Whole Foods/Wild Oats Merger: - The Arthur Page Society

which owned nearly 98 percent of the market, did not violate the law because control of
manufacturing did not necessarily indicate control of trade. This ruling raised questions as
to the validity of the Sherman Act. 30
As a result, Congress passed the Clayton Antitrust Act, an amendment to clarify what
constitutes an ‘unreasonable’ trade agreement and to seal loopholes in the preceding law.
4.4. The Clayton Antitrust Act & The Federal Trade Commission (1914)
The Clayton Act was enacted during President Theodore Roosevelt’s “trust‐busting”
campaign in 1914. Besides prescribing a clearer interpretation of the Sherman Act, the law
prohibited specific business practices that Congress deemed to be unfair. This included
discriminating prices, tying contracts, allowing board members to acquire stock in
competing firms and interlocking directorates (when an individual sits on the boards of
companies in opposition). 31
In addition to these provisions, Section 7 of the Clayton Act directly addressed the
issue of mergers and acquisitions. It stated:
That no corporation engaged in commerce shall acquire, directly or indirectly, the
whole or any part of the stock or other share capital of another corporation engaged
also in commerce, where the effect of such acquisition may be to substantially lessen
competition between the corporation whose stock is so acquired and the corporation
making the acquisition, or to restrain such commerce in any section or community, or
tend to create a monopoly of any line of commerce. 32
That same year, Congress also passed the Federal Trade Commission Act, which
established the Federal Trade Commission (FTC) as the definitive body to enforce antitrust
laws. In conjunction with the Department of Justice, which was previously ill‐equipped to
pursue antitrust violations, the FTC was given the responsibility of investigating ”unfair
methods of competition,” as well as the authority to issue cease and desist orders to
companies engaging in “unfair or deceptive acts or practices.” 33 This meant that the
Department of Justice and the FTC could dismantle an organization if an investigation
shows that the company broke the law.
4.5. Additional Antitrust Laws
Subsequent laws were passed in order to strengthen regulations on shady business
practices. The Robinson‐Patman Act of 1936 strengthened restrictions on price
discrimination, or offering different prices to select customers. 34 In 1950, the Cellar‐
Kefauver Act supplemented the Clayton Act to include acquisitions of assets when the
intent is to decrease competition. 35
Moreover, the Hart‐Scott‐Rodino Antitrust Improvements Act of 1976 (HSR)
established the Premerger Notification Program, which requires all large mergers and
acquisitions to be reviewed by the FTC before a deal can be settled. Essentially, the HSR Act
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