686 F.3d 1208
11th Cir.2012Background
- Polypore International acquired Microporous in February 2008, triggering FTC § 7 review.
- Polypore and Microporous produced battery separators for SLI, motive, and deep-cycle batteries; Microporous planned expansion and had Austrian plant Feistritz not yet operational.
- Pre-merger market structure: Microporous controlled 90% of deep-cycle with Flex-Sil; Daramic (Polypore) controlled 90% of motive and 10% of deep-cycle; Entek competed in SLI with Daramic.
- FTC charged that the merger could substantially lessen competition or create a monopoly in several separator markets and ordered divestitures, including the Austrian plant.
- Administrative law judge found likely substantial lessening of competition; Commission affirmed on three markets, modified divestiture to include assets, and Polypore appealed.
- Court affirmatively upheld the Commission’s treatment of the merger, the single deep-cycle market, the non-entry finding for Entek in the motive market, and the Austrian plant divestiture.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Microporous was an actual competitor in SLI market and the Philadelphia National presumption applies | Polypore argues Microporous was not yet a competitor; use only potential-competition analysis. | Polypore contends the Commission misapplied the presumption by treating Microporous as an actual competitor. | Philadelphia National presumption applied; merger likely illegal. |
| Whether there was a single deep-cycle market, not separate from other markets | Polypore asserts deep-cycle and related products are distinct markets. | Microporous and Polypore evidence show interchangeable pricing and customers across these products. | There existed a single deep-cycle market. |
| Whether Entek would enter and counteract in the motive battery market | Polypore contends Entek would enter motive market and counteract the merger. | Entek did not engage in motive-separator production or credible entry plans. | Entek would not enter the motive market; no counteraction found. |
| Whether the Austrian plant should be included in the divestiture | Polypore argues Austrian plant is unnecessary and outside NA markets; divestiture excessive. | Division of multiple plants ensures effective competition restoration and supply resilience. | Austrian plant properly included; remedy affirmed. |
Key Cases Cited
- United States v. Philadelphia National Bank, 374 U.S. 321 (1963) (elaborates the Section 7 concentration concern and presumptions)
- United States v. El Paso Natural Gas Co., 376 U.S. 651 (1964) (probabilities-based anticompetitive concerns; nascent rivals matter)
- United States v. Marine Bancorporation, 418 U.S. 602 (1974) (elaborates actual vs. potential competitor framework)
- FTC v. Univ. Health, Inc., 938 F.2d 1206 (11th Cir. 1991) (evidence standard for market impact in mergers)
- Universal Camera Corp. v. NLRB, 340 U.S. 474 (1951) (standard for reviewing evidentiary sufficiency)