United States v. Connecticut National Bank

Mr. Justice White, with whom Mr. Justice Douglas, Mr. Justice Brennan, and Mr. Justice Marshall join,

concurring in part and dissenting in part.

Although I agree with Part I of the majority opinion, as to the relevant line of commerce, I dissent from that part of the opinion dealing with the determination of a relevant geographic market.

The Court holds that “the relevant geographic market of the acquired bank is the localized area in which that bank is in significant, direct competition with other banks, albeit not the acquiring bank,” relying on a statement to similar effect in United States v. Marine Bancorporation, Inc., ante, p. 602. Accordingly, the Court rejects the proposition, which the appellee banks accepted *674below,* that the merger of FNH and CNB should be analyzed in terms of its effect on possible potential competition in areas not in or adjacent to the New Haven and Bridgeport markets, however those markets are to be defined.

There is certainly nothing in this Court’s past cases on mergers under Clayton § 7 which requires this result. Even if Bridgeport and New Haven are relevant geographic markets, there can be more than one relevant geographic market in which to test the possible effects of a merger. Section 7 of the Clayton Act speaks to lessening competition “in any section of the country” (emphasis added), and as the majority acknowledges in Marine Ban-corporation, ante, at 621 n. 20, in United States v. Pabst Brewing Co., 384 U. S. 546 (1966), the Court “held that the Government had established three relevant markets in which the acquired firm actually marketed its products — a single State, a multi-state area, and the Nation as a whole.” To be sure, the selection of any relevant geographic market in a banking case must be chosen in terms of the needs of the customers and the area in which sellers operate, United States v. Philadelphia National Bank, 374 U. S. 321, 357-359 (1963), but this may result in several possible markets, especially in a potential-competition case where a merger might affect the economic behavior of existing firms in various markets.

As I read the majority opinion, if one assumed that FNH and CNB were the two largest banks in Connecticut, and, although located in southwest Connecticut, both had the capability and interest to enter a concentrated banking market in northeast Connecticut, it would be improper for the Government to oppose their merger, since *675neither bank had as yet entered the northeast Connecticut banking market. The majority describes the possibility of such dual entry as “too speculative.” Ante, at 673. What is a relevant geographic market is an issue entirely distinct from who is a potential competitor. It is obvious, for example, that while New Haven and/or its environs is a relevant market of banking competition, it may nonetheless be true that CNB may not prove to be a potential competitor with respect to that market. It, therefore, follows that whether the banking market in northeast Connecticut is a relevant banking market, is a question entirely separate from whether FNH and/or CNB should be considered potential competitors in that market, and whether the elimination of one of those competitors lessens either the possibility of deconcentration in that market or, under the “wings theory,” affects present competition in that market. Since the majority professes to leave issues of potential competition to the District Court on remand, it should not preclude a finding that this merger will affect banking competition in areas of the State other than Bridgeport or New Haven. The possibility of finding many banking markets in Connecticut is an entirely separate matter from finding one banking market in the State under a theory of statewide linkage of oligopolies. The latter assumes that a section of the country need not be a banking market; the former does not.

I agree that the case should be remanded. As I understand the task of the District Court, once it has decided what the relevant geographic markets are, the case is to be analyzed in terms of the “wings theory” of potential competition enunciated in United States v. Falstaff Brewing Corp., 410 U. S. 526 (1973), and the deconcentration theory now accepted by this Court in Marine Bancorpo-ration. As to these matters, I adhere to my views as stated in Marine Bancorporation.

One of the principal witnesses presented by the appellee banks, Dr. Peck, analyzed the effect of this merger, and the removal of ENH as a potential competitor, along with CNB, on the various banking markets in the State.