Federal Trade Commission v. H.J. Heinz Co.

H.J. Heinz Co. (defendant), the second-largest baby-food maker at 17.4 percent market share, agreed to merge with third-place Beech-Nut (15.4 percent share) in a market dominated by leader Gerber at 65 percent. Heinz argued the merger would let it more efficiently use an underutilized plant and improve product quality by sharing recipes with Beech-Nut, but offered no concrete data about the combined companies' actual production to support either claim. The FTC (plaintiff) sued to block the merger and sought a preliminary injunction; the district court denied it, crediting Heinz's claimed efficiencies as sufficient to offset any anticompetitive harm, and the FTC appealed.