Amicus Brief: U.S. v. United States Sugar Corporation, et. al

November 8, 2022 Amicus BriefAnti-Monopoly Policies & Enforcement


American Economic Liberties Project (“AELP”) is an independent nonprofit organization that works to promote competition, combat monopolistic corporations, and advance economic liberty for all. AELP organizes and employs a diverse set of leading policy experts in areas impacted by concentrated power that include community development, the airline industry, international trade, and national security. It advocates for policies that address today’s crisis of concentration through legislative efforts and public policy debates. AELP submits this amicus brief because the antitrust laws cannot protect competition if merger challenges supported by clear evidence of incipient consolidation are rejected based on convoluted and unrealistic market definitions.

All parties consent to the filing of this amicus brief. No counsel for a party has authored this brief in whole or in part, and no party, party’s counsel, or any other person—other than amicus curiae or its counsel—has contributed money that was intended to fund preparing or submitting this brief.


Concentration of private economic power has reached extreme proportions in virtually every sector of the economy, from Big Tech to pharmaceuticals to telecommunications to agriculture. The dangers of economic concentration are well documented, including increased prices, lower quality products and services, underinvestment, restricted access to business ownership, and harm to workers.

Mergers and acquisitions have played a significant role in this erosion of competition, with the number of public companies falling by half since the 1990s, despite an economy that is one third larger today. In the decade prior to the pandemic, the percentage of reported transactions valued at over $1 billion has steadily increased.

No person engaged in commerce or in any activity affecting commerce…shall acquire the whole or any part of the assets of another person engaged also in commerce or in any activity affecting commerce, where in any line of commerce or in any activity affecting 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.

Congress crafted Section 7 with care. Prior to its amendment in 1950, the law only barred “the acquisition by one corporation of the stock of another corporation” that might harm competition. Brown Shoe, 370 U.S. at 312; FTC v. W. Meat Co., 272 U.S. 554, 563 (1926) (affirming that the original language of Section 7 did not apply when “all property and business of the two competing companies were acquired”). Companies quickly took advantage of this loophole, and in a 1948 report, the Federal Trade Commission urged Congress to close it, finding Section 7 “permit[ted] the continued growth of monopoly and concentration of economic power through mergers and acquisitions….[and] encourage[d] the achievement of monopolistic goals through the more enduring process of corporate consolidation.”

Congress responded with passage of the Celler-Kefauver Act in 1950, and thus was born the current language of Section 7. U.S. v. Phila. Nat’l Bank, 374 U.S. 321, 340 (1963). Section 7 created “authority for arresting mergers at a time when the trend to a lessening of competition in a line of commerce was still in its incipiency.” Brown Shoe, 370 U.S. at 317(emphasis added). That incipiency standard was strictly enforced throughout the 1960s. The Supreme Court understood that “Congress used the words ‘may be substantially to lessen competition’…to indicate that its concern was with probabilities, not certainties.” Id. at 323, quoted by FTC v. Penn State Hershey Med. Ctr. (“Hershey”), 838 F.3d 327, 337(3d Cir. 2016). “A requirement of certainty and actuality of injury to competition is incompatible with any effort to supplement the Sherman Act by reaching incipient restraints.” Id. at 323 n.39 (quotations omitted). Yet certainty is exactly what the district court demanded of Appellant (the “Government”) when it approved Appellee U.S. Sugar Corporation’s(“U.S. Sugar”) acquisition of Imperial Sugar Company (“Imperial”).

The district court’s rejection of the Government’s proposed markets ignores the plain language of Section 7 and conflates the elements of the Government’s case with the more stringent ones found in the Sherman Act. At bottom, Section 7’s incipiency standard was forgotten, and a potential trend toward even further consolidation will be permitted. The Imperial acquisition will, in the various proposed markets, put between 56% and 80% of the refined sugar production markets into the hands of two entities, allowing the merged company to soften competition, further collude with its closest competitor, and take one more dangerous step toward a monopoly. This is the embodiment of incipiency, where consolidation should be stopped before it reaches the potential for such harms. The district court’s blindness to that incipiency is only compounded by its decision to grant Appellees immunity from our antitrust laws, creating a rule that would gut enforcement and destroy competition in the sugar industry and beyond. The district court erred as a matter of law, and its ruling in Appellees’ favor should be reversed.