Antitrust

First Amendment Immunity for protects and boycotts regarding certain laws and practices

different from Trial Lawyers which was a commercially motivated boycott

Walker Process

firm allegedly procured a patent from the federal patent office by concealing the fact that the invention had already been publicly available for a time before the patent application o The firm then brought and infringement action against a competitor o Competitor counterclaimed that Walker had fraudulently induced a monopoly through patent o Court held that enforcing a patent procured by fraud could itself be exclusionary conduct constituting a Sherman 2 cause of action However -- infringement claims protected by Noerr, but if using Walker Process does not have to show the high bar of sham, must show: (1) the patent was procured through knowing and willful fraud, or (2) that the lawsuit was deceptive due to misrepresentations or fraud to legislature

Exclusionary Misuse of Institutions

firm may try to enlist the government or other institution to help in the fight against its competitors (lobbying for law that would disadvantage competitor or block a law favorable) Often protected by Noerr-Pennington -- thus P will have to prove either (1) that it was not a petition to the government at all or (2) it was a sham § that the petition was a sham 1. Misrepresentations to the agency or admin, but falsehoods are not relevant when petitioning the legislature 2. Petitioning private SSO to refuse to deal with rivals Bogus Patents = Attempts to enforce a fraudulently obtained patent could be exclusionary conduct

Market Share of Monopoly

>/= 70%

Where the state delegates authority to a local government entity or agency, and that entity purports that some restraint of trade was made pursuant to that delegation

(1) THEN D MUST PROVE the challenged conduct was taken pursuant to a clearly articulated policy of the state that authorized it

Clear Incompatibility of antitrust and other regulations exists where . . .

(1) The antitrust challenge is to an area of conduct squarely within the heartland of the other area of law; (2) There is a clear and adequate agency authority to regulate; (3) There has been active and ongoing agency regulation; and, (4) There is some serious conflict between the antitrust and regulatory regimes.

Sherman Act Section 1

(1) contract/combination; or, (2) conspiracy in restraint of trade

Market Power Test

(1) define the product market in which D competes in = the collection of products which D's customers would buy if D raised prices (2) Define the geographic market D competes in = collection of sellers or potential sellers over some geographic area which D's customers could turn (3) D's market share indicates if it raised price then it would not lose business HHI and SSNIP tests

Sherman Act Section 2

(1) monopolize; or, (2) attempt to monopolize; or, (3) combine/conspire with other persons to monopolize

Exceptions to Noerr

(1) sham (2) purported petitioning conduct in and of itself constitutes an antitrust violation Trial Lawyers Association - boycott for higher wages (3) purported petitioning conduct occurred in some context that was too far removed from the traditional venues of political communication, such as a behind-closed-doors meeting of a private SSO Allied Tube - used SSO to pass regulations prohibiting the use of the competitor's product

When is Noerr a sham?

(1) the legal claim is objectively baseless (meaning that no reasonable litigant could expect recovery under it) (2) the plaintiff's subjective motivation in bringing the suit was anticompetitive

RPA

- It is not always discriminatory to charge one buyer a specific dollar price, then charge another a different dollar price for the same good or service (ex. If one customer is more costly to service) - Real concern with price discrimination is the concern that larger companies could drive out the small companies ex. Large retailer has purchasing power to buy in bulk and resell at low costs while smaller competitor retailers cannot - Robinson-Patman Act is the main tool to combat price discrimination - makes it illegal for a seller in domestic commerce to charge similarly situated customers different prices for the same good where the plaintiff can show that the discrimination will cause competitive injury, unless the seller can make out one of several specific defenses

BMI

- The composers are competitors who agreed to fix the price of their products - However, the Court held that there were significant procompetitive effects and the per se rule should not be applied --> applied RoR - Blanket license made the copyright enforcement feasible - Court emphasized that the blanket license was a new product - To avoid per se application the blanket needs to at least have the option of buying the products separately (ex. Hulu, Netflix, and HBO with blanket subscription)

RPA defenses

1. Meeting competition = D must show the discrimination was undertaken in good faith to meet an equally low price of a competitor, or the services or facilities furnished by a competitor (must meet the price not beat it) 2. Cost justification = Requires proof of actual costs and the burden of making the showing is on the D 3. Changing conditions = Price changes from time to time in response to changing conditions affecting the market for or the marketability of the goods (ex. Perishable goods, seasonal goods, or distress goods)

