The doctrine of this case has been referred to as "quantitative substantiality," and its exact contours were unsettled and controversial for many years[2] until the Supreme Court authoritatively explained it in United States v. Philadelphia National Bank.

[3] The importance of the decision and its place in antitrust jurisprudence have been characterized in these terms: Standard Stations is the richest and the most difficult of all the vertical integration cases.

[5] Defendant Standard Stations, Inc., a wholly owned subsidiary of defendant Standard Oil Company of California (Socal) (now named Chevron Corporation), managed gasoline filling stations that Socal owned and leased to independent businessmen.

[15] The present case, the Court said, was not identical: It is thus apparent that none of these cases controls the disposition of the present appeal, for Standard's share of the retail market for gasoline, even including sales through company-owned stations, is hardly large enough to conclude as a matter of law that it occupies a dominant position, nor did the trial court so find.

The cases do indicate, however, that some sort of showing as to the actual or probable economic consequences of the agreements, if only the inferences to be drawn from the fact of dominant power, is important, and, to that extent, they tend to support appellant's position.

[20]The Court then distinguished the economic setting and impact of tie-ins and requirements contracts, concluding that it was inappropriate to use the same legal standard for both.

In the case of the buyer, they may assure supply, afford protection against rises in price, enable long-term planning on the basis of known costs, and obviate the expense and risk of storage in the quantity necessary for a commodity having a fluctuating demand.

There had to be a likelihood, which in this case was established by the market setting: When it is remembered that all the other major suppliers have also been using requirements contracts, and when it is noted that the relative share of the business which fell to each has remained about the same during the period of their use, it would not be farfetched to infer that their effect has been to enable the established suppliers individually to maintain their own standing and at the same time collectively, even though not collusively, to prevent a late arrival from wresting away more than an insignificant portion of the market.

"[30] The effect would be to turn entrepreneurs into clerks, causing dilution of "local leadership" and a "serious loss in citizenship" to the "village."

"[29] He concluded with this warning: The requirements contract which is displaced is relatively innocuous as compared with the virulent growth of monopoly power which the Court encourages.

"[35] A number of commentators[36] and some courts[37] have interpreted the Standard Stations case as holding that a 6.7 percent foreclosure of the market is "quantitatively substantial" and therefore sufficient to support a judgment of violation of Clayton Act § 3.

[38]The Court then compared that fact pattern with the case before it, in which "the four largest banks after the merger will foreclose 78% of the relevant market," and it found a Clayton Act violation based on the inference that the effect "may be to substantially lessen competition.

"[39] This analysis suggests that the Court considered the basis of the violation in Standard Stations to be the "collective although not collusive" foreclosure of 65% rather than the defendant's approximately 7%.

The district court and court of appeals found a § 3 violation on the basis that one million tons of coal per year and $128 million worth of coal over the 20 years were substantial enough so that the effect of the contract would "be to substantially lessen competition," in violation of the Clayton Act.

[Quoting Standard Stations] [T]he competition foreclosed by the contract must be found to constitute a substantial share of the relevant market.

This combination dictated a finding that "Standard's use of the contracts [created] just such a potential clog on competition as it was the purpose of § 3 to remove" where, as there, the affected proportion of retail sales was substantial.

[I]t clearly appears that the proportionate volume of the total relevant coal product as to which the challenged contract preempted competition, less than 1%, is, conservatively speaking, quite insubstantial.

A more accurate figure, even assuming preemption to the extent of the maximum anticipated total requirements, 2,250,000 tons a year, would be .77%.

sees an annual trade in excess of 250,000,000 tons of coal and over a billion dollars—multiplied by 20 years, it runs into astronomical figures.

nor myriad outlets with substantial sales volume, coupled with an industry-wide practice of relying upon exclusive contracts, as in [Standard Stations].

[41]As in the Philadelphia Bank case, the Court here does not interpret Standard Stations to hold that 6.7% of sales in a market or a corresponding dollar amount supports a finding that a requirements contract may substantially lessen competition.