Antitrust - Pierce - Spring 2006_3

8/20/2019 Antitrust - Pierce - Spring 2006_3

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Antitrust Outline

Introduction....................................................................................................................................................3

I. Statutes............................................................................................................................................3A. Sherman Antitrust Act......................................................................................................3B. § 7, Clayton Act................................................................................................................3

C. FTC Act, § 5.....................................................................................................................3II. Universal Reuirements..................................................................................................................3

A. Reuirement o! Antitrust In"ury.......................................................................................3III. #conomics.......................................................................................................................................3

A. Basic Assum$tions...........................................................................................................3B. Bene!its o! Com$etition...................................................................................................%C. Intro&uctory Cases............................................................................................................%

Horizontal Agreements (§ 1)..........................................................................................................................5

I. Intro&uction.....................................................................................................................................5A. #conomic Assum$tions....................................................................................................5B. 'i!!iculties in Creatin( an& )aintainin( *ori+. A(.........................................................5C. er se v. Rule o! Reason- A $olicy analysis.....................................................................5

II. rice Fiin(.....................................................................................................................................5A. #arly Cases.......................................................................................................................5B. Foun&ational Cases........................................................................................................../C. )o&ern Cases. Tension an& truncate& R0R..................................................................../

III. )ar1et 'ivision 2y Com$etitors....................................................................................................7A. reB)I............................................................................................................................7B. )o&ern Rule.....................................................................................................................7

I4. Concerte& Re!usals to 'eal............................................................................................................7A. )o&ern Rule.....................................................................................................................7B. Ty$es- A(reements 2y rivals to........................................................................................C. Foun&ational Cases..........................................................................................................'. )o&ern Treatment............................................................................................................

4. #volution o! Rule o! Reason...........................................................................................................6A. 8uic1 9oo1: Analysis....................................................................................................6

Proving Concerted Action............................................................................................................................10

I. Summary.......................................................................................................................................;<A. Factors a!!ectin( Coor&ination.......................................................................................;<B. =ame Theory..................................................................................................................;<C. Turner>osner 'e2ate.....................................................................................................;<'. ur$ose o! *ei(htene& Scrutiny.....................................................................................;<#. arallelism lus 'octrine...............................................................................................;<F. Foun&ational Cases.........................................................................................................;;=. )o&ern Use....................................................................................................................;;

II. In!ormation #chan(e- An Intro&uction to !acilitatin( $ractices.................................................;?A. #arly Cases.....................................................................................................................;?B. 'octrine To&ay- =y$sum...............................................................................................;?

C. Invitations to Collu&e.....................................................................................................;?

Intrarand Agreements................................................................................................................................13

I. Resale rice )aintenance.............................................................................................................;3A. )inimum rice )aintenance.........................................................................................;3B. )aimum rice )aintenance........................................................................................;3C. R) an& Antitrust In"ury...............................................................................................;3

II. @onrice Restraints.....................................................................................................................;%A. #clusive 'istri2utorshi$s.............................................................................................;%

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B. Territorial an& Customer Restrictions............................................................................;%III. ostSylvania Cases......................................................................................................................;%

!ergers..........................................................................................................................................................1"

I. The Structural resum$tion..........................................................................................................;/A. Rule................................................................................................................................;/

B. #mer(ence......................................................................................................................;/C. #rosion o! the resum$tion............................................................................................;7'. Resur(ence.....................................................................................................................;7

II. )er(er Analysis un&er '0>FTC =ui&elines...............................................................................;7A. )ar1et Concentration. § ;.Tyin(...........................................................................................................?3F. Re!usals to 'eal.............................................................................................................?%=. )icroso!t........................................................................................................................?5

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I*O#+CIO

.I ,A+-,

.A ,&erman Antitrust Act

.; § ;#very contract, com2ination in the !orm o! trust or otherise, or cons$iracy, in restraint o! tra&e or commerceamon( the several States, or ith !orei(n nations, is here2y &eclare& to 2e ille(al. D4iolatorsE shall 2e &eeme&(uilty o! a !elony, an& D$unishe& 2y a !ine an&>or im$risonmentE.

.? § ?#very $erson ho shall mono$oli+e or attem$t to mono$oli+e, or com2ine or cons$ire . . . to mono$oli+e any $art o! the tra&e or commerce amon( the several States, or ith !orei(n nations, shall 2e &eeme& (uilty o! a!elony.

.3 ey 'i!!erences.a Collective v. Unilateral Con&uct- § ; reuires collective action Gi.e. contract, com2ination or

cons$iracyH hile § ? is $rinci$ally concerne& ith unilateral con&uct..2 A(reement v. )ono$oly- § ; &eals ith unreasona2le tra&e restrictions hile § ? &eals ith

mono$oly or attem$te& mono$oly.

.% § / Claton Act

• Inci$iency statute allo $revention o! acuisition or mer(ers hen the e!!ect o! such acuisition may 2e to

su2stantially lessen com$etition, or to ten& to create a mono$oly.:

.C $C Act/ § 5

.a Un!air metho&s o! com$etition in or a!!ectin( commerce, an& un!air or &ece$tive acts or $racticesin or a!!ectin( commerce are here2y &eclare& unla!ul.: ;5 USC § %5.

.2 0nly FTC can use.

.c Can 2e use& to $urse Sherman violations.

.II +I-*,A2 * -+I*-!-,

.A *e4uirement o Antitrust In6ur

.; %*+,7IC8 CO*PO*AIO . P+-%2O %O729O9!A GSecon& most im$ortant antitrust case a!ter SylvaniaH. $: Brunsic1 starts 2uyin( u$ ol&, !ailin( 2olin( allies, $articularly those hich oe& it alot o! money. ue2lo 2rin(s suit &eman&in( three times the reasona2ly e$ecta2le $ro!its.: These $ro!its is the &i!!erence 2eteen su$racom$etitive $ro!its, i.e. the $ro!its they oul& have earne& i! !ailin( 2olin( allies ere alloe& to !ail an& they coul& char(e a lot, an& the $ro!its they oul& (et i! Brunsic1 stays in the mar1et.*: must sho in"ury resultin( !rom re&uction in com$etition, not increase in competition.A: Ct. thros case out 2ecause is com$lainin( a2out in"ury !rom increase in com$etition. Theantitrust las ere enacte& !or the $rotection o! competition not competitors.: )ost !reuently cite&line in ' 2rie!s in su2seuent cases.:

• Result o! case is that in or&er to $revail in a $rivate action, must (enerally have a hy$othesis

o! anticom$etitive e!!ects. must &emonstrate harm to the com$etitive $rocess as a hole.

