The Word

Ever since the U.S. Supreme Court ruled that Du Font's 40-year-old ownership of 23% of General Motors stock violated the 1914 Clayton Act (TIME, June 17), U.S. businessmen have been fretting over just how far the Justice Department will try to push the new decision. Last week they could breathe a little easier. In a carefully prepared speech Robert A. Bicks, a top member of the Justice Department's Antitrust Division, told the American Bar Association that the Government would take a long, hard look before trying to upset other longstanding affiliations. Said Bicks: "At least in terms of the feasibility of effective relief in cases involving long-consummated acquisitions, the G.M.-Du Pont ruling may be more the exception than the rule."

What worried businessmen most was that trustbusters might attempt to divorce old and happy corporate liaisons, whether set up by stock purchase (as in the Du Pont case) or by the acquisition of other assets, for fear that they could produce a monopoly. Bicks soothed their fears. Though Section 7 of the Clayton Anti-Trust Act as amended in 1950 covers all asset acquisitions (it previously covered stock only), the amendments state clearly that "nothing contained in this action shall be held to affect or impair any right heretofore legally acquired." Therefore, he reasoned, a great many of pre-1950 mergers are "not subject to challenge."

"Not only are pre-1950 asset acquisitions immunized by law," said Bicks, "but, equally important, enforcement practicalities may move against stock or asset acquisitions consummated since then. The likelihood may well be that not too long after a merger has been consummated the assets of the merged companies may be so scrambled that effective divestiture may be unfeasible." Even if the trustbusters decide to act immediately, there are other effective blocks to quick action against a company that acquires only part of the stock of a supplier or customer. "Competitive consequences may be much more ambiguous at the time of purchase. Only after a passage of years may they emerge sufficiently clearly to warrant any responsible judgment regarding the acquisition's probable effects."

Concluded Bicks: The Supreme Court decision "places tremendous responsibility on enforcement officials, but the Justice Department is keenly aware of this responsibility. The Antitrust Division has not, since G.M.-Du Pont, researched back through recorded stock acquisitions since 1914 to determine whether now--40 or more years later--competition may--still further in the future--be substantially lessened."

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