United States v. Penn-Olin Chemical Company/Opinion of the Court

Pennsalt Chemicals Corporation and Olin Mathieson Chemical Corporation jointly formed Penn-Olin Chemical Company to produce and sell sodium chlorate in the southeastern United States. The Government seeks to dissolve this joint venture as violative of both § 7 of the Clayton Act and § 1 of the Sherman Act. This direct appeal, 32 Stat. 823, 15 U.S.C. § 29, from the United States District Court for the District of Delaware, raises two questions. First, whether § 7 of the Clayton Act is applicable where two corporations form a third to engage in a new enterprise; and, second, if this question is answered in the affirmative, whether there is a violation of § 1 or § 7 under the facts of this case. The trial court found that the joint venture, on this record, violated neither of these sections and found it unnecessary to reach the first question. 217 F.Supp. 110. In view of the importance of each of these questions in the administration of the antitrust laws, we noted probable jurisdiction. 375 U.S. 938, 84 S.Ct. 350, 11 L.Ed.2d 270. We have concluded that a joint venture as organized here would be subject to the regulation of § 7 of the Clayton Act and, reaching the merits, we hol that while on the present record there is no violation of § 1 of the Sherman Act, the District Court erred in dismissing the complaint as to § 7 of the Clayton Act. Accordingly, the judgment is vacated and remanded for further consideration.

1. LINE OF COMMERCE, RELEVANT MARKET, ETC.

At the outset it is well to note that some of the troublesome questions ordinarily found in antitrust cases have been eliminated by the parties. First, the line of commerce is a chemical known as sodium chlorate. It is produced commercially by electrolysis of an acidified solution of sodium chloride. All sodium chlorate of like purity is usable interchangeably and is used primarily in the pulp and paper industry to bleach the pulp, making for a brighter and higher quality paper. This is done by using the sodium chlorate as a principal raw material to generate chlorine dioxide, a gaseous material which bleaches cellulose fibers to a maximum whiteness with minimum loss of strength. The pulp and paper industry consumes about 64% of total production of sodium chlorate. The chemical is also employed in the production of herbicides, agricultural chemicals and in certain derivatives, such an ammonium perchlorate. Next, the relevant market is not disputed. It is the southeastern part of the United States. Nor is the fact that Olin has never engaged in the commercial production of sodium chlorate contested. It has purchased and does purchase amounts of the chemical for internal consumption and has acted as sales agent for Pennsalt in the southeastern territory under contracts dated in December 1957 and February 1958. Olin also owns a patented process for bleaching pulp with chlorine dioxide. This process requires sodium chlorate and has been widely used by paper manufacturers under royalty-free licenses.

In additionThe record shows that while Olin and Pennsalt are in competition in the production and sale of nonchlorate chemicals, only one was selected as a 'guinea pig' in the District Court to determine if the alleged violations extended to those chemicals. This was calcium hypochlorite, used in the production of pulp and paper. The trial court found that the joint venture was limited to sodium chlorate and that the joint venture plant which was built at Calvert City was constructed to produce sodium chlorate only. In the jurisdictional statement the Government indicated that it might argue that the joint venture also had an illegal impact on the calicum hypochlorite line of commerce, but this was not raised in the brief or at argument on the merits.

2. THE COMPANIES INVOLVED.

Pennsalt is engaged solely in the production and sale of chemicals and chemical products throughout the United States. Its assets are around a hundred million dollars and its sales are about the same amount. Its sodium chlorate production is located at Portland, Oregon, with a capacity of some 15,000 tons as of 1959. It occupied 57.8% of the market west of the Rocky Mountains. It has marketed sodium chlorate in the southeastern United States to some extent since 1957. Its shipments into that territory in 1960 were 4,186 tons of which Olin sold 3,202 tons on its sales agency ontract.

Olin is a large diversified corporation, the result of a merger of Olin Industries, Inc., and Mathieson Chemical Corporation in 1954. One of its seven divisions operates plants in 15 States and produces a wide range of chemicals and chemical products accounting for about 30% of Olin's revenues. Olin's sales in 1960 grossed some $690,000,000 and its total assets were $860,000,000.

Penn-Olin was organized in 1960 as a joint venture of Olin and Pennsalt. Each owns 50% of its stock and the officers and directors are divided equally between the parents. It plant at Calvert City, Kentucky, was built by equal contribution of the two parents and cost $6,500,000. It has a capacity to produce 26,500 tons of sodium chlorate annually and began operations in 1961. Pennsalt operates the plant and Olin handles the sales. Penn-Olin deals in no other chemicals.