• Case is a (oo& eam$le o! euili2ratin( ten&encies.: Court ants to 2rin( s in 2etter

2alance ith 's.

.III-COO!IC,Antitrust $romotes com$etition out o! the 2elie! that com$etition $resses $ro&ucers to satis!y consumer ants at theloest $rice hile usin( the !eest resources.

.A %asic Assum;tions

.; Cartels.a Cartels must e ale to reduce out;ut eit&er individuall or collectivel.

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• In )icroso!t, court !oun& co. ha& unilateral mono$oly $oer. Internal cor$orate emails

cite& this. )icroso!t coul& re&uce its on out$ut an& raise $rices.

• This as not the case in 4itamins or A').

.2 $our necessar means to control out;ut..i Set a $lan. Frustrate& 2y com$etitorJs &i!!erin( cost structures an& achievin( consensus on

mar1et allocation.

.ii )onitor

.iii unish &eviants

.iv Co$e ith entrants

.% %eneits o Com;etition

.; #conomic Bene!its.a 9ess trans!er o! ealth !rom 2uyers to sellers.2 9ess Allocative #!!iciency 9oss

.? @on#conomic Bene!its.a revent Concentration o! Kealth.2 In&ivi&ual autonomy.c “Com$etition is &estruction in our in&ustry” generally rejected..& Unite& States v. Bron University G3& Cir. ;663H

$: Ivies "ointly consi&ere& an& aar&e& a&mitte& stu&entJs !inancial ai&. ur$ose as to

eliminate $rice com$etition !or stu&ents.H: 0verla$ a(reement shoul& (et Sherman ece$tion. Because a(reement restrainscom$etitive 2i&&in(, it is anticom$etitive on its !aceL there!ore 's must sho com$etitive "usti!ication. But $roCom$etitive usti!ications outei(h- Im$roves uality o! e&ucation 2yincreasin( ethnic an& income &iversity A@' )aimi+es ai& to nee&y stu&ents.

.C Introductor Cases

.; 4itamins

.? Boein(

.3 A')

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HO*Iing !ar?et #ivision Concerted *eusals to #eal

Foundation Cases

Trenton otteries G;6?7HSocony4acuum 0il G;6%


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.2 Chica(o B&. o! Tra&e G;6;H. #very a(reement restrains tra&e an& there!ore § ; can only meanunreasona2le restraints. True test o! le(ality is hether the restraint im$ose& is such as merelyre(ulates an& . . . $romotes com$etition or hether Dit su$$resses an& &estroys itE. Case is cite&as ori(in o! !ull R0R. Reverse& loer courtJs eclusion o! evi&ence re(ar&in( the $ur$ose o! arule restrainin( $rice com$etition to the #chan(eJs 2usiness &ay.$actors:G;H All relevant !actors inclu&in( the con&ition o! com$any.

G?H @ature o! restraint- natural, $ro2a2le or actual e!!ect.G3H *istory.G%H ur$ose o! restraint.

.3 'e$ression#ra A!!irmation o! er Se Rule. A$$alachian Coals, Socony4acuum.

.% )o&ern Cases#mer(ence o! sli&in( scale.: C'A..a A22reviate& R0R.

.i Im$ortance o! characteri+ation 2e!ore &eci&in( a$$lica2le rule. B)I.

.ii 0nce 2ehavior is characteri+e& as anticom$etitive, ' must sho le(itimate "usti!ication to "usti!y !uller inuire. @CAA.

.2 er se con&emnation is ece$tional an& is arrante& hen &ecisionma1er is certain $ractice lac1sre&eemin( merit.

.% $oundational Cases

.; US v. Trenton otteries G;6?7H. AssocJn limite& sales o! sanitary $ottery only to le(itimate "o22ers:

an& !ie& their $rices. Stone hel& that $rice !iin( is $er se ille(al 2ecause it alays restrainscom$etition. )ar1et $oer or reasona2leness o! $rice is irrelevant..? A$$alachian Coals v. US G;633H. Coal $ro&ucers "oint sellin( a(ency re$resentin( 7%N o! re(ional

mar1et an& that oul& sell coal at the 2est o2taina2le $rice.: @otin( lac1 o! m1t. $r. an& le(itimateen&s o! $romotin( an or&erly m1t.: an& !act that ille(ality oul& &e$en& on e!!ects Ghich ha& not yet 2een $roven since it ha&nJt 2een im$lemente&H, Ct. alloe& SA. This is case is in &irect con!lict ithTrenton.

.3 US v. Socony4acuum 0il G;6%


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.ii @ot merely a SA li1e A$$alachian Coals, rather this is a hole ne $ro&uct an& restraint isnecessary !or ne $ro&uct.

.iii Achieves su2stantial e!!iciencies 2y loerin( en!orcement costs.

.iv @otes that 2ecause o! '0 &ecree, customers coul& $urchase in&ivi&ual licenses..c o ;ossile readings o! B)I

.i Broa& Ga&here& to most 2y loer courtsH- rice !iin( is tolera2le hen ancillary to achievin((enuine e!!iciencies.

.ii @arro- @e $ro&uct as 2ein( o!!ere& than any in&ivi&ual coul& have o!!ere& se$arately..3 Catalano, Inc. v. Tar(et Sales, Inc. G;6


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.3 0therise, courts (ive a rule o! reason a$$roach.

.% ;es: Agreements rivals to

.; Restrict>ithhol& su$$ly o! on out$ut. See SCT9A.

.? 'eny com$etitor access to 1ey in$ut. See lorJs.

.C $oundational Cases

.; #astern States Retail 9um2er 'ealers AssJn v. US G;6;%H. SC invali&ate& im$lie& a(reement to 2oycott su$$liers ho also sol& to $u2lic.

.? Fashion 0ri(inatorJs =uil& o! Amer. v. FTC GF0=A:H G;6%;H. =uil& mem2ers a(ree& not so sell toretailers ho sol& 1noc1o!!s. ur$ose as alle(e&ly to sto$ &esi(n $iracy. H: Boycott ille(al 2>c itrestraine& su$$liers an& retailers. A22reviate& rule o! reason 2>c SC eamine& mar1et share an&seemin(ly le(itimate $ur$ose, 2ut &i& not eamine 'Js $ro!!ere& "usti!ications. It also !ocuse& on $otential !or this a(reement to 2e use& to $olice $rice!iin(.

