be made with a pie machine. The government also showed that producers and sellers ordinarily do not consider the prices of other dessert items in setting a sales price for frozen dessert pies. In addition, the defendant's evidence established that frozen dessert pies are sold at different prices than other dessert items, and that prices have increased more rapidly for frozen dessert pies than for other frozen baked goods. This evidence tends to show that the prices of frozen dessert pies are not sensitive to the prices of other dessert products.
The last factor mentioned by the Court in Brown Shoe is the existence of specialized vendors. As has been described in the Findings of Fact, frozen dessert pies are distributed through frozen food brokers. While other frozen foods, including desserts, are distributed in much the same way, fresh baked pies are distributed quite differently, because of their perishability. Thus, although vendors do not deal exclusively with frozen dessert pies, a distributor of frozen dessert pie will not distribute most other dessert products.
An additional "practical indicia" not mentioned by the Supreme Court but which probably should be considered is the presence of entry barriers. Especially in the selling of retail frozen dessert pies, name brand and consumer recognition are important, and take time to develop. Since advertising is important, a new entrant must be prepared to launch an advertising campaign to capture a share of the market. The existence of entry barriers in the frozen dessert pie business is demonstrated by the unsuccessful attempt of Fairfield Farms Kitchen (Marriott Corporation) to enter the frozen dessert pie market.
Our analysis of the various practical indicia enumerated in Brown Shoe convinces us that the frozen dessert pie market is sufficiently well-defined to be considered a "line of commerce" for antitrust purposes. Under Brown Shoe, this conclusion is not precluded by the fact that frozen dessert pies are interchangeable to some degree with other dessert products. Equally narrow product markets have been approved in many other cases. See, e.g., United States v. Aluminum Co. of America, 377 U.S. 271, 12 L. Ed. 2d 314, 84 S. Ct. 1283 (1964) (aluminum conductor cable); United States v. E. I. Du Pont de Nemours & Co., 353 U.S. 586, 1 L. Ed. 2d 1057, 77 S. Ct. 872 (1957) (automotive finishes and fabrics); General Foods Corp. v. Federal Trade Commission, 386 F.2d 936 (3d Cir. 1967), cert. denied, 391 U.S. 919, 20 L. Ed. 2d 657, 88 S. Ct. 1805 (1968) (household steel wool products); Reynolds Metals Company v. Federal Trade Commission, 114 U.S. App. D.C. 2, 309 F.2d 223 (1962) (florist foil); United States v. Pennzoil Co., 252 F. Supp. 962 (W.D. Pa. 1965) (Penn Grade crude oil); United States v. Lever Brothers, 216 F. Supp. 887 (S.D.N.Y. 1963) (low-sudsing heavy duty detergents).
The defendant has cited numerous cases to support its contention that other dessert products must be included with frozen dessert pies in any relevant product market. Most of these cases can be distinguished. In many of the defendant's cases, the court adopted a broader product at the request of the government. See, e.g., United States v. Grinnell Corporation, 384 U.S. 563, 16 L. Ed. 2d 778, 86 S. Ct. 1698 (1966); United States v. Continental Can Co., 378 U.S. 441, 12 L. Ed. 2d 953, 84 S. Ct. 1738 (1964); American Crystal Sugar Co. v. Cuban-American Sugar Co., 259 F.2d 524 (2d Cir. 1958); United States v. Koppers Co., Inc., 202 F. Supp. 437 (W.D. Pa.), app. dismissed, 371 U.S. 856, 9 L. Ed. 2d 95, 83 S. Ct. 96 (1962). Since the Clayton Act is concerned with any line of commerce, the government need not base its case on the narrowest possible market. Thus, when the government is attempting to prevent a merger between two companies, the courts frequently have rejected the argument that each company's product is in a separate market. However, nothing in these cases precludes use of a narrower product market if that is the "line of commerce" where competition is affected.
Several other cases relied on by the defendant involved proposed product markets that were defined in terms of the defendant's own products. See Telex Corp. v. International Business Machines Corp., 510 F.2d 894 (10th Cir. 1975), cert. denied, 423 U.S. 802, 96 S. Ct. 8, 46 L. Ed. 2d 244 (1976); Mogul v. General Motors Corp., 391 F. Supp. 1305 (E.D. Pa. 1975). Since a product market should not be tailored to fit a defendant's business, defining the market in terms of the defendant's product obviously is improper. In the instant case, however, the market is defined simply as frozen dessert pies without reference to Mrs. Smith's products.
