Re-opening the Door to Antitrust Standing: R.C. Bigelow, Inc. v. Unilever N.V.

St. John's Law Review Volume 64 Number 1 Volume 64, Fall 1989, Number 1 Article 6 April 2012 Re-opening the Door to Antitrust Standing: R.C. Bigelow, Inc. v. Unilever N.V. Robert F. Nostramo Follow this and additional works at: https://scholarship.law.stjohns.edu/lawreview Recommended Citation Nostramo, Robert F. (1989) "Re-opening the Door to Antitrust Standing: R.C. Bigelow, Inc. v. Unilever N.V.," St. John's Law Review: Vol. 64 : No. 1 , Article 6. Available at: https://scholarship.law.stjohns.edu/lawreview/vol64/iss1/6 This Comment is brought to you for free and open access by the Journals at St. John's Law Scholarship Repository. It has been accepted for inclusion in St. John's Law Review by an authorized editor of St. John's Law Scholarship Repository. For more information, please contact . RE-OPENING THE DOOR TO ANTITRUST STANDING: R.C BIGELOW, INC. v. UNILEVER N. V. In order to protect free enterprise from anticompetitive conduct,' a number of statutory prohibitions and remedies have been developed and codified in the antitrust laws. 2 Among the most important of these enactments is section 7 of the Clayton Acts (the "Act"), which prohibits any merger or acquisition 4 where the effect ' See T. BRUNNER, T. KRATTENMAKER, R. SKITOL, & A. WEBSTER, MERGERS IN THE NEW 6-7 (1985) [hereinafter ANTITRUST ERA]. When rivals "compete perfectly" goods are produced at maximum efficiency, with the least use of resources and at the least cost, so that the goods will be sold at the lowest price. Id. at 6. However, absent competition, there is no need for a firm to concern itself with maximum efficiency; instead it may maximize profits by selling at prices well above those it could charge in the presence of competitors. Id. at 7. The result is that some consumers may not have the means to purchase the higher priced goods for the very reason that the goods were not produced at maximum efficiency. Id. Thus, by protecting free enterprise and competition, the consumer is protected as well. Id. 2 Specifically, the antitrust laws include the following: 1. The Sherman Act, 15 U.S.C. §§ 1-2 (1982), whose purpose is to promote unrestrained competition so as to result in optimal resource allocation and, therefore, the lowest prices, see T. VAKERIcS, ANTITRUST BASICS § 1.01, at 1-1 to 1-2 (1985); 2. The Clayton Act, 15 U.S.C. §§ 12-27 (1982 & Supp. V 1987), whose purpose is to supplement the general provisions of the Sherman Act by addressing specific problems it overlooked, such as mergers and acquisitions, interlocking directorates, and exclusive dealing arrangements, see T. VAKERICS, supra, § 1.01, at 1-3, § 1.0212], at 1-6 to 1-7; 3. The Robinson-Patman Act, 15 U.S.C. §§ 13(a)-(f) (1982), embodied in § 2 of the Clayton Act, prohibiting certain instances of price discrimination, see T. VAKERICS, supra, § 1.02, at 1-7 to 1-8; and 4. Section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45(a) (1982 & Supp. 1989), which strengthens the authority of the federal government to proceed against a broad range of potentially anticompetitive practices, see T. VAKERICS, supra, § 1.02[4], at 1-9. The antitrust laws focus primarily on the conduct of market participants rather than on the market structure per se, id. § 1.01, at 1-4, striking at conduct such as collusion, unreasonable refusal to associate with competitors, distribution restriction, resale price fixing, monopolization, and participation in certain mergers and acquisitions. See B. KELLMAN, PRIVATE ANTITRUST LITIGATION 36, 66, 92-93, 107, 161, 189 (1985). - 15 U.S.C. § 18 (1982 & Supp. V 1987). See Lewyn & Mann, Ten Years Under the New Section 7 of the Clayton Act: A Lawyer's PracticalApproach to the Case Law, 36 N.Y.U. L. REV. 1067, 1073-1074 (1961). Mergers can be divided into three classes: horizontal, vertical, or conglomerate. Id. Horizontal mergers are mergers between manufacturers of the same product. Id. They disadvantage consumers in that they eliminate one alternative source of supply. Id. Vertical mergers involve the merging of a manufacturer with its supplier. Id. Not only do competing suppliers ANTITRUST ERA 1989] ANTITRUST STANDING "may be substantially to lessen competition, or to tend to create a monopoly."' 5 Section 4 of the Act provides that a party aggrieved lose a potential customer, but, alternatively, competing manufacturers may find that their supply source has been eliminated or that the merging manufacturer now has an advantage arising out of operating economies. Id. In a conglomerate merger, two firms at different functional levels in different product or geographic markets join together. Id. The resulting firm's increased resources may create a significant competitive advantage. See id. Antitrust laws governing mergers provide protection only from anticompetitive behavior, not from increased or vigorous competition. See Brunswick Corp. v. Pueblo Bowl-OMatic, Inc., 429 U.S. 477, 488 (1977); see also Brown Shoe Co. v. United States, 370 U.S. 294, 344 (1962) (antitrust laws protect competition, not competitors). Therefore, the antitrust laws provide no relief where a firm drives competitors out of business or monopolizes a particular market merely by exercising superior skill. See Cargill, Inc. v. Monfort of Colo., Inc., 479 U.S., 104, 116 (1986). Inherent in any merger is the potential for economic adjustments adversely affecting competition. See Brunswick, 429 U.S. at 487. For instance, mergers may act to decrease consumer choice without increasing industry capacity, jobs, or output. Brown Shoe, 370 U.S. at 345 n.72. Nevertheless, mergers can serve important economic functions, such as penalizing inefficient management, aiding the efficient flow of investment capital and maximizing resource allocation. See United States Dep't of Justice Merger Guidelines, 49 Fed. Reg. 26,823, 26,827 (1984) [hereinafter 1984 Merger Guidelines]. 5 15 U.S.C. § 18 (1982 & Supp. V 1987). Section 7 reads in pertinent part: "No person engaged in commerce shall ... acquire, directly or indirectly, the whole or any part of the stock or... assets of another person engaged also in commerce ... where ... the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly." Id. Monopoly power is said to exist where a product is controlled by a single interest and there are no reasonable substitutes available for the product. United States v. E.I. duPont de Nemours & Co., 351 U.S. 377, 391-92 (1956). However, merely possessing monopoly power does not "ipso facto condemn a market participant." Berkey Photo, Inc. v. Eastman Kodak Co., 603 F.2d 263, 275 (2d Cir. 1979), cert. denied, 444 U.S. 1093 (1980). Before the Clayton Act was passed in 1914, mergers had been challenged by the federal government as violative of the Sherman Act, but without much success. ANTITRUST ERA, supra note 1, at 3. The difficulty lay in the fact that the Sherman Act was aimed at the realization, as opposed to the (...truncated)