Friday, January 17, 2014

United States v. Baker Hughes, Inc. case brief summary

United States v. Baker Hughes, Inc. case brief summary

Two companies that sold hardrock hydraulic underground drilling rigs (HHUDRs) had attempted to merge, but they were challenged by the DOJ.  The DOJ argued that the structural presumption can be rebutted only by a clear showing that the market entry would be quick and effective.

The Court ruled that while quick and effective entry would rebut a prima facie case, showing quick and effective entry was not a requirement to rebut the structural presumption. The Court additionally moved away from Philadelphia Bank and refused to require a “clear” showing disproving anti-competive effects especially when the prima facie case is easy to allege.

  • The Court is focused on analyzing the burden-shifting scheme here:
    1. The plaintiff shows that the transaction leads to undue concentration in the market (for a particular product in a particular geographical area).
    2. The defendant produces evidence to rebut presumption of substantially lessened competition.
    3. The plaintiff produces evidence of and persuades the court of an anti-competitive effect.
  • The Court ended up using a totality of the circumstances approach.
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