Finally, some of the cases relied on by Mrs. Smith's were decided under the Sherman Act rather than the Clayton Act. The Clayton Act was intended to retard economic concentration in its incipiency by preventing mergers which tend to create a monopoly or which otherwise might lessen competition substantially. See Brown Shoe Co. v. United States, supra 370 U.S. at 317-23. Since the Clayton Act deals with probabilities, a defendant may violate the act even though it does not have monopoly power and even though the defendant's product still faces substantial competition. Consequently, Sherman Act cases should not be controlling in defining a "line of commerce" under the Clayton Act. See Crown Zellerbach Corp. v. Federal Trade Commission, 296 F.2d 800 (9th Cir. 1961), cert. denied, 370 U.S. 937, 8 L. Ed. 2d 807, 82 S. Ct. 1581 (1962). We believe that this distinction between the Sherman and Clayton Acts is still viable despite the Supreme Court's statement in United States v. Grinnell Corp., supra, that "[we] see no reason to differentiate between 'line' of commerce in the context of the Clayton Act and 'part' of commerce for purposes of the Sherman Act." 384 U.S. at 573. There is no indication that the Court intended to state a general rule for all situations. Rather, the Court was noting that in the particular circumstances before it, a Clayton Act case was an appropriate precedent, even though the Court was deciding a Sherman Act question. Although Sherman Act cases certainly are relevant and are entitled to some weight in defining a "line of commerce" under the Clayton Act, we believe that cases decided under the Clayton Act, are stronger precedents, since the tests may differ somewhat under each act.
Whether or not Sherman Act cases are considered, our decision to define the relevant product market as frozen dessert pies is amply supported by the cases cited previously. Industry recognition, unique characteristics and production facilities, distinct prices, specialized vendors, and entry barriers all help define this market. Most importantly, consumer preference for pie and specifically for frozen dessert pie vitiates Mrs. Smith's defense based on substitutability. Consumers may not want pie all the time, but when they do, they should have the benefit of competition in the frozen dessert pie industry. Defendant's proposed product market of all desserts would have the practical effect of exempting dessert producers from important parts of the antitrust laws, a result which would be unwarranted. We hold that the relevant "line of commerce" in this case is frozen dessert pies.
The remaining issues can be resolved much more easily. In addition to determining the appropriate line of commerce in which to analyze the effects of the merger, we also must find an appropriate section of the country for the same purpose. In this case, the entire United States is a proper geographic market. Producers of frozen dessert pies compete for customers throughout the United States, and both Harriss and Mrs. Smith's sell their pies nationally. Thus, the area of competition is the United States as a whole, and the entire country is a proper geographic market. See United States v. Pabst Brewing Co., 384 U.S. 546, 16 L. Ed. 2d 765, 86 S. Ct. 1665 (1966).
After defining the relevant product market and geographic area, we must analyze the effect of the acquisition on competition in that market. In Brown Shoe, the Supreme Court commented:
"The market share which companies may control by merging is one of the most important factors to be considered when determining the probable effects of the combination on effective competition in the relevant market." 370 U.S. at 343.
Market share has been employed as the primary measure of a merger's effect on competition in numerous cases, and violations of Section 7 frequently have been predicated on combined market shares much smaller than in this case. See, e.g., United States v. Pabst Brewing Co., 384 U.S. 546, 16 L. Ed. 2d 765, 86 S. Ct. 1665 (1966) (combined national market share of 4.5 percent); United States v. Von's Grocery Co., 384 U.S. 270, 16 L. Ed. 2d 555, 86 S. Ct. 1478 (1966) (combined market share of 7.5 percent). In United States v. Philadelphia National Bank, 374 U.S. 321, 10 L. Ed. 2d 915, 83 S. Ct. 1715 (1963), the Court reiterated the importance of market share in a Section 7 case:
"Specifically, we think that a merger which produces a firm controlling an undue share of the relevant market, and results in a significant increase in the concentration of firms in the market, is so inherently likely to lessen competition substantially that it must be enjoined in the absence of evidence clearly showing that the merger is not likely to have such anticompetitive effects." 374 U.S. at 363.