Conspiracy to Monopolize Elements

1. P must show that two or more Ds conspired 2. with specific intent to secure a monopoly 3. and took at least one overt act in furtherance of their conspiracy (this does not need to be a harmful act, just acting towards conspiracy) 4. split as to whether P needs to show the likelihood of Ds achieving the monopoly (market power)

Licensing Issues

1. Refusal to license = Most courts recognize a rule of per se legality for unilateral refusals to license IP rights - although the SC has never held this explicitly; however, there is an exception where the firm holds monopoly power and its refusal amounts to exclusionary conduct 2. trade-restraining license terms = resale price restraints set by the patent holder on the licensee are allowed; however, resale price restraints made by patent holders cannot be coordinated between several patent holders o Generally territory and customer agreements are allowed - except for example if two sporting goods stores patented two different inflatable balls and worried about competition, so they each granted the other a license to produce both technologies but one sells in the West and one sells in the East (this would be illegal) 3. blocking patents, cross-licensing, and patent pools = different patents to make different things, so patent pools are made -- suspicious because it is concerned action -- raises flags if the patent pools do not involve blocking patents (no justification)

Factors when deciding if Noerr immunity should apply to the quasi-government agency:

1. Whether the actor would expect truthfulness (misrepresentations are not a big issue in legislature because there are high consequences) 2. Amount of actor's decision making discretion more discretion means more likely Noerr immunity 3. Extent to which the government decision maker must rely on participants for its access to information 4. Whether the circumstances allow the antitrust tribunal to determine that the petitioner's misrepresentation caused the plaintiff's alleged injury

Attempt to Monopolize Elements

1. engaged in exclusionary conduct 2. with specific intent to monopolize 3. and a dangerous probability of achieving monopoly power = D holds usually 20-40% of the relevant market + protected by entry barriers

Abuse of IP

1. nonuse (itself is not a violation, but if a firm buys up IP to exclude other firms it is illegal) 2. objectively baseless infringement claims -- will enjoy Noerr protection unless its a sham 3. standard setting/patent hold up = if the standard becomes significant and the patent holder can obtain market power (ask whether the SSO would have still adopted the patent if it knew of the firm's other patent rights)

Sherman 2 Elements

1. possession of monopoly power in relevant market (>60%) 2. willful acquisition of monopoly power (exclusionary conduct) 3. benefits from the conduct are pretextual or outweighed by their anticompetitive effects

Clayton Act Elements

1. show that the trans will lead to undue concentration in the relevant market = P shows evidence that the relevant market is concentrated and the merger will increase concentration 2. D must show evidence that the concentration does not show market power 3. if D can show this then P must prove a theory of harm 4. theories of harm = - horizontal = prove coordinated or unilateral effects - vertical = prove through foreclosure, collusion, info exchange - conglomerate = forestalling potential competition 5. Ds defenses = failing firm or efficiencies

HHI

= (1) define the relevant market; (2) measure each firm's share of that market; (3) square the shares; (4) add the squared shares together - Number usually ranges from 10,000 to 0 = the lower the HHI the less concentrated the market

Market Share of Market Power

>/= 30%

Market Share of Attempted Monopoly

>/= 50%

Horizontal Price Fixing

Agreement between competitive sellers of the same product or service as to the price at which they will - Agreement to share revenues remove the incentive to compete with each other on price - Horizontal agreement to take action whose only purpose is to affect price in some way (Socony)

Vertical Restraints

All vertical restraints subject to the rule of reason, except tying which is subject to the per se rule

Ancillary Restraints

Cases in which some arrangement overall is procompetitive - like the creation of a new business or the sale of an existing one - but some small part of it, in isolation, might seem anticompetitive § Where the small, ancillary part is reasonably related to the overall purposes of the procompetitive arrangement and not unreasonably harmful to competition, it will be subject only to the rule of reason If D Proves Following Elements the Ancillary Restraint will be Subject to RoR: (1) The restraint is ancillary meaning that it is essential or somehow closely related to some arrangement that is itself beneficial, like a new partnership or joint venture, or the sale of the business; and (2) The restraint is not unreasonably restrictive of competition in light of other alternatives that may reach the same results

Colgate Doctrine

Clarified Dr. Miles stating a rule that a manufacturer is free to announce the terms on which it is willing to sell its products and remains free to stop doing business with any distributor, even if its reason for doing so is a refusal to comply with suggested resale prices.

