Chicago Bridge & Iron Co. v. Federal Trade Commission
United States Court of Appeals for the Fifth Circuit
534 F.3d 410 (2008)
- Written by Jamie Milne, JD
Facts
Chicago Bridge & Iron Company (CB&I) (plaintiff) and Pitt-Des Moines, Inc. (PDM) both designed and manufactured industrial storage tanks for liquified gases and thermal vacuum chambers for testing satellites. For decades, CB&I and PDM were the two dominant suppliers in the relevant markets. When CB&I acquired PDM’s assets in 2001, the Federal Trade Commission (FTC) (defendant) concluded that the acquisition was likely to substantially lessen competition in the markets and therefore violated § 7 of the Clayton Act. The FTC’s conclusion was based on the high market concentration and evidence of high entry barriers preventing newcomers from offsetting the competition lost via the acquisition. The high entry barriers stemmed from the industry’s high specialization, regulatory hurdles, and customer expectations of significant experience that took years to develop. CB&I argued that evidence of recent actual and potential entry into the markets rebutted the argument that high market concentration and barriers to entry would necessarily strengthen the likelihood of anticompetitive effects. The FTC disagreed and ordered CB&I to divest the PDM assets. CB&I appealed that order.
Rule of Law
Issue
Holding and Reasoning (Dinnis, J.)
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