Temple Anthracite Coal Co. v. Federal Trade Commission

WOOLLEY, Circuit Judge

(dissenting).

I am moved to dissent from the judgment •of the court because of the different way in which I view the pivotal point of the ease. Of the facts, fully and correctly stated in the opinion, I shall stress but two.

One fact is that the complaint charges a violation of the single provision of section 7 of the Clayton Act (15 USCA § 18) which forbids the acquisition of two corporations by a third “where the effect of such acquisition * * * may be to substantially lessen competition between such corporations. . * * ” The restraint of trade and monopoly provisions of the section were not invoked and are not involved.

The other faet is that prior to their acquisition by the petitioner in 1924 the two coal companies conducted business under like sales systems, through like sales agencies, with a like power reserved by each to decide when it would and would not fill orders for coal according as it found them satisfactory or unsatisfactory. Prior to the consolidation, these corporations were selling in the same markets in competition with each other.

Thus far I follow the opinion of the court. But the petitioner — the holding company-on a showing that the same sales systems operating through the same sales agencies continue in the business practices of the two companies since their acquisition, contends that, in consequence, the same competition exists — must exist — as before. This contention the court has sustained. It is just here that I am constrained respectfully to depart from its opinion for the reason that, while the two underlying, companies before their absorption could, because of their complete independence, separately refuse orders that were unsatisfactory without disturbing competition between them, the power to decide when to accept and refuse orders passed from them on their acquisition by the petitioner and became vested in the petitioner which thereafter could alone determine when orders were unsatisfactory and by directing its self-appointed officials of the two corporations to decline such orders would “substantially lessen competition” — indeed, actually end competition — between the two corporations. Therefore the competition between the underlying companies is not now even potentially the competition which existed between them before their acquisition by the petitioner. Then it was real; now it is formal. Then it arose from the desire of each for individual gain and depended on separate action; now it arises from the desire of a third corporation for gain and depends on the power of that corporation, exercised without restraint, to increase its gain by reducing loss*662es arising from competition between wbat are now practically its own products by directing its subsidiaries not to fill orders. The petitioner thus has power, ever present, to be exercised at its will, to do the thing denounced by the law. In my judgment, when the petitioner acquired the underlying coal companies and at the samé time acquired the power to cause them to decline unsatisfactory orders, there was a complete transfer of power with respect to competition, producing a situation “where the effect * * * may be to substantially lessen competition between such corporations” and certainly will be to lessen or stop competition whenever the temptation to use the power shall arise.

In arriving at the conclusion that the evidence sustains the order of the Commission I have kept in view the fact, at different times lost sight of in this case, that we are not concerned with the lessening of competition between these two companies and other companies in the industry, but are concerned with the lessening of competition between the two companies themselves.