.3 8 2O* , IC. . %*OA#7AB9HA2- ,O*-, G;656H. 'iscount retailer alle(e& that &e$artment storechain use& 2uyin( $oer to coerce a$$liance manu!acturers not to sell to retailer. H: A(reements havelon( 2een hel& to 2e in the !or2i&&en cate(ory: an& cannot 2e save& 2y shoin( GaH no e!!ect oncom$etition or G2H necessary !or le(itimate $ur$ose Gsuch as stimulatin( com$etition or loerin( $ricesH.: To !actors a!!ect a$$lica2ility o! case-

G;H 'eals ith hori+ontal versus vertical collusion. Case is unclear as to hich mattere&.

Su2seuent cases have (iven manu!acturers latitu&e in structurin( a(reements.G?H @arro Rea&in(- lor never trie& to "usti!y $ractice, so may2e it isnJt a $er se case.

.# !odern reatment

.; $C . I#IAA $-#-*AIO O$ #-I,, (DIF':H G;6/H. SC u$hel& FTC or&er !or2i&&in( rival&entistsJ collective re!usal to $rovi&e Orays to $atients an& insurers.: G;H SC use& R0Rty$e a$$roach. SC &ecline& to invo1e S 2>c it ha& (enerally 2een limite& tohen !irms ith mar1et $oer 2oycott su$$liers or customers in or&er to &iscoura(e them !rom &oin( 2usiness ith a com$etitors.:

G?H R0R &oesnJt nee& to 2e ehaustive !actual inuiry. SC !oun& that $ractice im$aire& mar1et 2y&enyin( it essential in!ormation then $lace& 2ur&en on ' to $rove countervailin( com$etitivevirtue.:

.? $C . ,+P-*IO* *IA2 2A7B-*, A,, GSCT9A:H G;66


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. -O2+IO O$ * +2- O$ * -A,OB)I su((este& a22reviate& R0R. Continue& ith @CAA.

.A Duic? 2oo?F Analsis

.; @ational Society o! ro!essional #n(ineers G@S#:H G;67H. Supra, $. /.

.? @CAA v. Univ. o! 01la. G;6%H. U o! 0 sue& claimin( that @CAA ille(ally limite& the num2er o! television a$$earances !or colle(es Glar(e schools (ot same attention as small schoolsH.

H: 'ecline& to a$$ly $er se 2ecause here hori+. restraint is necessary !or availa2ility o! $ro&uct. I! thatis the case, court may eamine e!!iciencies. @onetheless, #!!iciencies here arrante& con&emnation 2ecause a(reement-

G;H Circumstantial evi&ence o! anticom$etitive e!!ect. ;


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P*OI= COC-*-# ACIO

.I ,+!!A*B

.A $actors aecting Coordination

$actors $avoring;. Fe !irms?. ro&ucts- homo(enous, sim$le, no com$lements.3. #cess ca$. GmanyH%. 'eman&- inelastic an& $re&icta2le5. Trans$arency/. )any small &eals7. Small 2uyers

$rustrating;. )any !irms?. ro&ucts-

a. *etero(eneity an& com$leity*ar&er to uanti!y cheatin(. 2. Com$lementsFacilitate cheatin( throu(h &iscounts to

com$limentary $ro&ucts.3. #cess ca$. Gin&ivHCartel canJt sell more to $unish cheaters.%. 'eman&- elastic an& un$re&icta2le.

a. I! &em. elast. then consumers can sitch. 2. Cartels li1e $re&icta2ility.

5. 0$aue transactions. #aser to cheat./. Bi(, lar(e &eals7. 9ar(e 2uyers. Better to &eal ith little consumers ho have less

levera(e.

.% =ame &eor

.; ohn @ash. Focal $oints, $risonerJs &ilemma..? Coase an& Kiliamson. Firms ill !in& a ay aroun& sanctions.

.C urnerGPosner #eate

.; Turner .a Unreasona2le to con&emn in&ivi&ually rational &ecisions merely 2ecause they coinci&e& ith

otherJs actions un&er § ;..2 #!!ective relie! im$ossi2le. CanJt en"oin !irms !rom $ayin( attention to com$etitors actions.

'issolution or reor(ani+ation oul&nJt ma1e sense either..c Thou(ht real solution as to char(e ith mono$olistic 2ehavior un&er § ?.

.? osner..a 0li(o$olist 2ehavior reuires a&&itional action. S$eci!ically, !irms oul& o!!er to re&uce out$ut

2y actually &oin( so an& another rivalJs su2seuent $arallelism as an action a1in to a res$onse..2 This 2ehavior as not structural 2ut coul& 2e cur2e& throu(h e!!ective reme&ies.

.3 Result. Turner has on since mere $arallelism is not enou(h to esta2lish cons$iracy.

.# Pur;ose o Heig&tened ,crutin

.; Co$$erel& v. In&e$en&ence Tu2e G;6%H. In&. Tu2e sue& Co$$erel&, Re(al Ghollyone& su2H,an& m!r. ar(uin( that C an& R cons$ire& to in&uce Q to 2rea1 to IT.H: G;H arents an& hollyone& su2s cannot !orm a § ; cons$iracy.

G?H *as 2een eten&e& to inclu&e $artiallyone& su2s, sisters an& commonly controlle& cor$s.

.- Parallelism Plus #octrine

.; 'octrine Summary.a American To2acco, Theater #nter$rises an& Interstate Cir. esta2lishe& 2y three !ocal $oints

.i )ust sho concerte& action: Coor&ination 2y means other than &irect assurance

.ii must $resent evi&ence hich ten&s to G;H eclu&e $ossi2ility o! in&e$en&ent action an& G?Hreasona2ly ten&s to $rove that 'Js acte& conscious in concert to !urther unla!ul scheme.

)onsanto.iii )ere $arallelism, even conscious, is not enou(h unless $lus !actors: eist..? ,ummar o Plus $actors

.a 'i& 'Js have a rational motive to en(a(e in cons$iracy Cf. )atsushita.

.2 Koul& con&uct contra&ict 'Js interest i! $ursue& unilaterally Toys R: Us

.c Uni!orm $ricin( here im$ro2a2le ithout cons$iracy. American To2acco Guni!ormly hi(her $rices &es$ite loerin( costsH.

.& Re2uttal to lus Factors- ' shos that con&uct consistent ith $rocom$etitive or com$etitionneutral o2"ectives.

.e SC has not ran1e& these !actors.

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.$ $oundational Cases

.; -arl Princi;les.a Cts. allo in!erences o! cons$iracy here circumstantial $roo! su$$orts that an ille(al a(reement

as more li1ely than not..2 Cts. &ecline& to !in& a(reement hen only shos $arallelism.

