Stopping a Train: Why it is So Difficult for a Private Plaintiff to Block a Deal

Abstract

Section 16 of the Clayton Act gives private plaintiffs the right to seek an injunction blocking a merger or acquisition that violates section 7 of the Clayton Act, but today such a remedy exists more as a theoretical possibility. Section 7 began as a little-used statute with no clear standard of illegality. It then evolved into a potent tool for private parties seeking protection from economic harm, regardless of the impact on competition, until the Supreme Court imposed a requirement that competitors must establish antitrust standing. The result was an almost insurmountable hurdle because competitors are more likely to be beneficiaries than victims of any anticompetitive effects. Consumers are also poor plaintiffs because their injuries usually can be redressed with monetary damages and, therefore, they do not require injunctive relief.