Two coal firms merged, with shares roughly equivalent to those in Von’s Grocery, and were challenged by the Department of Justice (DOJ).
Nonetheless, the Court noted that the market share and a company’s past ability to produce was not conclusive proof of market power, particularly in the coal industry, which relied upon long-term contracts and where the strength of its reserves was the best indicator of market power.
- This case holds that the structural presumption (of market concentration equating market power) is rebuttable.
- This case could be read as a limited exception—where the market must be measured in the appropriate units—or as a broad exception—anything that shows market shares do not reflect market power is admissible.
- After General Dynamic, the Attorney General revised the merger guidelines to preserve the presumption, but also to allow more room for rebuttal.
- General Dynamics was a “flailing” firm, which was extremely unlikely to become competitive, much less dominant, because of the merger. Consequently, General Dynamics may suggest that any merger with a failing firm will not be anti-competitive.
- This was the last decision the Supreme Court made on mergers.
Suggested law school study materials
Shop Amazon for the best prices on Law School Course Materials.