Antitrust

Aspen Skiing

A business's refusal to cooperate with competitors may constitute monopolization under § 2 of the Sherman Act if the refusal does not serve a legitimate business purpose. while a business is under no legal obligation to cooperate, a refusal to cooperate may be used as evidence to establish a business's use of monopoly power to further an anticompetitive purpose. Here, Ski Co. does not dispute that Ski Co. is a monopolist for skiing in the Aspen area. Instead, Ski Co. argues that its refusal to cooperate with Highland should not be viewed as anticompetitive under § 2. In summary, Ski Co. did not provide evidence of a legitimate business purpose for its refusal to cooperate, and the decision appears to have been motivated primarily by a desire to harm a smaller competitor and reduce competition long term.

Eastman Kodak Co. v. Image Tech. Service, Inc.

A company's lack of monopoly power in a primary market does not preclude a finding that the company possesses sufficient market power in a subsidiary market to violate antitrust law. Antitrust law disfavors legal presumptions that ignore the actual commercial realities of the relevant market. A tying arrangement is unlawful when the seller has considerable economic power in the market for the tied product, and a large portion of the market is affected by the arrangement. Did not provide convincing evidence that primary market competition precludes kodak from exercising monopoly power and there is evidence that Kodak has used its power to exclude competition from the subsidiary market, given that many ISOs were forced out of business after Kodak implemented the tying arrangement and began restricting access to parts.

American Tobacco co. v. u.s.

"Plus-factor." To prove a conspiracy to monopolize, the United States government must establish conscious parallel conduct plus other circumstantial factors that justify an inference of agreement. Proof of conscious parallelism alone is not sufficient for a conviction of conspiracy to monopolize. Here, "there was parallel conduct among the defendants given their effectively simultaneous raising cigarette prices to an identical price. Further, there were other circumstantial factors that justify an inference of agreement between the companies. First, the companies shared the method of selling only to jobbers. More importantly, the dominant cigarette companies' price-changing conduct was not only parallel but also unjustified by economic rationale. The identical and simultaneous price increases came during a historically inexpensive time to make cigarettes."

Timberlane Lumber v. Bank of America

A conspiracy that involves cooperation by a foreign government is not necessarily immune from antitrust regulation. Under the principle of comity, United States courts prefer to avoid passing judgment on the validity of actions by foreign governments. The state-action doctrine comes from this principle of comity. Governmental conduct is immunized by the state-action doctrine if the conduct rises to the level of an act of state. Governmental conduct is an act of state if the conduct is carried out in the public interest. However, for acts that are anything less than an act of state, the immunity does not apply. If a conspiracy involving foreign conduct is not immunized by the state-action doctrine, there is a three-step analysis to determine whether extraterritorial jurisdiction is appropriate. First, the plaintiff must demonstrate an actual or intended effect on American commerce. Second, the effect on domestic commerce must be an antitrust violation. Third, comity considerations are weighed using the following factors: (1) the potential for international conflict, (2) the nationality of the parties, (3) the competing jurisdictions' relative interest in adjudicating, and (4) the intentionality or foreseeability of anticompetitive harm to American interests.

Verizon v. Trinko

A defendant's refusal to coordinate with competitors generally will not violate § 2 of the Sherman Act. Section 2 prohibits a firm from monopolizing or attempting to monopolize a market. To prove a violation, a plaintiff must show that the defendant actually possessed monopoly power and obtained or maintained that power using anticompetitive means. However, a monopolist that obtains market power without resorting to anticompetitive methods has not violated § 2 of the Sherman Act. In a free market, allowing a firm to lawfully obtain and profit from monopoly power is a strong incentive for firms to take risks that result in innovation and economic growth. Here, there is no evidence that Verizon's refusal to coordinate with competitors was fueled by an anticompetitive intent or that Verizon ever would have coordinated with competitors in the absence of the 1996 Act. Additionally, the public is not losing something that was previously available, as the allegedly withheld services were only available to Verizon's competitors. In summary, while Verizon's actions may violate provisions of the 1996 Act, Verizon's actions do not violate § 2 of Sherman Act.