3. BACKGROUND AND STATISTICS OF THE INDUSTRY.

Prior to 1961 the sodium chlorate industry in the United States was made up of three producing companies. The largest producer, Hooker Chemical Corporation, entered the industry in 1956 when it acquired Oldbury Electro Chemical Company, which had been producing sodium chlorate for over half a century. Hooker now has two plants, one in the relevant marketing area at Columbus, Mississippi, which originally had a capacity of 16,000 tons but which was doubled in 1962. The other plant is at Niagara Falls, New York, with a capacity of 18,000 tons. Hooker has assets of almost $200,000,000. American Potash & Chemical Corporation entered the industry in 1955 by the acquisition of Western Electro Chemical Company. American Potash also has two plants, one located at Henderson, Nevada, with a 27,000-ton capacity and the other at Aberdeen, Mississippi (built in 1957), the capacity of which was 15,000 tons. Its assets are almost $100,000,000. The trial court found that these two corporations 'had a virtual monopoly' in the relevant southeast market, holding over 90% of the market.

A third company in the industry was Pennsalt which had a 15,392-ton plant at Portland, Oregon. It entered seriously into the relevant marketing area through a sales arrangement with Olin dated December 1957 and finalized in 1958, which was aimed at testing the availability of the southeastern market. Olin as an exclusive seller was to undertake the sale of 2,000 tons of sodium chlorate per year to pulp and paper mills in the southeast (except for Buckeye Cellulose Co., at Foley, Florida, which Pennsalt reserved to serve directly). In 1960, 4,186 tons of sodium chlorate were marketed in the relevant market with the aid of this agreement. This accounted for 8.9% of the sales in that market.

During the previous decade no new firms had entered the sodium chlorate industry, and little effort had been made by existing companies to expand their facilities prior to 1957. In 1953 Olin had made available to Pennsalt its Mathieson patented process for bleaching pulp with chlorine dioxide and the latter had installed it 100% in all of the western paper mills. This process uses sodium chlorate. At about the same time the process was likewise made available, royalty free, to the entire pulp and paper industry. By 1960 most of the chlorine dioxide generated by paper manufacturers was being produced under the Olin controlled process. This created an expanding demand for sodium chlorate and by 1960 the heaviest concentration of purchasers was located in the relevant southeastern territory. By 1957 Hooker began increasing the capacity of its Columbus plant and by 1960 it had been almost doubled. American Potash sensed the need of a plant in Mississippi to compete with Hooker and began its Aberdeen plant in 1957. It was completed to a 15,000-ton capacity in 1959, and this capacity was expanded 50% by 1961.

The sales arrangement between Pennsalt and Olin, previously mentioned, was superseded by the joint venture agreement on February 11, 1960, and the Penn-Olin plant operations at Calvert City, Kentucky, began i 1961. In the same year Pittsburgh Plate Glass Company announced that it would build a plant at Lake Charles, Louisiana, with a capacity of 15,000 tons. Pittsburgh Plate Glass had operated a sodium chlorate plant in Canada.

As a result of these expansions and new entries into the southeastern market, the projected production of sodium chlorate there more than doubled. By 1962 Hooker had 32,000 tons; American Potash, 22,500 tons; Penn-Olin, 26,500 tons; and Pittsburgh Glass, 15,000 tons-a total of 96,000 tons as contrasted to 41,150 in 1959. Penn-Olin's share of the expanded relevant market was about 27.6%. Outside the relevant southeastern market Pacific Engineering and Production Company announced in July 1961 that it would construct a 5,000-ton sodium chlorate plant at Henderson, Nevada, in a joint venture with American Cyanamid Company. Pacific would put up the 'know-how' and American Cyanamid the loan of the necessary money with 50% stock options.

