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Section 7 of the Clayton Act, as amended, 15 U.S.C.S. § 18, does not require proof that a merger or other acquisition has caused higher prices in the affected market. All that is necessary is that the merger create an appreciable danger of such consequences in the future. A predictive judgment, necessarily probabilistic and judgmental rather than demonstrable is called for.
Appellant Hospital Corporation of America, the largest proprietary hospital chain in the United States, acquired Hospital Affiliates International, Inc. and Health Care Corporation, resulting in its ownership or management of 5 of the 11 hospitals in Chattanooga, Tennessee. The Federal Trade Commission (FTC) held that appellant violated § 7 of Clayton Act, as amended, 15 U.S.C.S. § 18. Appellant challenged the decision.
Under the circumstances, did appellant violate § 7 of Clayton Act, as amended, 15 U.S.C.S. § 18 by acquiring two hospitals and by assuming contracts to manage others?
The court affirmed the decision of the FTC. Considering the concentration of the market, the absence of competitive alternatives, the regulatory barrier to entry, the low elasticity of demand, the exceptionally severe cost pressures, the history of collusion in the industry, and the sharp reduction in the number of substantial competitors in the market brought about by acquisition of 4 out of 11 hospitals in the city, the court could not say that the Commission's decision was not supported by substantial evidence. The Commission's order for advanced notification of future acquisitions was not unreasonable. The Commission had broad discretion, akin to that of a court of equity, to decide what relief was necessary to cure a violation of law.