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Pillsbury Co. v. Federal Trade Commission

United States Court of Appeals for the Fifth Circuit
354 F.2d 952 (1966)


Facts

Pillsbury Company (Pillsbury) (plaintiff) acquired the assets of two competing baking-product companies. The Federal Trade Commission (FTC) (defendant) received a complaint alleging that Pillsbury’s acquisition violated § 7 of the Clayton Act (Act), 15 U.S.C. § 18. The FTC dismissed the complaint, finding insufficient evidence of the effect of Pillsbury’s acquisition on competition in the industry. On appeal, the FTC reversed the dismissal and entered an interlocutory order, holding that violations of § 7 were not subject to the per se doctrine. The FTC allowed Pillsbury to introduce evidence that its acquisition had not damaged competition. While the parties were producing evidence, two House and Senate subcommittees on antitrust matters held hearings. FTC Chairman Howrey and the FTC’s general counsel, who later became the FTC chairman and wrote the FTC’s final order on the Pillsbury matter, testified at the subcommittee hearings. Pillsbury was specifically mentioned more than 100 times in the hearing transcripts. While questioning Chairman Howrey, members of Congress voiced strong opinions that the FTC had ruled incorrectly in the Pillsbury case and that Congress had intended for the per se doctrine to apply to violations of § 7. As a result of this questioning, Chairman Howrey recused himself from further work on the Pillsbury case. The FTC later issued an order directing Pillsbury to sell the assets of the acquired companies. Pillsbury petitioned the United States Court of Appeals for the Fifth Circuit for review.

Rule of Law

Issue

Holding and Reasoning (Tuttle, C.J.)

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