to the extent a 

relevant market was dynamic (or to put it simply, that the past or current circumstances in the 

market were not prologue), adjustments should be made in our assumptions about those 

circumstances. That may require predictions that can be aided by the use of economic tools. 

For another thing, drivers are more careful when they see a police car nearby (or think that one 

may be nearby). See Chicago Bridge & Iron Co. v. FTC, 534 F.3d 410, 434-35 (5th Cir. 2008) 

(observing that post-acquisition evidence can be manipulated by respondents). Thus, what has 

actually occurred may be illusory. It may be that as soon as the police are gone (or in this 

context, as soon as an investigation or challenge is over), market conduct may change radically. 

For that reason too, predictive economic tools may be useful in some, but not all, consummated 

merger cases. But the record does not reflect the need for such tools in this case. 

II. THE FACTS 

The Commission opinion describes in detail evidence demonstrating that Daramic’s 

acquisition was likely to and in fact did cause anticompetitive effects. I write separately to 

emphasize two types of evidence that are particularly helpful in illuminating the transaction’s 

effects: Daramic’s documents describing the transaction’s purpose, and post-merger price 

increases. 

Both the ALJ and the Commission found that Daramic’s documents established that 

Daramic acquired Microporous (1) to eliminate a key competitive threat in the motive, deep 

cycle, and SLI markets; (2) to eliminate a threat to its revenues and profits; and (3) to enable 

price increases. Opinion at 28-30. The Supreme Court has held that the intent of a party can be 

considered to illuminate the effects of its conduct. See Aspen Skiing Co v. Aspen Highlands 

Skiing Corp., 472 U.S. 585, 602 (1985) (“evidence of intent is . . . . relevant to the question 

whether the challenged conduct is fairly characterized as ‘exclusionary’ or ‘anticompetitive’”);

Chicago Bd. of Trade v. United States, 246 U.S. 231, 238 (1918) (“knowledge of intent may 

help the court to interpret facts and to predict consequences”); see also United States v. 

Microsoft Corp., 253 F.3d 34, 59 (D.C. Cir. 2001) (“Evidence of the intent behind the conduct 

of a monopolist is relevant . . . to the extent it helps us understand the likely effect of the 

monopolist’s conduct.”); U.S. Football League v. NFL, 842 F.2d 1335, 1359 (2d Cir. 1988) 

(“Evidence of intent and effect helps the trier of fact to evaluate the actual effect of challenged 

business practices in light of the intent of those who resort to such practices.”). Thus, I 

consider this evidence to be relevant in order to assess the transaction’s competitive effects. 
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Both the ALJ and the Commission opinion also found that Daramic announced 

significant and wide-ranging post-acquisition price increases that were consistent with its preacquisition intent documents. Opinion at 30-31; IDF 897-918. Daramic argues that these price 

increases were justified by higher input costs, but both the Commission opinion and the ALJ 

found otherwise. Opinion at 31; IDF 917-22. Daramic also argues that the price increases 

were never implemented, but merely announced. RAB at 36. This ignores the surcharge that 

Daramic announced and instituted for most customers on July 1, 2008. IDF 906. In addition, 

Daramic announced increased prices in late 2008 and early 2009, which were effective for 

many customers. Opinion at 30-31; IDF 897-918. For other customers, the record was closed 

before a final price was reached. Yet even for these customers, the evidence shows that 

Daramic was seeking significant price increases and that customers had very limited success 

resisting those increases. And, perhaps most significantly, those price increases did not result 

in a single lost sale for Daramic. IDF 916. 

III. CONCLUSION 

 In sum, especially where, as here, the merger at issue is consummated, it is generally 

preferable to determine whether a merger has had anticompetitive effects by reference to the 

parties’ motives for the transaction and the actual effects resulting from the merger instead of 

trying first to define with precision the dimensions of relevant market based on the testimony of 

paid expert economists and the predictive economic tools described in the Merger Guidelines.