Robert H. Lande (University of Baltimore - School of Law), John M. Newman (University of Miami - School of Law), & Rebecca Kelly Slaughter have posted The Forgotten Anti-Monopoly Law: The Second Half of Clayton Act § 7 (Texas Law Review, Vol. 103, 2024) on SSRN. Here is the abstract:
Section 7 of the Clayton Act is a bedrock of antitrust law. Its text prohibits mergers and acquisitions whose effect “may be substantially to lessen competition, or to tend to create a monopoly.” Over the course of more than a century, enforcers have litigated hundreds of cases under this provision. Yet the overwhelming majority of judicial decisions, formal agency guidance, speeches by prominent enforcers, and scholarly articles have focused exclusively on the first clause of the statute. Half of the key language in a core anti-monopoly law has gone almost entirely overlooked.
This Article fills that void. A rigorous textualist analysis, confirmed by case law and the statute’s legislative history, reveals that § 7’s second prong bars all mergers that may move a market appreciably towards monopoly. Unlike the first prong, the second contains no quantum-of-harm requirement or effect-on-competition requirement. As a result, the second prong imposes a distinct and powerful prohibition. We identify a number of factual settings in which this statutory bar has unique force, offers analytical advantages, or both. We also find that the federal antitrust agencies’ 2023 Merger Guidelines, which explicitly address mergers that may tend to create a monopoly, better reflect the law in this area than previous agency guidance.
The second half of Clayton Act § 7 is not only good law, but also rests on good policy. Together, the statute’s two prongs impose a sliding-scale framework that can reduce costly errors. Monopolized markets can harm a wide variety of stakeholders, from consumers and small businesses to workers, farmers, and other suppliers. With § 7’s long-dormant second half finally activated, this foundational statute may yet live up to its full potential.
