Federal Trade Commission v. Procter & Gamble Co.
Supreme Court
386 U.S. 568 (1967)
Procter & Gamble Co. (defendant), the leading detergent maker spending $127 million a year on advertising, acquired Clorox Chemical Company (co-defendant), the dominant liquid-bleach maker with a near-48.8-percent national market share and near-monopoly positions in several regions, spending only $5.4 million a year on its own advertising before the merger. P&G had not previously sold liquid bleach itself, but was actively looking to expand into complementary product lines, and liquid bleach was a natural complement to its existing detergent business; the FTC (plaintiff) found the merger unlawful and ordered it undone, and the court of appeals reversed.
Whether a merger between two companies that did not previously compete against each other in the target market may still violate antitrust law where it eliminates potential competition and raises barriers to entry.