Polypore and Microporous Products both produced battery separators. Polypore primarily manufactured pure polyethylene separators for use in automotive batteries. The much smaller producer, Microporous, manufactured pure rubber battery separators for use in deep-cycle batteries.
Microporous was recognized as being the industry standard for deep-cycle batteries.
In February 2008, Polypore sought to acquire Microporous, but the Federal Trade Commission issued an administrative complaint. The commission held that Polypore’s acquisition of Microporous would substantially lessen competition, leading to the creation of a monopoly in the applicable market.
Polypore appealed the decision of the commission, arguing that the commission erred in labeling the acquisition as a horizontal merger.
1. How did the court rule on appeal?
2. When is an acquisition treated as a horizontal merger?