George Van Camp & Sons Co. v. American Can Co.

Background

One food packer (George Van Camp & Sons Company) sued after a tin-can maker (American Can Company) sold identical cans and related services on more favorable terms to a competing packer (Van Camp Packing Company). The complaint alleges the can maker sold identical cans at twenty percent below its standard price to the competitor, provided sealing machines free to that competitor while charging fixed rent to the complainant, and paid bonuses and discounts to the competitor. The bill charges these price differences were not explained by quality, quantity, cost, transportation, or good-faith competition, and that the effect was to substantially lessen competition and tend to create a monopoly in the packing-and-selling food-in-cans market.

Reasoning

The certified questions asked whether Section 2 of the Clayton Act applies when a seller’s price discrimination harms competition in the buyers’ line of commerce rather than the seller’s own line. The Court held the statutory phrase “in any line of commerce” should be given its plain, comprehensive meaning and therefore covers such downstream effects. The Court refused to resort to committee reports or other outside aids because the language was clear. Both certified questions were answered “Yes,” meaning the alleged conduct falls within the terms of the statute.

Real world impact

Under this interpretation, discriminatory pricing by a manufacturer can be challenged under Section 2 when the discounts substantially lessen competition or tend to create a monopoly in the market where its buyers compete. The ruling treats the statute’s protection of competition broadly and brings the facts described within the statute’s reach, guiding further proceedings in the lower courts.