4. THE SETTING FROM WHICH THE JOINT VENTURE EMERGED

As early as 1951 Pennsalt had considered building a plant at Calvert City and starting in 1955 it initiated several cost and market studies for a sodium chlorate plant in the southeast. Three different proposals from within its own organization were rejected prior to 1957, apparently because the rate of return was so unattractive that 'the expense of refining these figures further would be unwarranted.' When Hooker announced in December 1956 that it was going to increase the capacity of its Columbus plant, the interest of Pennsalt management was reactivated. It appointed a 'task force' to evaluate the company's future in the eastern market; it retained management consultants to study that market and its chief engineer prepared cost estimates. However, in December 1957 the management decided that the estimated rate of return was unattractive and considered it 'unlikely' that Pennsalt would go it alone. It was suggested that Olin would be a 'logical partner' in a joint venture and might in the interim be interested in distributing in the East 2,000 tons of the Portland sodium chlorate production. The sales agreement with Olin, heretofore mentioned, was eventually made. In the final draft the parties agreed that 'neither * *  * should move in the chlorate or perchlorate field without keeping the other party informed *  *  * ' and that one would 'bring to the attention of the other any unusual aspects of this business which might make it desirable to proceed further with production plans.' Pennsalt claims that it finally decided, prior to this agreement, that it should not build a plant itself and that this decision was never reconsidered or changed. But the District Court found to the contrary.

During this same period-beginning slightly earlier-Olin began investigating the possibility of entering the sodium chlorate industry. It had never produced sodium chlorate commercially, although its predecessor had done so years before. However, the electrolytic process used in making sodium chlorate is intimately related to other operations of Olin and required the same general knowledge. Olin also possessed extensive experience in the technical aspects of bleaching pulp and paper and was intimate with the pulp and paper mills of the southeast. In April 1958 Olin's chemical division wrote and circulated to the management a 'Whither Report' which stated in part:

'We have an unparalleled opportunity to move sodium chlorate     into the paper industry as the result of our work on the installation of chlorine dioxide      generators. We have a captive consumption for sodium     chlorate.'

And Olin's engineering supervisor concluded that entry into sodium chlorate production was 'an attractive venture' since it 'represents a logical expansion of the product line of the Industrial Chemicals Division * *  * ' with respect to 'one of the major markets, pulp and paper bleaching, (with which) we have a favorable marketing position, particularly in the southeast.'

The staff, however, did not agree with the engineering supervisor or the Whither Report' and concluded 'that they didn't feel that this particular project showed any merit worthy of serious consideration by the corporation at that time.' They were dubious of the cost estimates and felt the need to temper their scientists' enthusiasm for new products with the uncertainties of plant construction and operation. But, as the trial court found, the testimony indicated that Olin's decision to enter the joint venture was made without determining that Olin could not or would not be an independent competitor. That question, 'never reached the point of final decision.'

This led the District Court to find that the president of Penn-Olin testified, '(t)he possibility of individual entry into the southeastern market had not been completely rejected by either Pennsalt or Olin before they decided upon the joint venture.' 217 F.Supp. 110, 128-129.

5. SECTION 7 OF THE CLAYTON ACT APPLIES TO 'JOINT VENTURES.'

Appellees argue that § 7 applies only where the acquired company is 'engaged' in commerce and that it would not apply to a newly formed corporation, such as Penn-Olin. The test, they say, is whether the enterprise to be acquired is engaged in commerce-not whether a corporation formed as the instrumentality for the acquisition is itself engaged in commerce at the moment of its formation. We believe that this logic fails in the light of the wording of the section and its legislative background. The test of the section is the effect of the acquisition. Certainly the formation of a joint venture and purchase by the organizers of its stock would substantially lessen competition-indeed foreclose it-as between them, both being engaged in commerce. This would be true whether they were in actual or potential competition with each other and even though the new corporation was formed to create a wholly new enterprise. Realistically, the parents would not compete with their progeny. Moreover, in this case the progeny was organized to further the business of its parents, already in commerce, and the fact that it was organized specifically to engage in commerce should bring it within the coverage of § 7. In addition, long prior to trial Penn-Olin was actually engaged in commerce. To hold that it was not 'would be illogical and disre-spectful of the plain congressional purpose in amending § 7 * *  * (for) it would create a large loophole in a statute designed to close a loophole.' United States v. Philadelphia National Bank, 374 U.S. 321, 343, 83 S.Ct. 1715, 1730, 10 L.Ed.2d 915 (1963). In any event, Penn-Olin was engaged in commerce at the time of suit and the economic effects of an acquisition are to be measured at that point rather than at the time of acquisition. United States v. E. I. du Pont de Nemours & Co., 353 U.S. 586, 607, 77 S.Ct. 872, 884, 1 L.Ed.2d 1057 (1957). The technicality could, therefore, be averted by merely refiling an amended complaint at the time of trial. This would be a useless requirement.

