Document: 384 U.S. 546 86 S.Ct. 1665 16 L.Ed.2d 765 UNITED STATES, Appellant,v.PABST BREWING COMPANY et al. No. 404. Argued April 27, 1966. Decided June 13, Edwin M. Zimmerman, Atty., Dept. of Justice, Washington, D.C., for appellant. John T. Chadwell, Chicago, Ill., appellees. Mr. Justice BLACK delivered the opinion Court. 1 In 1958 Pabst Brewing Company, Nation's tenth largest brewer, acquired Blatz eighteenth largest. 1959 Government brought this action charging that acquisition violated § 7 Clayton Act as amended by Celler-Kefauver Anti-Merger amendment.1 That section makes it unlawful one corporation engaged in commerce to acquire stock or assets another 'where any line country, effect such may be substantially lessen competition, tend create a monopoly.' (Emphasis supplied.) The Government's complaint charged 'The competition monopoly production and sale beer United States various sections thereof, including State Wisconsin three state area encompassing Wisconsin, Illinois Michigan * *.'2 At close case, District Court dismissed case under Rule 41(b) Fed.Rules Civ.Proc., holding proof had not shown either three-state was 'relevant geographic market within which probable should tested.' also ruled 'the industry continental States, only relevant market.' 233 F.Supp. 475, 481, 488. I. 2 We first take up court's dismissal based on its conclusion failed prove constituted 'a country meaning Section 7.' Apparently thought order show violation essential market' same way corpus delicti must proved establish crime. But when brings an must, according language statute, no more than there has been merger between two corporations 'in country.' requires merely have substantial anticompetitive somewhere section' States. This phrase does call delineation 'section country' metes bounds surveyor would lay off plot ground.3 introduce evidence shows result lessened throughout other hand country. event proved. Certainly failure army expert witnesses what constitutes 'economic' 'geographic' is adequate ground dismiss case. Compare v. Continental Can Co., 378 441, 458, 84 1738, 12 953. Congress did seem troubled about exact spot where might lessened; simply intended outlaw mergers threatened all parts Proof exists entirely subsidiary crucial question every whether anywhere II. 3 evidence, consisting documents, statistics, official records, depositions, affidavits witnesses, related principally competitive position Nation, Illinois, Michigan, Wisconsin. record admissions formal answer complaint, introduced Government, findings fact Judge, among others following facts. 1958, year merger, brewer Nation ranked eighteenth. made fifth with 4.49% industry's total sales. By 1961, years after increased share 5.83% become third before leading seller fourth. 23.95% sales there. 1961 Pabst's 27.41%. took place marked steady trend toward economic concentration. According number breweries operating declined from 714 1934 229 different competitors selling fallen 206 1957 162 1961. companies 77 1955 54 time were becoming fewer fewer, brewers increasing their shares Between 10 combined 45.06% 52.60%. four sellers accounted 47.74% State's 58.62%. showed sixth 5.84% seventh 5.48%. As true concentration three- area. From major dropped 104 during period eight 58.93% 67.65%. 4 These facts very thirty-year decline sharp rise recent percentage controlled brewers. If stopped, separate larger manufacturers are bound lead greater into hands. together large competing against each 40 these 11.32% accord our prior cases,4 we hold area, entire sufficient areas. 5 overlooked contention consider because due mergers. There duty make proof. It fantastic assume part but even if proof, aid Pabst. Congress, passing amending amendment, concerned arresting American economy, whatever cause, incipiency. To put halt considered 'rising tide' business, full power do so, decided 'to clamp down vigor mergers.' Von's Grocery U.S., at 276, S.Ct., 1482. passed premise accelerate industry. Many believe assumption wrong, disappearance small businesses correlative business hands few occur prohibited not. courts review policy decision forbidden, doing they now require congressional cause industry, causes, highly factor deciding how anti-competitive be. 6 Reversed remanded. DOUGLAS, concurring. 8 While I join Court's opinion, add word support description anatomy purposes Act. alternative leads form whose ultimate reductio ad absurdum described Appendix opinion. 9 APPENDIX TO CONCURRING OPINION OF MR. JUSTICE DOUGLAS. Every you pick newspaper read company merging company. Of course, laws protect can't help thinking that, continues whole will soon merged 11 1978 west Mississippi giant known Samson Securities. east umbrella Delilah Company. inevitable day chairman board president meet discuss companies. 13 'If could get together,' said, 'we able finance your projects ours.' 14 'Exactly thinking,' said. 15 'That's great idea certainly everyone's life less complicated.' men shook then sought out approval Anti-Trust Division Department. 17 head indicated he reservations allowing left merge. 18 'Our department,' 'will look proposed merger. job further private allow merge consumer disservice.' 19 protested vigorously stifle it. public beneficiary merger,' are, services can perform, lower prices charge.' 20 backed him up. 'In Communist system people don't choice. They buy state. capitalistic society Company Company.' 21 'But merge,' someone pointed out, 'there States.' 22 'Exactly,' said Delilah. 'Trank God free enterprise system.' 23 Department studied months. Finally Attorney General ruling. 'While find some drawbacks being feel advantages far outweign disadvantages. 24 'Therefore, we're making exception 25 'I like announce negotiating White House President naturally study see violates strong anti-trust laws.' 26 Art Buchwald, Washington Post, 2, 1966, p. A21. 