Standing/Remoteness

Courts applying the test usually look if there is a more direct plaintiff and if there is then they are likely to deny standing usually will deny P is they are not a competitor or purchaser in the market Courts should consider five factors: 1. Whether there is a causal connection between an antitrust violation and harm alleged and whether the defendants intended to cause that harm 2. The nature of the alleged injury including whether the plaintiff was a consumer or a competitor 3. The directness or indirectness of the asserted injury - how many links there are in the chain of causation between the injury and the alleged restraint 4. Whether there is some identifiable class of persons other than the P with a more direct injury because their self-interest would normally motivate them to vindicate the public interest in antitrust enforcement and whether denying the plaintiff a remedy under those circumstances is not likely to leave a significant antitrust violation unremedied 5. The risk of duplicative recoveries or the danger of complex apportionment of damages

Clayton Act Section 7

Covers Acquisitions (1) No person engaged in commerce or in any activity affecting commerce shall acquire, directly or indirectly, the whole of any part of the stock or other share capital; (2) No person subject to the jurisdiction of the FTC 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; (3) The effect of such acquisition may be substantially to lessen competition, or tend to create a monopoly (applies to commodities).

Exclusionary Innovation

Definition: Introducing technological changes or otherwise using technology strategically to make it more difficult for them to compete Refusals to license IP - effectively per se legal Eastman Kodak - court held that an IP owner merely enjoys a presumptive right to refusal

Exclusionary Pricing

Definition: Monopolist may try to exclude its rivals by setting its own prices so low that they cannot survive if they try to meet those prices - will eventually raise prices to recoup losses P must prove: (1) prices complained of are below rival's cost; (2) competitor had a dangerous probability of recouping its investment in below-cost prices § Predatory Pricing = price so low cannot compete § Predatory Buying = raising the price of necessary inputs so high rivals cannot afford them § Discount programs or loyalty programs that are really just predatory pricing

Exclusionary Distribution

Definition: Monopolist might try to exclude its rivals by closing off channels in the chain of distribution, denying them access to either customers or suppliers Generally if the arrangement does not have the effect of ensuring exclusivity, the court holds that it is really just a form of aggressive pricing - then would be analyzed under predatory pricing framework Could be form of tying here

Horizontal Mergers

General Dynamics - concentration alone as evidence is suspect - ask is it a depleting resource/will the number of shares be different in the future (ex. Mining oil) Baker Hughes - held that after General Dynamics an inquiry regarding a merger under Clayton has become a totality of the circumstances test, thus even a very high concentration will not support a challenge unless there is also substantial evidence of entry barriers and a convincing theory of harm Staples II - Staples and Office Depot were merging and could price discriminate against large B-to-B customers evidenced by S & O pressuring these customers to sign long term contracts.

Acquisitions of IP

IP is an asset within the meaning of the Clayton Act §7 therefore, acquisitions of IP whose effect may be substantially to lessen competition, or to tend to create a monopoly are illegal Patterns of acquisitions that create market power and exclude competitors can violate Sherman §1 & §2 However - Clayton seemingly only applies to acquisitions of IP - legitimate steps to protect one's own ideas are allowed no Sherman violation b/c there is no illegality re obtaining market power through superior skill

Direct Purchaser Rule

Illinois Brick Rule - if a direct purchaser sues and does not get a deduction in damages for passed on costs then the customers of the direct purchaser cannot also sue for damages o Court held that Illinois could not recover - even if the contractors themselves did not already sue, because contractors could sue, so allowing the indirect purchaser to sue would open the door for multiple recoveries Rule: where the plaintiff is a consumer it can sue for damages only if it purchased the good directly from the defendant that committed the antitrust violation not followed by many state courts

Not conspiracies

JV, oligopoly, parent -sub

Exclusionary Conduct Justifications

Legitimate where the conduct helps the defendant compete as to price or quality, improves consumer welfare (must be specific and substantiated, insufficient to offer generalities) court looks to the balancing of the conduct and justifications, asking whether the conduct was unnecessarily restrictive

Efficiencies Defense

Must show: (1) claimed efficiency is of the kind that the parties had previously achieved in past transactions, or if there is some other real-world basis for the argument; (2) efficiencies are cognizable - meaning they must lead to benefits of the kin antitrust seeks to generate; and, (3) efficiencies must be merger specific - meaning they must be efficiencies that cannot be achieved without the merger

Horizontal Price Fixing Exceptions

No defense that fixed price is reasonable. Exceptions: (1) BMI case (2) Ancillary restraints doctrine -- RoR (3) Health & Safety -- No less restrictive option (4) Joint refusal to deal (ex. Manufacturers boycotting a retailer) -- RoR