6. THE APPLICATION OF THE MERGER DOCTRINE.

This is the first case reaching this Court and on which we have written that directly involves the validity under § 7 of the joint participation of two corporations in the creation of a third as a new domestic producing organization. We are, therefore, plowing new ground. It is true, however, that some aspects of the problem might be found in United States v. Terminal R. Assn., 224 U.S. 383, 32 S.Ct. 507, 56 L.Ed. 810 (1912), and Associated Press v. United States, 326 U.S. 1, 65 S.Ct. 1416, 89 L.Ed. 2013 (1945), where joint ventures with great market power were subjected to control, even prior to the amendment to § 7.

It is said that joint ventures were utilized in ancient times, according to Taubman, who traces them to Babylonian 'commenda' and Roman 'societas.' Taubman, The Joint Venture and Tax Classification, 27-81 (1957). Their economic significance has grown tremendously in the last score of years, having been spurred on by the need for speed and size in fashioning a war machine during the early forties. Postwar use of joint subsidiaries and joint projects led to the spawning of thousands of such ventures in an effort to perform the commercial tasks confronting an expanding economy.

The joint venture, like the 'merger' and the 'conglomeration,' often creates anticompetitive dangers. It is the chosen competitive instrument of two or more corporations previously acting independently and usually competitively with one another. The result is 'a triumvirate of associated corporations.' If the parent companies are in competition, or might compete absent the joint venture, it may be assumed that neither will compete with the progeny in its line of commerce. Inevitably, the operations of the joint venture will be frozen to those lines of commerce which will not bring it into competition with the parents, and the latter, by the same token will be foreclosed from the joint venture's market.

This is not to say that the joint venture is controlled by the same criteria as the merger or conglomeration. The merger eliminates one of the participating corporations from the market while a joint venture creates a new competitive force therein. See United States v. Philadelphia National Bank, supra; Brown Shoe Co. v. United States, 370 U.S. 294, 82 S.Ct. 1502, 8 L.Ed.2d 510 (1962); United States v. Aluminum Co. of America, 377 U.S. 271, 84 S.Ct. 1283, 12 L.Ed.2d 314 (1964). The rule of United States v. El Paso Natural Gas Co., 376 U.S. 651, 84 S.Ct. 1044, 12 L.Ed.2d 12 (1964), where a corporation sought to protect its market by acquiring a potential competitor, would, of course, apply to a joint venture where the same intent was present in the organization of the new corporation.

Overall, the same considerations apply to joint ventures as to mergers, for in each instance we are but expounding a national policy enunciated by the Congress to preserve and promote a free competitive economy. In furtherance of that policy, now entering upon its 75th year, this Court has formulated appropriate criteria, first under the Sherman Act and now, also, under the Clayton Act and other antitrust legislation. The Celler-Kefauver Amendment to § 7, with which we now deal, was the answer of the Congress to a loophole found to exist in the original enactment. See Brown Shoe Co. v. United States, supra, and United States v. Philadelphia National Bank, supra. However, in an earlier case, this Court, while considering the effect of a stock acquisition under the original § 7, declared in United States v. E. I. du Pont de Nemours & Co., supra, 353 U.S. at 592, 77 S.Ct. at 876: 'We hold that any acquisition by one corporation of all or any part of the stock of another corporation, competitor or not, is within the reach of the section whenever the reasonable likelihood appears that the acquisition will result in a restraint of commerce * *  * .' The grand design of the original § 7, as to stock acquisitions, as well as the Celler-Kefauver Amendment, as to the acquisition of assets, was to arrest incipient threats to competition which the Sherman Act did not ordinarily reach. It follows that actual restraints need not be proved. The requirements of the amendment are satisfied when a 'tendency' toward monopoly or the 'reasonable likelihood' of a substantial lessening of competition in the relevant market is shown. Congress made it plain that the validity of such arrangements was to be gauged on a broader scale by using the words 'may be substantially to lessen competition' which 'indicate that its concern was with probabilities, not certainties.' Brown Shoe Co. v. United States, supra, 370 U.S. at 323, 82 S.Ct. at 1522. And, as we said with reference to another merger, in United States v. Philadelphia National Bank, supra, 374 U.S. at 362, 83 S.Ct. at 1741:

'Clearly, this is not the kind of quest on which is     susceptible of a ready and precise answer in most cases. It     requires not merely an appraisal of the immediate impact of      the merger upon competition, but a predication of its impact      upon competitive conditions in the future; this is what is      meant when it is said that the amended § 7 was intended to      arrest anticompetitive tendencies in their 'incipiency.' See      Brown Shoe Co., supra, 370 U.S., at 317, 322 (82 S.Ct., at      1519-1520, 1522, 8 L.Ed.2d 510). Such a prediction is sound     only if it is based upon a firm understanding of the      structure of the relevant market; yet the relevant economic      data are both complex and elusive.'

