Sanitizing agents are used to kill algae and bacteria in swimming pools. As of the time of

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Sanitizing agents are used to kill algae and bacteria in swimming pools. As of the time of the case described below, pool owners could use any of three sanitizing agents. One was liquid pool bleach; the other two were chemicals sold in dry form. These dry sanitizers are isocyanurates (ISOS) and calcium hypochlorite (CAL/HYPO). The chemical cyanuric acid (CA) is a precursor in the process of manufacturing ISOS. When CAL/HYPO is used as a sanitizer, CA is used along with it as a stabilizer. Olin Corporation was the market leader in CAL/HYPO production in the United States from 1980 through 1984, with a market share of 79 to 89 percent. Olin sought to increase its ability to produce and market ISOS. After technical problems doomed its attempts to produce CA and ISOS, Olin entered into a 1984 agreement under which it provided certain ISOS precursors to Monsanto Co., which then produced ISOS and provided them to Olin. Olin thus became a repackager of ISOS. 

In 1985, Olin and FMC Corporation entered into an agreement under which Olin was to purchase FMC’s swimming pool chemical business. The assets of that business included FMC’s sanitizers manufacturing plant in South Charleston, West Virginia. The South Charleston plant produced both CA and ISOS. Invoking Clayton Act § 7 and FTC Act § 5, the Federal Trade Commission challenged the acquisition. To avoid a possible order that would have prohibited the acquisition, Olin agreed to maintain the acquired assets in such a way that divestiture would be possible if the FTC issued a final decision finding that the acquisition violated antitrust laws. Olin and FMC therefore were permitted to consummate their transaction, pending final review by the FTC. After a hearing, the FTC administrative law judge (ALJ) concluded that the acquisition violated the Clayton and FTC Acts because it would likely result in a substantial lessening of competition in the relevant markets. On appeal, the FTC Commissioners (Commission) upheld the ALJ’s decision, including the ALJ’s order of divestiture. The Commission therefore ordered Olin to divest itself of the South Charleston plant it had acquired from FMC. Olin sought review from the U.S. Court of Appeals for the Ninth Circuit. A key issue was the identification of the relevant product market or markets. Olin argued that the only relevant product market consisted of ISOS by themselves. The FTC argued that, as the ALJ and Commission had determined, there was an additional relevant product market consisting of dry sanitizers that is, both ISOS and CAL/HYPO. Whose argument was correct, according to the Ninth Circuit?

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Business Law The Ethical Global and E-Commerce Environment

ISBN: 978-1259917110

17th edition

Authors: Arlen Langvardt, A. James Barnes, Jamie Darin Prenkert, Martin A. McCrory

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