.? I-*,A- CI*C+I . +.,. G;636H. #hi2itors reueste& that !ilm &istri2utors chan(e their terms.'istri2utors then chan(e& $olicy to a(ree ith reuest. U.S. sue&.H: Ille(al a(reement eiste& to !i $rices.*: Ty$es o! circumstantial evi&ence

• #lements o! $lan 1non to all.

• )otive. Strong motive here to increase profits.

• Ra&ical &e$arture !rom $revious 2usiness $ractices uni!ormly a$$lie&. All exhibitors

changed pricing simultaneously.

• 9ac1 o! alternative e$lanation. o other plausible explanation offered.

• Com$leity o! $lan. =oes to li1elihoo& that actions ere ta1en in concert.

• @ecessity !or cons$iracy !or success. !f there "asn#t conspiracy$ pricing structure "ould

bea% do"n.

• 'Js !aile& to call to$ o!!icers to testi!y that there as no a(reement.

• See $.?5< !or sho$$in( list o! !actors. @ote that court &oesnJt $rioriti+e !actors.

.3 A!-*ICA O%ACCO . +.,. G;6%/H. 3 to2acco com$anies ith /N o! the to2acco mar1et ha&chan(e& $rices essentially simultaneously, even hen to2acco costs &ecrease&. SC u$hel& "uryconviction hol&in( that evi&ence ten&e& to su$$ort a(reement to !i $rices.H: In!erence o! cons$iracy is arrante& hen evi&ence shos cons$irators ha& a unity o! $ur$ose or a common &esi(n an& un&erstan&in( or a meetin( o! min&s in an unla!ul a(reement.:-: G;H #conomics. &rice raising ma%es no sense unless done in concert.

G?H Simultaneity. &rice increases happened simultaneously..% H-A-* --*P*I,-, . PA*A!O+ $I2! #I,*I%+I= G;65%H. Heig&tening o standard.-

Bou need more t&an ;arallel action. #hi2itor 2rou(ht $rivate tre2le action hen multi$le&istri2utors &enie& it !irstrun movies !or shoin( in theater. SC u$hel& "ury ver&ict !or 's citin(several !actors-.a 'Js a&vance& (oo& economic reasons 2ehin& each &istri2utorJs actions..2 @o evi&ence that 'Js 1ne a2out each otherJs action. 'his is a %ey ne" consideration.

.c 'Js o!!icers s$eci!ically &enie& ron(&oin(.

.= !odern +se

.; !A,+,HIA -2-C*IC I#+,*IA2 CO. .


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.c I *- %*A# A!- P*-,C*IPIO #*+=, AI*+, 2II=AIO G7th Cir. ;667H. Ct. u$hel&&enial o! S to ' 2>c Js ha& articulate& an economic rational theory o! collusion &es$ite lac1 o! &irect evi&ence here $harmacies alle(e& that 'm!rs.>&2trs cons$ire& to raise $rices herem!rs. re!un&e& to &istri2utors ho sol& to a$$rove& $harmacies. Ct. hel& that &istri2utors ereessentially cartelJs $olice an& &istri2utors coo$erate& 2>c they ris1e& 2ein( &isinterme&iate&.

.II I$O*!AIO -@CHA=-: A I*O#+CIO O $ACI2IAI= P*ACIC-,..A -arl Cases

.; American Column M 9um2er v. U.S. G;6?;H. Tra&e association hose mem2ers $ro&uce& ;>3 o! nationJs lum2er a&o$te& $lan reuirin( su2mission o! $rice lists, &etaile& &aily sales an& shi$mentre$orts an& monthly $ro&uction an& stoc1 re$orts. Assoc. com$ile& &ata an& release& ee1ly re$ortso! in&ivi&ual an& a((re(ate sales transactions. In mt(s., mem2ers ur(e& $ro&uction restriction an& $rice raises. H: lan violate& § ; 2>c it clearly evi&ence& common $ur$ose &es$ite lac1 o! e$licita(reement on $rice an& out$ut an& lo mar1et share o! mem2ers.

.? )a$le Floorin( )!rs. AssJn v. U.S. G;6?5H. Tra&e association &isseminate& re$orts on avera(e costs,sale $rices, stoc1s o! !loorin( an& a !rei(ht (ui&e, 2ut not $u2lishin( current in&ivi&ual transactions.Ct. hel& that in!ormation ere le(itimate su2"ects o! enuiry an& &i& not have anticom$etitiveten&ency.

.3 U.S. v. Container Cor$ G;6/6H. In!ormal $ro(ram here2y com$etitors share& sale in!ormation on

$articular customers hel& unla!ul in a hi(hly concentrate& in&ustry ith hi(h ecess ca$acityalthou(h entry as easy. H: ro(ram unla!ul attem$t at sta2ili+in( $rices. Concurrence GFortasH- @ote& that transactionlevel in!ormation sharin( shoul& not alays 2e ille(al Gi.e. $er seH, 2ut that itas in this instance 2>c U.S. ha& $roven e!!ect on $rices.

.% #octrine oda: =;sum

.; U.S. v. U.S. =y$sum G;67H. Be!ore (ivin( $rice concessions to in&ivi&ual 2uyers, (y$sum 2&. $ro&ucers oul& veri!y $rices ith each other. H: )ere echan(e o! $rice in!ormation >o intent to!i $rices, not S, 2ut R0R..a 4ali&ity o! $ro(ram &e$en&s on several varia2les.

.i Collectively hol& relatively mo&est share o! total sales in relevant mar1et

.ii Share in!ormation concernin( $ast, rather than current or !uture transactionsL

.iii Avoi& echan(in( in!ormation a2out $rices or 1ey cost elements that &etermine $rices

.iv Share in!ormation that a((re(ates activities or all $artici$ants rather than com$any s$eci!ic

&ata..? %2O!8-, $-*I2I


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I*A%*A# A=*--!-,

.I * -,A2- P*IC- !AI-AC-.

.A !inimum Price !aintenance

.; Origins o t&e *ule..a #* . !I2-, !-#ICA2 CO. . JOH #. PA*8 K ,O, G;6;;H. 'r. )iles contractually reuire&

retailers to o2serve $rice minimums.H: )inimum R) S ille(al 2ase& C9Js tra&itional hostility toar&s euita2le servitu&es onchattels. It &i&nJt focus on economic 2ene!its or harms, 2ut treate& them as secon&ary.Holmes dissent- G;H I! su2stitutes eist, R) shoul&nJt matter, G?H C9 actually tolerant to R)san& other retailer restrictions.

