US SUPREME COURT DECISIONS

The United States charged that the acquisition in 1960 by Von's Grocery Company of Shopping Bag Food Stores, a competitor in the retail grocery market in the Los Angeles area, violated § 7 of the Clayton Act. After a hearing, the District Court concluded that there was "not a reasonable probability" that the merger would tend "substantially to lessen competition" or "create a monopoly" in violation of § 7, and entered judgment for the appellees.

Held. The merger of two of the largest and most successful retail grocery companies in a market area characterized by a steady decline, before and after the merger, in the number of small grocery companies, combined with significant absorption of small firms by larger ones, is a violation of § 7 of the Clayton Act. Pp. 384 U. S. 274-279.

(a) By the enactment of the Celler-Kefauver amendment to § 7 in 1950, Congress sought to preserve competition among small businesses by halting a trend toward concentration in its incipiency, and, thus, the courts must be alert to protect competition against increasing concentration through mergers especially where concentration is gaining momentum in the market. Pp. 384 U. S. 276-277.

(b) This case presents the precise situation which Congress intended to proscribe, where two powerful companies merge to become more powerful in a market exhibiting a marked trend toward concentration. Pp. 384 U. S. 277-278.

(c) Section 7 requires not only an appraisal of the immediate impact of the merger on competition, but a prediction of the merger's effect on competitive conditions in the future, to prevent the destruction of competition. United States v. Philadelphia Nat. Bank, 374 U. S. 321, 374 U. S. 362. P. 384 U. S. 278.

(d) Since the appellees were on notice of the antitrust charge, the judgment is reversed, and the District Court is directed to order divestiture without delay. P. 384 U. S. 279.

233 F.Supp. 976, reversed. chanrobles.com-red

Page 384 U. S. 271