Word: claytons
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Dates: during 1950-1959
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Ever since the U.S. Supreme Court ruled that Du Font's 40-year-old ownership of 23% of General Motors stock violated the 1914 Clayton Act (TIME, June 17), U.S. businessmen have been fretting over just how far the Justice Department will try to push the new decision. Last week they could breathe a little easier. In a carefully prepared speech Robert A. Bicks, a top member of the Justice Department's Antitrust Division, told the American Bar Association that the Government would take a long, hard look before trying to upset other longstanding affiliations. Said Bicks...
...Pont case the majority of the court tortured the Clayton " ct to arrive at its decision. The opinion of the minority was not only good law but. was ?rood. sound, common sense. In the Jencks case the decision went far beyond the issues noon which the court was called to decide. It seems to me to have been a gratuitous slap in the face to Government law-enforcement agencies, particularly the honored and respected FBI. It will aid and encourage subversives in their nefarious designs against the integrity of our country...
...Warren, Brennan, Black and Douglas)† overruled Judge LaBuy. Completely bypassing the Government's main charges-that Du Pont had violated the 1890 Sherman Act by fencing off the G.M. market from Du Font's competitors-the court based its decision on Section 7 of the 1914 Clayton Act, to which Government lawyers had devoted only six pages of their 100-page brief and only perfunctory oral argument. Section 7 bars a corporation from acquiring stock in another, "where the effect of such acquisition may be [to restrain commerce] or tend to create a monopoly of any line...
...previous cases Section 7 had been applied soon after the acquisition, and many a lawyer agreed with Burton that by applying it 30 years after the fact, the court had opened up a new field of antitrust prosecutions (see BUSINESS). "Over 40 years after the enactment of the Clayton Act," wrote Burton, "it now becomes apparent for the first time that Section 7 has been a sleeping giant all along. Every corporation which has acquired a stock interest [in a customer or supplier since 1914] is exposed, retroactively, to the bite of the newly discovered teeth...
...guide, is that some court in some future year be persuaded that a 'reasonable probability' then exists that an advantage over competitors in a narrowly construed market may be obtained as a result of a stock interest." Moreover, added Burton, the decision marked the first time the Clayton Act has been applied to a vertical acquisition, i.e., a case where a company gets substantial control of a customer rather than a competitor...