And in the most recent merger case before the Court, United States v. Aluminum Co. of America, supra, the appellee had acquired a small competitor, Rome Cable Corporation. The Court noted that the acquisition gave appellee only 1.3% additional control of the aluminum conductor market. 'But in this setting,' the Court said,

'that seems to us reasonably likely to produce a substantial     lessening of competition within the meaning of § 7. * *  * It would seem that the situation in the      aluminum industry may be oligopolistic. As that condition     develops, the greater is the likelihood that parallel      policies of mutual advantage, not competition, will emerge. That tendency may well be thwarted by the presence of small     but significant competitors.' 377 U.S. at 280, 84 S.Ct. at     1289.

We apply the light of these considerations in the merger cases to the problem confronting us here. The District Court found that 'Pennsalt and Olin each possessed the resources and general capability needed to build its own plant in the southeast and to compete with Hooker and (American Potash) in that market. Each could have done so if it had wished.' 217 F.Supp. 110, 129. In addition, the District Court found that, contrary to the position of the management of Olin and Pennsalt, 'the forecasts of each company indicated that a plant could be operated with profit.' Ibid.

The District Court held, however, that these considerations had no controlling significance, except 'as a factor in determining whether as a matter of probability both companies would have entered the market as individual competitors if Penn-Olin had not been formed. Only in this event would potential competition between the two companies have been foreclosed by the joint venture.' Id., at 130. In this regard the court found it 'impossible to conclude that as a matter of reasonable probability both Pennsalt and Olin would have built plants in the southeast if Penn-Olin had not been created.' Ibid. The court made no decision concerning the probability that one would hae built 'while the other continued to ponder.' It found that this 'hypothesized situation affords no basis for concluding that Penn-Olin had the effect of substantially lessening competition.' Ibid. That would depend, the court said, 'upon the competitive impact which Penn-Olin will have as against that which might have resulted if Pennsalt or Olin had been an individual market entrant.' Ibid. The court found that this impact could not be determined from the record in this case. 'Solely as a matter of theory,' it said, ' * *  * no reason exists to suppose that Penn-Olin will be a less effective competitor than Pennsalt or Olin would have been. The contrary conclusion is the more reasonable.' Id., at 131.

We believe that the court erred in this regard. Certainly the sole test would not be the probability that both companies would have entered the market. Nor would the consideration be limited to the probability that one entered alone. There still remained for consideration the fact that Penn-Olin eliminated the potential competition of the corporation that might have remained at the edge of the market, continually threatening to enter. Just as a merger eliminates actual competition, this joint venture may well foreclose any prospect of competition between Olin and Pennsalt in the relevant sodium chlorate market. The difference, of course, is that the merger's foreclosure is present while the joint venture's is prospective. Nevertheless, '(p)otential competition * *  * as a substitute for *  *  * (actual competition) may restrain producers from overcharging those to whom they sell or underpaying those from whom they buy. * *  * Potential competition, insofar as the threat survives (as it would have here in the absence of Penn-Olin), may compensate in part for the imperfection characteristic of actual competition in the great majority of competitive markets.' Wilcox, Competition and Monopoly in American Industry, TNEC Monograph No. 21 (1940) 7-8. Potential competition cannot be put to a subjective test. It is not 'susceptible of a ready and precise answer.' As we found in United States v. El Paso Natural Gas Co., supra, 376 U.S. at 660, 84 S.Ct. at 1049, the 'effect on competition * *  * is determined by the nature or extent of that market and by the nearness of the absorbed company to it, that company's eagerness to enter that market, its resourcefulness, and so on.' The position of a company 'as a competitive factor *  *  * was not disproved by the fact that it had never sold *  *  * there *  *  *. (I)t is irrelevant in a market * *  * where incremental needs are booming.' The existence of an aggressive, well equipped and well financed corporation engaged in the same or related lines of commerce waiting anxiously to enter an oligopolistic market would be a substantial incentive to competition which cannot be underestimated. Witness the expansion undertaken by Hooker and American Potash as soon as they heard of the interest of Olin Mathieson and of Pennsalt in southeast territory. This same situation might well have come about had either Olin or Pennsalt entered the relevant market alone and the other remained aloof watching developments.