RPA §2(a) - price discrimination (most common)

P Must show: (1) reasonably contemporaneous = trans at issue occurred at the same time (2) completed sales (3) like grade and quality of the products (4) same seller, and different buyers (5) different price (6) competitive injury - primary line = (1) the discriminatory price the seller charges to its competitors' buyers is below cost and (2) there is a likelihood of recoupment - secondary line = injury to competitor of seller's favored buyer - terry line = injury to the customers of the seller's distributors (7) D may rebut (not in primary line) all defenses available

Rule of Reason

P can avoid proving market power if P can show direct harm to the market § RoR Requires P prove either (1) direct evidence of actual harm (sustained increase in price or decrease in output clearly caused by the restraint), or (2) proof of market power through the market share proxy test o Even proof of market power though is not necessarily enough o P must convince the trier of fact that defendants (1) were able to use their combined market power to harm the market and (2) that the harm outweighs any benefit o Evidence of intent is important, but not controlling Burden Shifting Steps: (1) P bears the initial burden of proving that (a) an agreement has had, or (b) is likely to have a substantially adverse effect on competition; (2) If P meets burden (1), then shifts to D to demonstrate the procompetitive virtues of the conduct; (3) If D produces procompetitive justifications, then P must show that the challenged conduct is (a) not reasonably necessary to achieve the stated objective, or (b) that the anticompetitive effects nonetheless outweigh the procompetitive virtues

Per Se Illegal

P must only show that the conduct occurred Does not have to show market power

Antitrust Injury

P must show (1) D violated antitrust law, (2) violation caused some injury to Ps business or property, and (3) the injury was of the kind the antitrust laws were designed to prevent

Quick View

P must show something slightly less than market power (1) if P can make a prima facie case by showing that the restraint is inherently suspect, then there is a presumption that the restraint is anticompetitive; (2) Then, D must put forward some plausible, legally cognizable theoretical justification for the restraint; (3) Then, P can show that the justification is inadequate and that the restraint likely will harm consumers, either as a matter of theory or on such evidence as is needed to show the harm is likely; a. If P succeeds, then D must put on a full evidentiary showing to prove that its justification is accurate; or, b. If P fails, then the case becomes a full RoR case P will have to show either (1) market power, or (2) direct evidence of actual anticompetitive effects Legally Cognizable show both that (1) the justification flows from the agreement itself, and (2) promotes a value of competition - meaning that it could improve D's ability to engage in price competition by improved product quality or information, reduced costs, or otherwise

Conglomerate Merger

P proving harm must first prove some min showing of concentration in the market o P must show that the acquiring firm has the characteristics, capabilities, and economic incentive to render it a perceived potential entrant on its own o P must show that the entering firm's pre-merger presence on the fringe of the target market in fact tempered oligopolistic behavior on the part of existing participants in the market o P usually also has to present proof of subjective intent of the entering firm

Boycotts

Per Se = Concerted Refusal to Deal - agreement among competitors or some other participants in a given market that they will refuse to do business with some third party who is involved in the market (must serve the parties' own commercial advantage) (ex. Insurer agreed with association of psychiatrists that the insurer would not reimburse the services of phycologists)/Trial lawyers Boycott per se rule cannot be applied without a horizontal agreement. Non-per se = SSO & Cooperatives and Trade Associations - group of professionals form a group to share information, resources, and negotiating power (membership rules)

Preemption by Antitrust law

Rice - State law is preempted by federal law only if it mandates or authorizes conduct that necessarily constitutes a violation of antitrust law in all cases, or if it places irresistible pressure on a private party to violate the antitrust laws in order to comply with the statute o Legislation will not be preempted under Rice though if it is found to be state action immune under Parker v. Brown

SSNIP

SSNIP test seeks to identify smallest market within which a hypothetical monopolist could impose a Small Significant Non-transitory Increase in Price This test starts by limiting the product market of a good to be as small as possible and then asks what would happen if a hypothetical monopolist increased prices by 5 to 10%. If the price increase is profitable - i.e. demand does not decrease or it decreases by so little that the increase in revenue outweighs the lost custom - then the market is defined. If not, then widen the market definition by including the next closest substitute and then continuing the test until the price increase is profitable.

