United States v. Baker Hughes, Inc.
United States Court of Appeals for the District of Columbia Circuit
908 F.2d 981 (1990)
Baker Hughes's subsidiary Secoma proposed merging with fellow underground drilling rig manufacturer Tamrock, and the government sued to block the merger, presenting prima facie evidence of increased market concentration; Secoma rebutted with evidence that the tiny, naturally concentrated market (only four sellers averaging 27 units annually) had stable prices, that buyers were highly sophisticated and careful, and that two new competitors had entered in 1989. The district court found Secoma had rebutted the government's prima facie case, and since the government offered no further evidence, ruled for Secoma; the government appealed.
Whether, to rebut a prima facie case of the anticompetitive effect of a horizontal merger, the defendant must show that the prima facie case inaccurately predicts that the merger will harm competition.