Opinion ID: 109287
Heading Depth: 1
Heading Rank: 2

Heading: The Clayton Act

Text: The Court concedes that under our prior decisions the Government has established a prima facie case under § 7. Ante, at 120. But the Court affirms the District Court's determination that the acquisitions add nothing of anticompetitive significance to the pre-existing correspondent associate relationship. Since I have concluded that the relationship itself violates the Sherman Act, I also disagree with the Court's affirmance of the District Court on the Clayton Act issue. Since, in my view, appellees can no longer rely upon the affiliation to rebut the Government's prima facie case, I would remand to the District Court for consideration of the convenience and needs defense of 12 U. S. C. § 1828 (c) (5) (B). But I also disagree with the Court's conclusion that the acquisitions add nothing of significance to the existing arrangements, and I would therefore reverse even if I accepted the Court's disposition of the Sherman Act counts. I state briefly my reasons for so concluding. If not acquired, the 5-percent banks have the power to break their ties with C&S, and the likelihood that any would do so may be expected to increase as the demand for their services grows and as their managements acquire additional business experience. However risky these ventures may have been at their inception, the recent performance of the 5-percent banks attests to their present viability. [17] Because of the continuing population growth of the Atlanta area, the banks may anticipate an expanding demand for their services. These circumstances might well induce the management of a 5-percent bank to assume a more independent posture, at least to shop around among other large Atlanta banks for more conventional correspondent services. [18] Quite apart from what the managements of the 5-percent banks might do, it is most improbable that C&S would long be happy with existing arrangements if acquisition were enjoined. The record demonstrates the aggressive, expansionist performance of C&S, having increased its Atlanta offices from three in 1946 to more than 100 by the time of trial. It is quite inconceivable that such a firm would long be content to continue operations through de facto branches in which its interest was limited to 5%. The formation of de jure branches, ultimately in competition with former correspondent associates, would be a plausible result. The foregoing are not ephemeral possibilities, Brown Shoe Co. v. United States, 370 U. S. 294, 323 (1962), that antitrust analysis should ignore. Section 7 was intended, as we have repeatedly said, to arrest anticompetitive tendencies in their `incipiency.'  United States v. Philadelphia National Bank, 374 U. S., at 362. In applying the § 7 standards, we are obliged to hold acquisitions unlawful if a reasonable likelihood of a substantial lessening of competition under future conditions is discernible. E. g., United States v. Continental Can Co., 378 U. S. 441, 458 (1964); FTC v. Procter & Gamble Co., 386 U. S. 568, 577 (1967); United States v. Falstaff Brewing Corp., 410 U. S. 526, 539 (1973) (DOUGLAS, J., concurring in part). While inquiry as to future market conditions and performance inevitably involves speculation, fidelity to the congressional purpose requires us to resolve reasonable doubts in favor of the preservation of independent entities. This is perforce true where, as here, the market is highly concentrated and the acquiring firm is the dominant one. My Brother WHITE reminded us in his dissent last Term in United States v. Marine Bancorporation, 418 U. S., at 653: In the last analysis, one's view of this case, and the rules one devises for assessing whether this merger should be barred, turns on the policy of § 7 of the Clayton Act to bar mergers which may contribute to further concentration in the structure of American business. . . . The dangers of concentration are particularly acute in the banking business, since `if the costs of banking services and credit are allowed to become excessive by the absence of competitive pressures, virtually all costs, in our credit economy, will be affected. . . .'  (Citations omitted.) Today's decision permits C&S, the dominant commercial bank in Atlanta, further to entrench its position. Two other rivals, which together with C&S control more than 75% of the banking business in Atlanta, may now be expected to follow suit, acquiring their own  de facto branches. [19] I believe these developments exemplify the further concentration in the structure of American business that § 7 was designed to prevent. Accordingly, I would reverse the judgment of the District Court.