Most Favored Nations Clause

Sellers promise no one else is getting a better deal § Issue if large customer says if seller sells to other customers then that big customer will get the same § So the seller will not want to give good deals to smaller buyers, because does not want to match that price for the larger customer

Conspiracy

Separate entities have a unity of purpose or a common design and understanding, or a meeting of minds in an unlawful arrangement Actual contract not necessary economically rational? plus factors?

Vertical Merger

Similar burden shifting framework to horizontal (however diff. b/c D's are at different levels of production or different markets so the concentration evidence will be different) - instead look at the concentration in the primary market (which is the market the court is worried will be impacted by the merger) AT&T - AT&T was the distributor, Time Warner was a content creator, and Turner Broadcasting was a programmer. Merger between A and TB = other distributors being foreclosed from negotiating with TB. Increased leverage theory = if TB raised prices to other competitors and lost business it could recoup that money with non-blackouts from A and A would benefit because it is now a supplier to its competitors through TB. TB could sustain longer blackouts with competitors and divert customers to A - but TB said it would not blackmail w/ blackouts and go to arbitration which is why P lost.

Where the state delegates authority to a private person, and that person purports that some restraint of trade was made pursuant to that delegation

THEN THE PERSON MUST SHOW (a) the challenged conduct was taken pursuant to a clearly articulated policy that the state authorized, and (b) the conduct is actively supervised by the state government Midcal Doctrine Rule: not immune if the state authorizes a private person to commit antitrust violation without oversight to pass doctrine the state authorized restraint on trade must: (1) be clearly articulated and affirmatively expressed as state policy § Clear articulation = must be made by state itself (a local government will not suffice) § Main issue is asking was the policy sufficiently clear - does not need to state explicitly its expectations § Needs to create a foreseeable result + affirmative addressing of the subject by the State (2) the policy must be actively supervised by the state itself § Active supervision = the mere presence of some state involvement or monitoring does not suffice § Requires that state officials have and exercise power to review particular anticompetitive acts of private parties and disapprove those that fail to accord with state policy

Failing Firm Defense

To establish defense merger parties must show that (1) the target firm is in imminent danger of failure; (2) the failing firm must have no realistic prospect for reorganization; and, (3) no viable alternative purchaser that poses a less anticompetitive risk

Horizontal Market Allocations

When market divisions are truly naked, the courts have not had trouble holding them per se illegal Palmer - Bar/Bri, leading national supplier of exam prep courses, agreed with an upstart provider of those courses in GA that the two of them would no longer compete in GA - Court held that agreement not to compete in one another's territories is unlawful on its face - This case is different than a bakery selling a business with a covenant to the new owner not to compete because the non-compete covenant is ancillary to the sale

State Action Parker Immunity

actions of state governments themselves are for the most part not under antitrust violations. Exception = when the governments try to deputize private persons to restrain trade, there is a greater likelihood that their actions will run afoul of antitrust.

RPA §2(f) - prohibits buyers from knowingly inducing or receiving discriminatory benefits

all defenses available 1. meeting competition 2. cost justification 3. changing conditions

Exclusive Dealing

bilateral or unilateral subject to the rule of reason o Not likely illegal if contract is short term or easily terminated

RPA §2(c) - prohibits fictitious brokerage or commission fees that are just disguised discrimination

effectively per se no defenses available

RPA §2(d) & (e) - prohibit promotional allowances that are really just disguised discrimination

effectively per se illegal only meeting competition defense available

MARKET POWER

is the ability of a seller to raise its prices without simply losing its business, which a seller without market power would be unable to do - per se offenses do not require proving market power

Non-price restraints/exclusive resale territory

manufacturer may agree with distributor that it will not allow any of its other distributors to sell its product in the same territory (this protects the distributor from intrabrand competition) + constraint of resale to only particular customers if dealer is meant to specialize only to particular customers business will try hard to build customer base and there will be less free-riders on advertising efforts (ex. If only sell to NY firms then NJ firms cannot benefit from lowering prices and selling to the NY customers) Continental TV - Dealt with vertical territory restraints. Held that realities must dominate the judgment and must be based upon demonstratable economic effect rather than formulistic line drawing. Also held Interbrand was to be the main concern of antitrust law, and intrabrand competition was to be given less concern. There are procompetitive effects of intrabrand competition restraints - may allow manufacturers to give distributors small bonus or incentive to encourage them to help enter new markets or compete more effectively in the current market.