27 HARLAN, whom STEWART joins, concurring result. 28 concur judgment reversal limited prima facie tristate comprising both proper measure effects Act, 38 Stat. 731, amended, 64 1125, U.S.C. (1964 ed.). However, am wholly unable subscribe appears emasculate statutory 29 quite right stating primary challenged 'may competition.' Ante, 550. resolution necessarily involves statistics bearing upon shares, trends, like. Obviously figures vary depending chosen relevant, possibilities 'gerrymandering' limitless. Senate Report discusses requirement, S.Rep. 1775, 81st Cong., 2d Sess., 5—6 (1950), notes nature product' so determine 'economically significant' change level competition. Id., 5. determining effective given product,' report continues, 'it necessary decide comprises appreciable segment market. An covers trade, largely segregated from, independent of, affected trade product 6, U.S.Code Congressional Service 1950, pp. 4293, 4297, 4298. 30 cases established flexible, workable, approach Brown Shoe Co. 370 294, 82 1502, recognized test appropriate prescribed 336, 1529, "correspond commercial realities' economically significant.' 336—337, 1530.1 determination received detailed Philadelphia Nat. Bank, 374 321, 83 1715. saw 'proper question' framed ascertain 'not parties compete, where, overlap, direct immediate.' 357, 1738. 31 examine around exist barriers significantly impede entry new competitors. National Bank commentators2 noted, designation perfect, markets extent interconnected, over barrier overcome disappear owing structural technological changes e.g., refrigeration widened 'perishable' foods. Thus, borrowers depositors operate something national banking market, likely confine themselves banks immediate neighborhood. Nevertheless, four-county metropolitan Some criteria cited supporting convenience location bank customers important limiting outsiders, defendant's region, administrative designations region 'area 359—361, 1740. See Tampa Elec. Nashville Coal 365 320, 327, 330—333, 81 623, 627, 580. 32 us my showing area3 measuring is, basis thus submitted, significant prevent outside entering those already marketing 33 preliminary matter, clear carry About 13% 1957, maintained breweries. brewery sold 31% 1957. beers area; indeed loading fourth meaningful antitrust context who 34 submitted high dominated Blatz, pattern local highest percapita consumption group maintaining without serious challenge sectors country.4 picture regional supported sell (exclusive transportation cost). Although subject costs, course persuasive local-market theory, 90% comes located nearby Minnesota. Indeed, closed down, brewed breweries, 'decentralization' efficient. advantage terms efficiency cost, wish brew areas structure reflected supports relevancy distinguishable beer. 35 essentially localized matter buttressed techniques used Beer fungible commodity wheat; differentiation important, ordinary choose particular brand rather purchase indiscriminately. demonstrates recognition successful program relies preference brands, built through intensive advertising promotional techniques. regarding efforts enter undeveloped way, inference inescapable say, Colorado, interested deal costly activity required sizable expected. addition, indicates distribution networks regional, statewide, levels. numerous examples specialized salesmanship needed induce retail carry, display, advertise brands 36 heavy emphasis competitor entrant prepared incur considerable expense creating network his compete parity 37 A factor, pervasive regulation promotion alcoholic beverages, well documented acceptability Methods permitted others. regulations govern labeling, size containers, content beer, shipping procedures, credit arrangements wholesalers. wishing start transporting Milwaukee; comply requirements, differ always dealt. itself distant competitors, reinforce factors examined justifying All this, taken proposition identifiable presenting impediments insulating consequences, means engage oligopolistic pricing practices real threat easily, reasonably short time, entrenched 39 emphasized faced here presentation On remand, appellees attempt refute introducing demonstrating asserted practice exist, seen light unimportant presently appreciably hindered III. trial court found viewing sustain disturb conclusion. pass sufficiency issue occasion reach view neither 41 For reasons erred dismissing 42 WHITE, 43 insofar holds whole. 44 FORTAS, 45 clearly complaint. ample well-defined cannot contrary statements cases, duty, plaintiff, 'market' claimed manifest. essential, element consistently this. See, 1502; 355—362, 1715, 1739. search frequently complicated elaborated beyond reason need—sometimes delay obstruction. nevertheless essential. snipe hunt. 46 situations, arithmetic companies' aggregate volume involved impressive. Sometimes, resulting conjoined great. unless 'substantially monopoly' specific authorized condemn acquisition. least respect, agree standard denigrated. Unless geographical carefully defined, analysis nor acceptable quality. majority dissenting opinions Grinnell Corp., 563, 1698, 778 (involving §§ Sherman Act). ways others: '(a) Actual potential eliminated; '(b) generally '(c) eliminated beer; '(d) alleged herein enhance detriment actual competition; '(e) Industry-wide increased.' Times-Picayune 345 594, 611, 73 872, 881, 97 L.Ed. 1277; E. Du Pont De Nemours & 351 377, 395, 76 994, 1007, 100 1264; 360, n. 37, 1739, 915. 270, 1478, 555; 510; 1715; El Paso Gas 376 651, 1044, 12; Alcoa, 377 271, 1283, 314; 1738; FTC Consolidated Foods 380 592, 85 1220, 95. addition Brown, 368—369, 1548. Bock, Mergers Markets 35—42 (1960); Kaysen Turner, Antitrust Policy 101—102 (1959); Martin, 321—322 (1959). simplicity, therefore Only one-third producers

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