U.S. v. Philadelphia National Bank case brief summary
FACTS The DOJ challenged the merger of the second and third largest banks in Philadelphia, which would have resulted in the four largest banks having approximately 77% of the geographic market.
HOLDING The Court ruled that a merger producing an unduly significant market share that significantly increases the concentration in the market is illegal absent a clear showing that the merger is not likely to have anticompetitive effects. The Court also noted that a fundamental purpose of the 1950 amendments to the Clayton Act was to arrest the trend toward concentration.
The Court rejected three
justifications for the merger: expansion into the suburbs could be
done organically without using mergers, there was no lack of
adequate banking facilities to justify merging in order to compete
with New York banks (not the case of two small firms merging to
compete with the leaders in their market),
and mergers that lessen competition cannot be saved merely because
it is beneficial by some other measurement.
Philadelphia National Bank
clearly enshrines the structural presumption, requiring a clear
showing of lack of anticompetitive effect to rebut the presumption.
Von’s Grocery Co. (1966)
and Pabst Brewing Co. (1966) prohibited mergers of chain
stores with 7.5% share but that may have threatened Mom & Pop
groceries and brewers with 24% in WI, 11% in the tri-state area, and
4.5% nationally; this was the high tide of the structural
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