Must restrain competition

not just injury to competitor - Brown Shoe Co. v. US (if the injury is only to the competitor and does not affect input or output to consumers there is no remedy under Antitrust law)

Philadelphia National Bank

quasi per se rule for some horizontal mergers we think that a merger which produces a firm controlling an undue percentage share of the relevant market, and results in a significant increase in the concentration of firms in that market is so inherently likely to lessen competition substantially that is must be enjoined in the absence of evidence clearly showing that the merger is not likely to have such anticompetitive effects § Later cases stated that concentration evidence alone should be viewed more cautiously

Tying

still under the per se test, but leaves a fair bit of room for ties the courts think are not harmful Elements: (1) There were two different products; (2) P was required to buy both to get the one it wanted (conditioning/forcing); (3) D had some power in the tying product market (if below 30% of market = safe harbor); (4) The arrangement affected a substantial amount of commerce. § If P proves all the elements then, D may attempt to rebut with business justifications = Necessary to preserve the quality and brand image of the seller's product - product won't work or will not work properly without the tying

Vertical price fixing/resale price maintenance (RPM)

supplier and buyer agree to prices to which a good is sold (may set a max or min price) Leegin - Held all vertical restraints (max and min vertical price fixing, territory restraints) are subject to the rule of reason. One exception = if a P challenging a tying arrangement can show that the D held market power in the tying product market, a rebuttable presumption arises that it caused anticompetitive effects.

Just because the tying product is protected by IP does not mean the plaintiff cannot make a viable tying claim

the patentee surrenders their lawful monopoly in whole by the sale of his patent or in part by the sale of an article embodying the invention, such that the patentee may not thereafter by virtue of their patent control the use or disposition of the article

If case is brought against D subject to the oversight of some other regulatory agency

then ask (1) whether the statute gives the agency its authority contains an explicit exemption that covers the challenged conduct, and if there is no such exemption, then ask (2) whether the other regulatory bodies' law has an intent to limit antitrust liability implicit in the law

If the state action rule is applying to a municipality

then only need to prove the clear articulation element *This rule seems to apply to state admin agencies as well

Exclusionary Refusal to Deal

violation = when monopolists refuse to deal with either customers or suppliers who work with their rivals Colgate = firms generally can choose who they deal with right to choose not to deal as long as it is not for the purpose of creating a monopoly refusal to start dealing vs. refusal to continue dealing - under Aspen Skiing it is worse in the court's eyes to refuse to continue dealing Essential Facilities Rule: D holds some special technological resource or some input that is very special, not duplicable, and essential in competition. Elements establishing liability: 1. Control of the essential facility by a monopolist (essential = no other alternatives, NOT just no other economically viable alternatives) 2. Competitor's inability practically or reasonably to duplicate the essential facility 3. Denial of the use of the facility to a competitor (D in control of the facility must be a competitor of the Ps trying to gain access - must be in both a horizontal and vertical relationship with Ps) 4. The feasibility of providing the facility (physically feasible and not unreasonably costly)

When are FRAND terms required

when an SSO adopts a firm's IP

Implied Immunity

§ Banks regulated by FTC § Labor unions exempt § Sports are allowed leagues § Issue is now these areas may be deemed per se legal § Congress may make other statutory exemptions to the Antitrust Laws § Does not apply to non-US entities

Exclusionary Conduct

§ Behavior that not only (1) tends to impair the opportunities of rivals, but also (2) either does not further competition on the merits or does so in an unnecessarily restrictive way § Aspen Skiing - exclusionary conduct requires profit sacrifice

Issues in RPM

§ Foreclosure - a retailer with market power might coerce a supplier into imposing RPM on its other retailers, thus eliminating price competition (market power showing would be 30% or more) § Open System - RPM without territorial restraints, so there are no procompetitive effects of the RPM because there is open competition in the territories, so the retailers do not have incentive for aggressive marketing and have no protection from free riding § Pervasive in an Industry - if every manufacturer offers the same incentive then the benefits of the incentive are lost § Hub-and-Spokes - player at one level vertically organizes horizontal agreements between many competitors

Types of Exclusive Dealing

§ Requirements contract - requiring purchaser to take its entire need of the good from a single supplier § Contract forbidding purchases from the supplier's competitors § Outputs contract - requiring the customer to take all of the supplier's output § Contract with penalties for purchasing elsewhere § Loyalty discount - induces exclusive dealing (if there is a large discount for exclusive dealing can violate the law even if the retailer is not selling below cost) § Bundling - discount on all products if the buyer buys together must apply the discount to the products in the bundle with competition and see if they are below cost, then if the practical effect of the bundle is exclusionary then it's tying