## Facts

- Continental Can Company, a leading U.S. metal-container producer, acquired all assets and goodwill of Hazel-Atlas Glass Company in 1956 in exchange for Continental stock and assumption of liabilities.
- Continental shipped roughly one-third of U.S. metal containers; Hazel-Atlas shipped about one-tenth of U.S. glass containers and ranked among the largest glass-container producers.
- The container sector included metal, glass, and plastic producers, with metal and glass containers competing for many of the same packaging uses (including beverages and foods).
- The United States alleged the acquisition violated § 7 of the Clayton Act because the effect of the acquisition may be substantially to lessen competition or to tend to create a monopoly.
- The Government advanced multiple proposed product markets, including markets defined by container type and by end uses where different container materials competed.

## Issues

1. Whether a “relevant line of commerce” under § 7 may be defined by substantial competition across different industries (metal and glass) when products compete for the same end uses.
2. Whether the acquisition created a reasonable probability that competition would be substantially lessened in one or more properly defined relevant product markets.

## Decision

- The Supreme Court reversed the district court’s dismissal and remanded for further proceedings.
- The Court held that inter-industry competition between metal and glass containers can supply the basis for defining a relevant product market under § 7.
- The Court concluded that, on the record presented, the acquisition violated § 7 because it created a reasonable probability of substantially lessening competition in a relevant line (or lines) of commerce that encompassed both metal and glass containers where they competed for the same end uses.
- The Court rejected the district court’s product-market approach that treated metal and glass containers as wholly separate lines of commerce despite substantial end-use substitution.

## Legal Principles

- A § 7 “line of commerce” is defined by the area of effective competition and may cut across conventional industry categories when different products compete for the same customers and uses.
- Competition protected by § 7 is not confined to rivalry among identical products; substantial end-use substitution and effective competitive interaction may justify a combined product market.
- The Government need not prove actual anticompetitive effects; § 7 is satisfied by showing a reasonable probability that the acquisition may substantially lessen competition.
- In evaluating probability of harm, courts consider market structure and concentration, including the elimination of an independent competitor and the trend toward concentration in already concentrated sectors.

## Conclusion

The Court held that § 7 reaches mergers between firms in different industries when their products compete for the same end uses, and it found the acquisition unlawful because it likely reduced competition by combining a dominant metal-can producer with a significant glass-container competitor in markets where metal and glass containers effectively competed.


United States v. Continental Can Co., 378 U.S. 441 (1964)