.? et Com;etitive -ect is &e2ate&, 2ut in some cases $ro2a2ly 2ene!icial..a Free ri&er $ro2lem. #ncoura(e a&&Jl svcs 2>c retailers canJt com$ete on $rice..2 Si(nal ima(e o! uality..c Facilitates ne entrants reuirin( retailer la2or to !amiliari+e customers ith $ro&uct..& Facilitate inter2ran& com$etition $otentially at the e$ense o! intra2ran&.

.3 ,tatus oda

.a Colgate Exception G;6;6H. )!rs. may set hatever criteria they ant, inclu&in( min. R) solon( as-.i Set unilaterally, not throu(h ne(otiations, an&

GH; Unclear an& seemin(ly ar2itrary &istinction..ii @o $ur$ose to create or maintain a mono$oly.:

.2 Sylvania rein!orces Colgate Exception.

.c )onsanto termination !or $rice cuttin( etremely &i!!icult to $rove.

.& rosecutions !or )in. R) etremely rare thou(h hori+ontal are common.

.% !a>imum Price !aintenance

.; Al2recht v. *eral& Co. G;6/H. S ille(al 2>c m!r. su2stitutes "u&(ment !or m1t. even thou(h &eliveryco. ha& territorial mono$oly an& coul& char(e su$racom$etitive $rices.

.? Atlantic Rich!iel& Co. v. USA etroleum GARC0H G;66c Js must $rove set $re&atorily lo Gi.e. harm!ul to

com$etitionH , an&,G?H Im$licitly uestione& Al2rechtJs is&om.

.3 ,A- OI2 . 8 AH GSC an& 7th Cir. ;667H. A(. 2>t (as retailer an& $ro&ucer here retailer a(ree& tore!un& &i!!erence 2>t a(ree& u$on $rice an& retail $rice.Posners loer ct. o;inion critici+e& Al2recht an&,C overturns. )aR) shoul& 2e "u&(e& 2y R0R 2>c

GH; )aR) S rule encoura(e& vertical inte(ration an& elimination o! !ree&om.GH? rice restraints can 2e 2oth harm!ul an& 2ene!icial to com$etition.GH3 Im;act: A!!ects all R) cases 2>c you can o!ten cate(ori+e as either min or ma.

.C *P! and Antitrust In6ur

.; Brunsic1. In"ury must result !rom re&uction in com$etition.

.? ARC0. A!!irms nee& to sho in"ury results !rom re&uction in com$etition. Case shos that thisreuires &e$th o! analysis similar to R0R.

.3 ace #lectronics v. Canon Com$uter Systems G?


14/26

.II O9P*IC- * -,*AI,

.A ->clusive #istriutors&i;s.

.; U.S. v. Arnol&, Schinn M Co. G;6/7H. Territorial restrictions are 0 as manu!acturer can choose hoto sell to, 2ut customer restrictions are $er se ille(al.

.? COI-A2 .. =- ,B2AIA G;677H. In an e!!ort to 2oost la((in( sales, Sylvania institute&!ranchisin( $lan here only one retailer $er territory (ot ri(ht to sell. It or1e& Gm1t. share ent !rom

? to 5NH.H: G;H R0R ei(hin( com$etitive e!!ects (overns non$rice restrictions. )ere$ +,-

GaH #ncoura(e& retailer investment an& $romotion in $ro&uct 2y sto$$in( !reeri&in(.G2H Foster inter2ran& com$etition 2y encoura(in( e!!icient vertical &istri2utorshi$s.GcH Facilitate ne $ro&uct mar1et $enetration 2>c they reuire more attention.G&H )ar1et $oer. ' ha& none, 2ut it coul& 2e relevant.

G?H Territorial an& customer restrictions are in&istin(uisha2le an& shoul& 2e R0R.G3H S shoul& only 2e a$$lie& here there are (rave com$etitive &an(ers, some verticalrestrictions may arrant, 2ut must 2e economically "usti!ie&.G%H #conomic analysis is 1ey Gas o$$ose& to 'r. )ilesJ $ro$erty laHG5H 'ecline& to overrule 'r. )iles an& a!!irme& &istinction 2>t $rice an& non$rice restraints.G/H 'istin(uishe& 2>t hori+ontal an& vertical. *ori+ontal, i.e. To$co, still ille(al.LLCase mar?ed resurgence o *ule o *easonLL

*emaining Issues:G;H rice v. @on$rice restraints &istinction as a!!irme& 2ut har& to maintain.G?H #!!iciency v. !ree&om o! action. KhiteJs &issent an& su2seuent rulin(s $oint out that notionso! in&ivi&ual li2erty are more entrenche& than economic e!!iciency an& shoul&nJt 2e tosse& asi&eli(htly.G3H Allocation o! 2ur&en unclear. 'i&nJt say hether ' or has 2ur&en on shoin( inter2ran& 2ene!its.

.3 a&&oc1 u2lications, Inc. v. Chica(o Tri2une Co. G7th Cir. ;66/H G#aster2roo1H. Smaller nes$a$er alle(e& § ; violation hen ? lar(er $a$ers each ere only to ith nesire contracts.H: Com$etition!orcontract core to antitrust las, lac1 o! access &urin( $erio& !osters, rather thanharms, com$etition. Further, a(reement is 0 2>c &oesnJt restrict in$uts Geither $arty can !reely $urchase or sell to othersH.

.% erritorial and Customer *estrictions

.IIIPO,9,B2AIA CA,-,.; !O,AO . ,P*AB9* I- ,-*IC- G;6%H. 9i1ely $ricecutter terminate& 2y su$$lier a!ter other

retailer com$laints. sues alle(in( termination resulte& !rom vertical $rice!iin( cons$iracy an&shos G;H $rice cuttin(, G?H com$laints 2y non$rice cutters, G3H termination an& G%H evi&ence o! &irecta(reement.H: G;H 4ertical $rice!iin( cons$iracies must meet hei(htene& evi&entiary stan&ar&.

G?H A su$$lierPs termination o! a &ealer !olloin( com$laints !rom the latterPs com$etitors is notitsel! a su!!icient 2asis !or in!errin( a(reement. #vi&ence must reasona2ly ten& to eclu&e $ossi2ility that su$$lier an& com$etitors acte& in&e$en&ently. *ere, there as a&&itionalevi&ence o! &irect a(reement an& thus ver&ict u$hel&.

G3H )otivate& 2y concern !or GaH ero&in( Sylvania an& Col(ate 2y ma1in( in!erence o! a(reementtoo easy an& G2H chillin( healthy su$$lierretailer communication.

: G;H 9imits 'r. )iles even !urther 2y ma1in( it etremely &i!!icult to sho a(reement.G?H oell as rea&y to overturn 'r. )iles 2ut hesitate& 2>c o! C(. an& issue not 2ein( $reserve& 2y $arties.

