Fruehauf Corporation v. Federal Trade Commission
Second Circuit
603 F.2d 345 (1979)
Fruehauf Corporation (defendant), the largest U.S. truck-trailer manufacturer, purchased 5.8 percent of all truck wheels sold and acquired Kelsey, which manufactured 15 percent of the truck-wheel market. The FTC (plaintiff) sued, arguing the acquisition would let Kelsey favor Fruehauf during any wheel shortage over Fruehauf's competitors and would let Fruehauf's exclusive purchasing from Kelsey raise barriers to entry for other wheel sellers; but during an actual post-merger wheel shortage, Kelsey had sold wheels evenly to all its customers. The FTC found a Clayton Act violation, and Fruehauf appealed.
Whether the FTC established a reasonable probability of competitive harm, in either the wheel-purchasing or wheel-selling market, sufficient to find a vertical merger unlawful under the Clayton Act.