In the case of Great Atlantic & Pacific Tea Co., Inc. v. Federal Trade Commission, 1978, the Supreme Court ruled in favor of the Federal Trade Commission (FTC). The FTC had charged that A&P's acquisition of two supermarket chains violated Section 7 of the Clayton Act because it substantially lessened competition or tended to create a monopoly. A&P argued that these acquisitions fell under an exemption for "failing companies," but this was rejected by both lower courts and eventually by the Supreme Court as well. The court found that one chain did not meet all three requirements for failing company status: imminent bankruptcy, no other available purchaser, and serious effects on market competition if liquidated; while another chain only met one requirement - imminent bankruptcy - thus neither qualified for exemption from antitrust laws.

In the dissenting opinion for Great Atlantic & Pacific Tea Co., Inc. v. Federal Trade Commission, Justice Rehnquist disagreed with the majority's interpretation of Section 7 of the Clayton Act. He argued that this section was not intended to prevent mergers and acquisitions that could potentially reduce competition in a given market but rather those which would create or enhance market power or facilitate its exercise. The justice believed that there was no substantial evidence showing such an effect resulting from A&P's acquisition of two supermarket chains in Houston, Texas area as it did not result in any significant increase in concentration levels within the relevant geographic and product markets nor did it remove a vigorous competitor from these markets. Furthermore, he pointed out inconsistencies between FTC’s decision here and its approval of similar transactions elsewhere suggesting arbitrariness on their part.