.? Business #lectronics v. Shar$ #lectronics G;6H. 'ealer terminate& a!ter others com$laine& a2out its $rice cuttin( Gli1e )onsanto 2ut >o ev. o! &irect a(.H.H: #ven a shoin( o! a(reement 2eteen a su$$lier an& a &ealer to terminate another &ealer isinsu!!icient unless it is shon that the su$$lier an& com$lainin( &ealer a(ree& a2out resale $rices.)any vertical restraints coul& 2e a2out $rice, unless $rice is e$licit, it (ets R0R instea& o! S.

;%


15/26

.3 !n re American Cyanami& GFTC ;667H. FTC consent &ecree !or2i&&in( re2ates to retailers !or salesa2ove su((este& $rices.

;5


16/26

!-*=-*,

.I H- ,*+C+*A2 P*-,+!PIO

.A *ule

.; Claton Act § . Khether the e!!ect o! the mer(er may 2e su2stantially to lessen com$etition in anyline o! commerce in any section o! the country.

.? -volution.a re;67


17/26

.3 U.S. v. 4onJs =rocery G;6//H. )er(e& com$any oul& have 7.5N o! 9A area. Ct. seeme& to euatenumerical &ecline in com$etitors ith &ecrease in com$etition. ,teart dissented sayin( this as notnecessarily so.

.% U.S. v. a2st Breery G;6//H. Ct. hel& that ?3.65N in Kisc., ;;.3?N in tristate an& %.%6N in countrysu!!icient to en"oin mer(er. *I=* KAT#R )AR 0F STRUCTURA9 R#SU)TI0@.

.C -rosion o t&e Presum;tion

.; +.,. . =--*A2 #BA!IC, CO*PO*AIO G;67%H. Steart rote that evi&ence o! concentration isnot a conclusive &eterminant o! a2ility to com$ete. 2ncommitted coal is the mar%et$ not coal

production.: Reha2ilitate& 2ur&en shi!tin( a!ter 3on#s an& &abst seeme& to ma1e it im$ossi2le.

.? +.,. . %A8-* 9H+=H-, G'.C. Cir. ;66


18/26

&istri2utors try to mer(e. H: #n"oine& mer(er 2>c o! anticom$etitive e!!ect on holesale &ru(su2mar1et..i )ar1et 'e!inition

GH; Inclu&es ca$tive out$ut as ell as committe& an& uncommitte& $artici$ants. !n this case$large chains have captive output because they could "arehouse and order goods

themselves.GH? Su2stitutes. For some consumers$ there are substitutes. 82'$ hospitals and independent

pharmacies non7"arehousing retail chains do not have substitutes and have becomeincreasingly dependent on "holesale distributors.

.ii Anticom$etitive #!!ectsGH; *i(h )ar1et Concentration. Citin( hila&el$hia @ational Ban1, 3


19/26

.i Su2stitutes. #ach cereal has its on $rivate la2el an& co$ycat com$etin( $ro&ucts.

.ii Retailer vies. =rocery store mana(ers testi!ie& that they &i& not see the to as com$etitors.

.iii @o cross elasticity in $rice.

.iv Consumers &onJt vie cereals as !irst an& secon& choices to each other..2 $C . ,AP2-,/ IC. G'.'.C. ;667H. Sta$les sou(ht to mer(e ith 0!!ice 'e$ot. Koul&Jve

2een a mer(er 2>t the to$ ? su$erstores ith 0!!ice)a as remainin( one.H: Ct. u$hol&s $reliminary in"unction reuirin( that there 2e a reasona2le $ro2a2ility that thechallen(e& transaction ill su2stantially im$air com$etition.3 considerations relevant to t&at determination:

.i =eo(ra$hic )1t.- Both si&es a(ree.

.ii Relevant ro&uct )1t.

• Sta$les0' oul& have only 5.5N o! total o!!ice su$$lies mar1et.

• @onetheless, a su2mar1et may eist. Citin( Bron Shoe, in&icia o! a su2mar1et are-

• Sensitivity to $rice chan(es. &rices higher in mar%ets "here there is only

one of the t"o companies. Suggests that real they are each other#scompetitors more than they are of all stores.

• #ntry. &rices lo"er "hen there is a threat of entry by another superstore.

• SS@I eists !or su$erstores.

• Similar Stores. 'i!!erent in $hysical a$$earance, num2er an& variety o!

SUs• Common Customers. Businesses ith less than ?< em$loyees.

• In&ustry reco(nition o! su2mar1et. #ach $arty re(ar&e& the other as its

main com$etitor..iii ro2a2le e!!ect on com$etition.

GH; Ct. shoul& consi&er **Is in each (eo(ra$hic m1t. Average ))! increase for merger is 4$9:;$ "ith some m%ts. as high as c maveric1 eists..C -ntrM# must s&o.

.; +.,. . 7A,- !AA=-!- G?&. Cir. ;6%H. )er(er o! to aste cos. For %N share in 'allasFt.Korth mar1et. ' conce&es mer(er ecee&s @B threshol& !or $resum$tive ille(ality an& attem$ts tore2ut usin( ease o! entry evi&ence.H: %.N share &oes not accurately in&icate mar1et $oer 2>c o! ease o! entry.

.a #ntry S*0U9' 2e consi&ere& in hether mer(er ill su2stantially lessen com$etition..i Khile SC has never rule& entry miti(ates anticom$etitive e!!ects, it has rule& that m1t.

must ta1e into account ca$tive out$ut.

;6


20/26

.ii Un&er =eneral 'ynamics, su2stantial mar1et share is not &is$ositive i! it is mislea&in( asto actual anticom$etitive e!!ect.

.iii )er(er (ui&elines reco(ni+e role o! entry..2 In this case, ease o! entry 2y in&ivi&uals an& lar(er com$anies oul& counter ris1 o!

anticom$etitive e!!ect. Ct. a!!irms that entry nee& not 2e uic1 an& easy.: It is uestiona2lethat $eo$le o$eratin( out o! (ara(e coul& really com$ete.

: This court misallocates 2ur&en. #ase o! entry may miti(ate anticom$etitive e!!ect, 2ut it is u$to ' to $rove it.

.? %a?er9Hug&es..a #ase o! entry as one !actor re2uttin( ea1 structural $resum$tion..2 Re"ects uic1 an& e!!ective: entry..c Fin&s that $ossi2ility o! entrants oul& constrain $rice increases 2>c !orei(n com$anies coul&

easily enter m1t. #ven i! they &i&nJt, threat oul& 1ee$ $rices lo..3 =+I#-2I-,. To years a!ter Ba1er*u(hes.