8. THE PROBLEM OF PROOF.

Here the evidence shows beyond question that the industry was rapidly expanding; the relevant southeast market was requiring about one-half of the national production of sodium chlorate; few corporations had the inclination, resources and know-how to enter this market; both parent corporations of Penn-Olin had great resources; each had long been identified with the industry, one owning valuable patent rights while the other had engaged in sodium chlorate production for years; each had other chemicals, the production of which required the use of sodium chlorate; right up to the creation of Penn-Olin, each had evidenced a long-sustained and strong interest in entering the relevant market area; each enjoyed good reputation and business connections with the major consumers of sodium chlorate in the relevant market, i.e., the pulp and paper mills; and, finally, each had the know-how and the capacity to enter that market and could have done so individually at a reasonable profit. Moreover, each company had compelling reasons for entering the southeast market. Pennsalt needed to expand its sales to the southeast, which it could not do economically without a plant in that area. Olin was motivated by 'the fact t at (it was) already buying and using a fair quantity (of sodium chlorate) for the production of sodium chlorite and that (it was) promoting the Mathieson process of the generation of chlorine dioxide which uses sodium chlorate.' Unless we are going to require subjective evidence, this array of probability certainly reaches the prima facie stage. As we have indicated, to require more would be to read the statutory requirement of reasonable probability into a requirement of certainty. This we will not do.

However, despite these strong circumstances, we are not disposed to disturb the court's finding that there was not a reasonable probability that both Pennsalt and Olin would have built a plant in the relevant market area. But we have concluded that a finding should have been made as to the reasonable probability that either one of the corporations would have entered the market by building a plant, while the other would have remained a significant potential competitor. The trial court said that this question 'need not be decided.' It is not clear whether this conclusion was based on the erroneous assumption that the Government could not show a lessening of competition even if such a situation existed, or upon the theory (which the court found erroneous in its final opinion) that the Government need not show the impact of such an event on competition in the relevant market as compared with the entry of Penn-Olin. The court may also have concluded that there was no evidence in the record on which to base such a finding. In any event, we prefer that the trial court pass upon this question and we venture no opinion thereon. Since the trial court might have been concerned over whether there was evidence on this point, we reiterate that it is impossible to demonstrate the precise competitive effects of the elimination of either Pennsalt or Olin as a potential competitor. As the Report of the Attorney General's National Committee to Study the Antitrust Laws (1955) put it:

'The basic characteristic of effective competition in the     economic sense is that no one seller, and no group of sellers      acting in concert, has the power to choose its level of      profits by giving less and charging more. Where there is     workable competition, rival sellers, whether existing      competitors or new or potential entrants into the field,      would keep this power in check by offering or threatening to      offer effective inducements *  *  * .' At 320.

There being no proof of specific intent to use Penn-Olin as a vehicle to eliminate competition, nor evidence of collateral restrictive agreements between the joint venturers, we put those situations to one side. We note generally the following criteria which the trial court might take into account in assessing the probability of a substantial lessening of competition: the number and power of the competitors in the relevant market; the background of their growth; the power of the joint venturers; the relationship of their lines of commerce; the competition existing between them and the power of each in dealing with the competitors of the other; the setting in which the joint venture was created; the reasons and necessities for its existence; the joint venture's line of commerce and the relationship thereof to that of its parents; the adaptability of its line of commerce to non-competitive practices; the potential power of the joint venture in the relevant market; an appraisal of what the competition in the relevant market would have been if one of the joint venturers had entered it alone instead of through Penn-Olin; the effect, in the event of this occurrence, of the other joint venturer's potential competition; and such other factors as might indicate potential risk to competition in the relevant market. In weighing these factors the court should remember that the mandate of the Congress is in terms of the probability of a lessening of substantial compe ition, not in terms of tangible present restraint.

The judgment is therefore vacated and the case is remanded for further proceedings in conformity with this opinion.

Vacated and remanded.

Mr. Justice WHITE dissents.

Mr. Justice DOUGLAS, with whom Mr. Justice BLACK agrees, dissenting.