15 U.S.C. § 18 — Acquisition by one corporation of stock of another

submitted 112 years ago by ch. 323 to r/title-15-COMMERCE-AND-TRADE · 621 words · no verdicts yet

in plain englishAI-generated · not legal advice

This law bans buying another company's stock or assets if it would hurt competition. It also bans purchases that would create a monopoly. Exceptions apply to stock bought only as an investment and to certain railroad subsidiaries.

This section stops one business from buying another business's stock, in whole or in part, if that purchase might substantially lessen competition or tend to create a monopoly. This applies to any person engaged in commerce, or in any activity affecting commerce, and to any person subject to the Federal Trade Commission's jurisdiction. It covers buying stock or other share capital, directly or indirectly. The same ban applies to buying another business's assets, in whole or in part. Again, this only applies if the purchase might substantially lessen competition, or tend to create a monopoly, in any line of commerce or any part of the country. This covers the effect of the stocks or assets themselves, and the effect of using the stock to vote or grant proxies. This section does not apply to someone who buys stock solely as an investment, as long as they don't use that stock — by voting or otherwise — to bring about, or try to bring about, a substantial lessening of competition. This section also does not stop a corporation engaged in commerce, or in any activity affecting commerce, from forming subsidiary corporations to carry on its own immediate lawful business, or the natural and legitimate extensions of that business, or from owning and holding all or part of the stock of those subsidiaries — as long as forming them does not substantially lessen competition. This section does not stop a common carrier regulated under the laws to regulate commerce from helping build branch or short rail lines that feed into its main line, or from acquiring or owning stock in those branch lines. It also does not stop such a common carrier from acquiring and owning stock in a branch or short line built by an independent company, where there is no substantial competition between the company owning that branch line and the company owning the main line. And it does not stop such a common carrier from extending its own lines by acquiring stock, or otherwise, of another common carrier, where there is no substantial competition between the two. Nothing in this section affects any right that was legally acquired before this section applied. Nothing in this section makes lawful anything that was already prohibited or made illegal by the antitrust laws, and nothing exempts any person from the criminal penalties or civil remedies those laws provide. Finally, this section does not apply to transactions properly completed under authority given by the Secretary of Transportation, the Federal Power Commission, the Surface Transportation Board, the Securities and Exchange Commission acting under its authority in section 79j of this title, the United States Maritime Commission, or the Secretary of Agriculture acting under a statute that gives that power to the relevant commission, board, or secretary.

the actual law source: uscode.house.gov ↗public domain

No person engaged in commerce or in any activity affecting commerce shall acquire, directly or indirectly, the whole or any part of the stock or other share capital and no person subject to the jurisdiction of the Federal Trade Commission shall acquire the whole or any part of the assets of another person engaged also in commerce or in any activity affecting commerce, where in any line of commerce or in any activity affecting commerce in any section of the country, the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly.

No person shall acquire, directly or indirectly, the whole or any part of the stock or other share capital and no person subject to the jurisdiction of the Federal Trade Commission shall acquire the whole or any part of the assets of one or more persons engaged in commerce or in any activity affecting commerce, where in any line of commerce or in any activity affecting commerce in any section of the country, the effect of such acquisition, of such stocks or assets, or of the use of such stock by the voting or granting of proxies or otherwise, may be substantially to lessen competition, or to tend to create a monopoly.

This section shall not apply to persons purchasing such stock solely for investment and not using the same by voting or otherwise to bring about, or in attempting to bring about, the substantial lessening of competition. Nor shall anything contained in this section prevent a corporation engaged in commerce or in any activity affecting commerce from causing the formation of subsidiary corporations for the actual carrying on of their immediate lawful business, or the natural and legitimate branches or extensions thereof, or from owning and holding all or a part of the stock of such subsidiary corporations, when the effect of such formation is not to substantially lessen competition.

Nor shall anything herein contained be construed to prohibit any common carrier subject to the laws to regulate commerce from aiding in the construction of branches or short lines so located as to become feeders to the main line of the company so aiding in such construction or from acquiring or owning all or any part of the stock of such branch lines, nor to prevent any such common carrier from acquiring and owning all or any part of the stock of a branch or short line constructed by an independent company where there is no substantial competition between the company owning the branch line so constructed and the company owning the main line acquiring the property or an interest therein, nor to prevent such common carrier from extending any of its lines through the medium of the acquisition of stock or otherwise of any other common carrier where there is no substantial competition between the company extending its lines and the company whose stock, property, or an interest therein is so acquired.

Nothing contained in this section shall be held to affect or impair any right heretofore legally acquired: Provided, That nothing in this section shall be held or construed to authorize or make lawful anything heretofore prohibited or made illegal by the antitrust laws, nor to exempt any person from the penal provisions thereof or the civil remedies therein provided.

Nothing contained in this section shall apply to transactions duly consummated pursuant to authority given by the Secretary of Transportation, Federal Power Commission, Surface Transportation Board, the Securities and Exchange Commission in the exercise of its jurisdiction under section 79j of this title,1 the United States Maritime Commission, or the Secretary of Agriculture under any statutory provision vesting such power in such Commission, Board, or Secretary.

Source credit: (Oct. 15, 1914, ch. 323, § 7, 38 Stat. 731; Dec. 29, 1950, ch. 1184, 64 Stat. 1125; Pub. L. 96–349, § 6(a), Sept. 12, 1980, 94 Stat. 1157; Pub. L. 98–443, § 9(l), Oct. 4, 1984, 98 Stat. 1708; Pub. L. 104–88, title III, § 318(1), Dec. 29, 1995, 109 Stat. 949; Pub. L. 104–104, title VI, § 601(b)(3), Feb. 8, 1996, 110 Stat. 143.)

history & why it existsrecord from the source credit

1914Enacted · Act of Oct. 15, 1914, ch. 323 · 38 Stat. 731
1950Amended · Act of Dec. 29, 1950, ch. 1184 · 64 Stat. 1125
1980Amended · Pub. L. 96-349 · 94 Stat. 1157
1984Amended · Pub. L. 98-443 · 98 Stat. 1708
1995Amended · Pub. L. 104-88 · 109 Stat. 949
1996Amended · Pub. L. 104-104 · 110 Stat. 143

A history note hasn’t been published yet. The record shows enactment by ch. 323 on 1914-10-15.

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