.a )er(er &oes not harm com$etition i! entry into the mar1et is.i so easy that the mar1et $artici$ants . . . coul& not $ro!ita2ly maintain: su$racom$etitive

$rices.: An&.ii Timely, li1ely an& su!!icient.:

.2 A$$roach &e$en&s on ty$e o! entrant..i Committe& oul& have to invest su2stantial onetime costs to com$ete. Factors-

GH; )inimum via2le scale.: § 3.3. Coul& committe& entrant 2e $ro!ita2le 2y ca$turin( 5No! mar1et N can 2e a&"uste&.

GH? Timeliness. § 3.?%. Coul& si(ni!icant im$act 2e ma&e >in ? years.ii Uncommitte& entrants

GH; 9ittle to no sitchin( cost.GH? Coul& enter >in ; year.

.c Reconcilin( =ui&elineJs re. > Ba1er*u(hes..i Timely. Car&inal *ealth. A$$lie& timely, li1ely an& su!!icient:.ii 9i1ely. Sta$les note& entry must li1ely avert: anticom$etitive e!!ects.

.% @ote that really hi(h concentrations have never 2een hel& to re2ut, thou(h in theory they coul&. Also,=ui&elines $lace much more em$hasis on s$ee& than cts. &o.

.# -iciencies

.; -volution o #octrine..a 'urin( structural era, SC seeme& to &iscount e!!iciencies as irrelevant. These &ecisions are

!ormally controllin( 2ut loer courts have loo1e& !or i((le room..2 roctor M =am2le G;6/7H ar(ue& e!!iciencies mi(ht actually 2e a reason to con&emn a mer(er. @o

court since has a&o$te& this vie..c )ore recently, some courts have consi&ere&.

.i University *ealth G;;th Cir. ;66;H. #!!iciencies are a !avor that may 2e use& to re2ut mar1etconcentration $resum$tion. *os$ital acuisition oul& have (iven ne com$any control o! %3N o! m1t. an& raise& **I nearly ?,5


21/26

.- $ailing $irms

.; 'e!ense to anticom$etitive mer(er

.? arties must sho that !ailin( !irm cannot-.a )eet its !inancial o2li(ations.2 Reor(ani+e in 2an1ru$tcy.c Fin& another 2uyer hose $urchase oul& $ose lesser anticom$etitive ris1s.& Kithout the mer(er the !irmJs assets ill eit the mar1et.

?;


22/26

#O!IA $I*! %-HAIO*

.I -2-!-,

.A !ono;olization

.; ossession mono$oly $oer..a 'e!ine )ar1et.2 'etermine )ar1et Share. )ar1et share is a rou(h $roy !or mar1et $oer 2ut ease o! entry,

eistence o! acce$ta2le su2stitutes also a!!ect mar1et $oer..? Kill!ul maintenance or acuisition o! mono$oly $oer throu(h somethin( other than su$erior $ro&uct,

2usiness acumen or historic acci&ent.

.% Attem;ted !ono;olization. *e4uires:

.; S$eci!ic intent, A@'

.? 'an(erous $ro2a2ility o! success.

.C -volution o ,tandards

.; )o&ern Stan&ar&- )icroso!t..a $roves

.i ' has mono$oly $oer.

.ii ' use& $oer to anticom$etitive e!!ect..2 ' o!!ers "usti!ications..c shos net anticom$etitive e!!ect.

.II !-A,+*I= ,+%,AIA2 !A*8- PO7-*

.A !ar?et ,&ares as Circumstantial Proo

.; Stan&ar& 0il G;6;;H..a )ar1et measure& in terms o! se(ment usin( ne crac1in(: technolo(y, not all out$ut. )1t.

share- 6


23/26

.a Intro&uces thrust u$on: &e!ense. Khere com$any that (ets mono$oly 2y su$erior $er!ormanceisnJt lia2le.

.C Predator Pricing

.; *ule: must meet hi(h stan&ar& 2y $rovin(-.a ricin( 2elo a$$ro$riate level, $ro2a2ly av(. varia2le cost. See Utah ie, Broo1e =rou$..2 Reasona2le $ros$ect !or recou$ment. Cf. )atushita, Broo1e =rou$.

.i @ote im$ortance o! structural con&itions, es$ecially li1elihoo& o! ne entrants. )atsushita..c @ote- 0nly one case in ;% years has on Gin the ;3 o! local $ie mar1et sue& hen Continental 2e(an sellin( $ies at much loer cost. SC !oun& C &iscriminatorily $rice& in or&er to in"ure its rival.0&& rulin( 2>c it seems to &iscoura(e entry hen $rices are su$racometitive.

.3 Schools o! Thou(ht.a Cost7based School . Aree&a an& Turner ar(ue that sellin( 2elo av(. var. cost shoul& 2e

$resum$tively ille(al..2 =ecoupment School . 'oes $re&atory !irm have a2ility to recou$ costs..c @o rule School. Bor1 ar(ues that there shoul& 2e no rule since $re&atory $ricin( is rare, an& 2>c it

encoura(es hi(her $rices..& >ame7'heoretic School. Fact s$eci!ic &eterminations are reJ&, 2ut school reco(ni+es that

incum2ents can 2eat eually e!!icient entrants 2y tem$orary $rice &ro$s.

.% !atsus&ita G;6/H. @ot mono$olist case, 2ut ct. seeme& to a$$ly @o Rule School !in&in( thatmono$olies are rare an& har& to maintain. It also note& structural eatures oul& ma1e it unli1elythat !irms coul& retain mar1et $oer lon( enou(h to recou$ investment.

.5 %*OO8- =*O+P 2#. . %*O7 K 7I22IA!,O G;663H. Failin( to2acco $ro&ucer sitches to $ro&ucin( (enerics, success!ully increasin( its m1t. sh. In res$onse, Brone M Killiamson &ro$s $rices an& 2e(ins to reca$ture mar1et. Internal &ocuments evi&ence intent to ta1e aay m1t. sh. an&the strate(yJs success.

H: Js must satis!y to not easy to esta2lish: reuirements..i must $rove that $rices com$lie& o! are 2elo an a$$ro$riate measure o! its rivalJs costs.:

Ct. didn#t define “appropriate$” though parties agreed it should be average variable cost..ii must sho that ' ha& reasona2le $ros$ect or &an(erous $ro2a2ility o! recou$ment. ?

argued that 8@( lo"ered prices to convince ? to raise its and therefore stop ? from getting

too much more m%t. sh. Ct. found no evidence that 8@( raised generic prices to

supracompetitive level.: - Sustaine& @04 o! "ury conviction Geven thou(h st&. as only coul& a "ury have rationally!oun&H.

