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74 Harv. L. Rev. 226 (1960-1961)
Section 7 of the Clayton Act and the Merging of Law and Economics

handle is hein.journals/hlr74 and id is 260 raw text is: SECTION 7 OF THE CLAYTON ACT AND THE
Derek C. Bok *
Professor Bok argues that present interpretations of section 7, which
seek to predict accurately the effects of particular mergers, not only
fail to achieve their goal, but also result in an overburdening of courts
and agencies, seriously impair the statute's value as a guide to busi-
nessmen, and impede effectuation of congressional policy. After an
examination of the background of the statute, he concludes that the
interpretation which would best utilize available economic knowledge
without disregarding the limitations and objectives of the law would
be one which selects, in particular contexts, a single significant factor
as the standard of legality.
J UST over a decade has passed since the Congress patched the
badly worn seventh section of the Clayton Act so as to forbid
any corporation from absorbing all or any part of another com-
pany where the effect thereof may be substantially to lessen
competition or to tend to create a monopoly. 1 The great major-
ity of proceedings that have arisen under this section have in-
volved mergers between competing companies. Nevertheless, the
Supreme Court has not yet had serious occasion to come to grips
with a case of this sort.2 As a result, despite a spate of opinions
* Assistant Professor of Law, Harvard University. A.B., Stanford, x95 ; LL.B.,
Harvard, 1954; M.A., George Washington, 1958.
164 Stat. 1125 (195o), 15 U.S.C. § x8 (1958), amending 38 Stat. 73, (1914).
The section provides in relevant part:
No corporation engaged in commerce shall acquire, directly or indirectly,
the whole or any part of the stock or other share capital and no corporation
subject to the jurisdiction of the Federal Trade Commission shall acquire the
whole or any part of the assets of another corporation engaged also in com-
merce, where in any line of commerce in any section of the country, the
effect of such acquisition may be substantially to lessen competition, or to tend
to create a monopoly.
The original § 7 proved almost entirely ineffective in preventing mergers,
largely because of the failure of the statute to cover acquisitions of assets as well
as stock. The history of the enactment of the original section and its subsequent
application by the courts and the Federal Trade Commission is recounted in
' The Supreme Court has confronted one horizontal merger under the amended
section, but the facts of the case were so clear-cut from the standpoint of § 7
that the Court merely affirmed the lower court without discussing the meaning of
the statutory language. Maryland & Va. Milk Producers Ass'n v. United States,
362 U.S. 458 (196o).

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