United States v. Penn-Olin Chemical Company

Facing rising sodium-chlorate demand in the southeastern United States, Pennsalt Chemicals (defendant) and Olin Mathieson Chemical Corporation (defendant), both considering independently expanding into that market, instead formed a joint venture, Penn-Olin Chemical Company (defendant), to build a Kentucky plant. The government sued, alleging the joint venture violated § 7 of the Clayton Act by eliminating potential competition between the two firms; the district court found both firms had the independent ability to enter the market separately, but that it was not probable both would actually have done so and competed against each other, and on that basis held the joint venture did not substantially lessen competition.