./ American Airlines A)R a&&e& ca$acity on routes in res$onse to ne entrants. Ct. rule& !or 'Js!in&in( that 2elocost $ricin( ha&nJt 2een $roven an&, in any case, it coul& !in& no mana(ea2lestan&ar& re(ar&in( a$$ro$riate $ricin(.

.# Product #esign

.; ,ummar.a *ule. So lon( as $ro&uct &esi(n actually im$roves $ro&uct, cts. ill not !in& im$ro$er con&uct..2 Polic. 'onJt ant to &iscoura(e innovation. Ber1eyL IB).

.? Ber1ey hoto v. #astman o&a1 Co. G;676H. Ber1ey $ro&uce& !ilm !or o&a1 cameras. o&a1 2e(anra$i&ly chan(in( its $ro&uct &esi(n so that cameras only or1e& ith !ilm. B sue& ar(uin( thato&a1Js con&uct as eclusionary. H: Ct. !oun& con&uct acce$ta2le 2>c it &i& not ant to &iscoura(e

innovation 2y rear&in( !reeri&in( an& 2>c it coul&nJt &iscern or1a2le (ui&elines: !or 2usinesses to!ollo..3 Cal. Com$uter ro&s. Co. v. IB) Cor$. G;676H. Re!use& to !in& unla!ul IB)Js $ro&uct re&esi(ns

hich raise& costs !or $eri$herals manu!acturers. Ct. stresse& that IB)s $ro&ucts ere actually 2etter..% ATMT. Ct. !oun& ATMT $ro&uct &esi(n im$ro$er hen it actually &e(ra&e& $ro&uct $er!ormance in

or&er to eclu&e rivals..5 )icroso!t G;663H.

.- 2everagingGing

.; Rule

?3


24/26

.a There must 2e to &istinct $ro&ucts or services..i An issue in the )icroso!t case Gas the 2roser se$arate !rom the 0SH..ii This is really a ay o! as1in( hether to $ro&ucts should 2e tie& !rom an e!!iciency

$ers$ective Ge.(. 2uyin( to shoesH. See e!!erson arish GCt. !oun& se$arate 2>c $atientscoul& &i!!erentiate an& se$arately &eman& sur(eons v. anesthesiolo(istsH.

.iii See )icroso!t G$uttin( this analysis in the "usti!ication $ron( hich it create&..2 The seller must have a$$recia2le economic $oer: in the tyin( $ro&uct, such that !orcin(: is

li1ely..i There is a $erceive& sa!e har2or at 3


25/26

.iii Cts. shoul& 2e very ary a2out intervenin( 2>c ris1 o! !alse $ositives..& reem$tion o! Sherman 2y other le(islation

.i CanJt $reem$t unless e$licit. 0tter Tail.

.ii 4eri+on.? -A,!A 8 O#A8 . ,O+H-* PHOO !A-*IA2, G;6?7H. o&a1Js re!usal to sell to a retailer

hen the $urchase as $art o! a $lan to !orar& inte(rate o&a1 into the holesale 2usiness violate& §?. H: A re!usal to &eal violates § ? hen &one to !urther a mono$oly Grestates Col(ateJs intent testH.

.3 2O**AI JO+*A2 . +.,. G;65;H. )ono$oly nes$a$er re!use& to acce$t a&vertisements !romentities ho also a&vertise& on ra&io. Ct. !oun& $ur$ose an& intent o! $olicy as to &estroy ra&iostation an& that this as an unla!ul means o! maintainin( its mono$oly. Un&erstoo& in mo&ernterms, the nes$a$er as usin( its mar1et $oer to raise its rivals costs Gsince it nee&e& to (et morelisteners $er to (et a&vertisersH an& nes$a$er $rovi&e& no e!!iciency "usti!ication.

.% 0tter Tail v. U.S. G;673H. 0T, $oer $ro&ucer an& retailer, re!use& to service munici$al &istri2utionnetor1s in an attem$t to shore u$ its on retail &istri2ution netor1. Fe&eral oer Act reuire& it to $rovi&e $oer to munici$alities H: G;H Base& on ActJs intent to increase com$etition an& $rece&ential&is!avorin( o! alloin( statutes to trum$ Sherman, SC hel& FA &i& not $reem$t Sherman. G?H 0Tviolate& § ? hen it use& mono$oly $oer to &eter entrants 2y &enyin( them access to an essential!acility Gits holesale transmission linesH.: Re$eals o! the antitrust las 2y im$lication !rom a re(ulatory statute are stron(ly &is!avore&, an&have only 2een !oun& in cases o! $lain re$u(nancy 2eteen the antitrust an& re(ulatory $rovisions.:

@B, but see 4eri+on, infra..5 A,P- ,8II= . A,P- HI=H2A#, ,8II= CO. G;65H. 0ner o! 3 o! % resorts re!use& to o!!er

all area: $ass in con"unction ith %th. In !act, it even re!use& to sell it tic1ets at !ull $rice Gsu((estin(&esire to !ore(o $ro!its !or mono$oly $ro!its laterH. *i(hlan&s $resente& !airly sim$listic assessmentthat consumers ante& allarea $ass. H: A mono$olistJs re!usal to continue to $artici$ate in a "ointmar1etin( $lan ith its only rival coul& amount to mono$oli+ation hen the $ractice eclu&es a rivalon some 2asis other than e!!iciency Gi.e. re!usal to &eal only 0 i! there are le(itimate com$etitivereasons !or the re!usalH.

./ -A,!A 8 O#A8 . I!A=- -CHICA2 ,-*IC-, G;66?H G supraH. o&a1 ceases to sellre$lacement $arts to com$etin( IS0s. o&a1 as mono$olist, it tol& eistin( IS0 that they coul& nolon(er $urchase !rom them. 8uotes As$en on nee& !or le(itimate com$etitive reasons !or mono$olistJsre!usal to &eal ith rivals.

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.ii !E !ntegration and ovrerriding default bro"ser- :B Excludes on basis other than 6uality and has anticompetitive effect.

.2 ' may $ro!!er $rocom$etitive "usti!ication..i +E1 =estrictions-

GH; 1S rt. to use its !&. Can#t use it to violate antitrust.GH? Allo"ing changes reduces (indo"s stability. Ct- ot proven.

.ii !ntegration..c may sho net anticom$etitive e!!ect.

Antitrust - Pierce - Spring 2006_3

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