Lorain Journal Co v US, 1951

A firm with existing monopoly power engages in attempted monopolization if the firm uses its market power to eliminate a new competitor. Attempted monopolization violates § 2 of the Sherman Act. The Journal's policy is not merely a form of aggressive competition. Rather, the Journal's policy is intended to eliminate competition altogether.

E&L Consulting v. Doman Indus.

A manufacturer with a monopoly share of the relevant market does not violate antitrust laws by appointing an exclusive distributor, unless there is a showing of actual adverse effect on market-wide competition. There is a presumption that an exclusive distributorship agreement is legal. This presumption can be overcome by a showing that the agreement has an anticompetitive effect on the market as a whole. If a manufacturer already has a monopoly share of the relevant market, the market effect of the manufacturing monopoly is usually not exacerbated by creating a second monopoly at the retail level. In other words, because the monopoly manufacturer already controls output, it will continue to control output regardless of whether it has an exclusive distributorship arrangement at the retail level.

Allied Orthopedic Appliances, inc v. Tyco Healthcare Group LP

A monopolist's design change that improves a product by providing a new benefit to consumers does not violate § 2 of the Sherman Act. A design change that genuinely improves the product does not necessarily constitute monopolization, even if the change harms competitors. Absent some anticompetitive conduct, courts will not undertake a balancing of the procompetitive benefits and anticompetitive effects of the improvement. In this case, the district court did not err in granting Tyco summary judgment. Tyco's new oximetry system is an improvement in the pulse oximetry market. Although a patent is not determinative on this issue, that the U.S. Patent and Trademark Office found the design to be innovative enough for a patent is evidence of product improvement. Further, by placing calibration coefficients in the sensors, Tyco promoted sensor innovation and lowered costs for its customers over the long term.

Broadcom v. Qualcomm

A patent holder's deceptive conduct before a private standards determining organization can constitute actionable exclusionary conduct under § 2 of the Sherman Act. An entity violates the monopolization prohibition in § 2 of the Sherman Act if it willfully acquires or maintains monopoly power with predatory or exclusionary conduct. SDOs and the standards they implement further the consumer welfare and competition goals of the Sherman Act by improving the usefulness of products subject to the standards and increasing the number of consumers that can use the products. Further, standards make it easier for consumers to switch between competitive firms, thus increasing competition. However, given that standard setting is effectively an agreement among competing firms to not manufacture or sell certain technologies, the standard-setting process must be accomplished in a non-discriminatory manner so as to not run afoul of the Sherman Act. Standard setting is expected to be done in a collegial environment for the benefit of consumers and the economy; that expectation must be protected.

CSU, L.L.C. v. xerox

A patent or copyright holder's unilateral refusal to sell or license its patented invention or copyrighted expression is not unlawful exclusionary conduct under antitrust law. While intellectual property rights do not confer a right to violate antitrust laws, they do confer a right to exclude others from using an invention or expression. The right of exclusion exists even if that exclusion has an anticompetitive effect. For patents, the right exists even if the exclusion impacts multiple markets, so long as the impacted markets are within the scope of the patent. For both patents and copyrights, the intellectual property holder's intent is irrelevant to an antitrust analysis unless there is some indication of illegal tying or fraud.

Northwest Wholesale Stationers v. Pacific Stationary

A per se antitrust analysis may be applied to a group boycott only if the defendant's activity is of a type likely to produce primarily anticompetitive effects. However, some types of agreements have demonstrated such a strong likelihood of unreasonably restraining competition that the agreements are considered per se antitrust violations. Group boycotts are a well-established example of this type of agreement. In this case, Northwest's functioning as a cooperative creates market efficiencies by allowing Northwest's members to achieve otherwise-unobtainable economies of scale and granting members access to supplies on short notice. These functions allow smaller retailers to compete in the market and are clearly pro-competitive. Thus, Northwest's action should be analyzed under the rule of reason.

O'Neill v. coco-cola

A plaintiff alleging that a vertical merger violates antitrust laws must demonstrate that the alleged conduct proximately threatens the plaintiff with an antitrust injury. Here, plaintiff did not provide evidence that anticompetitive effects would occur.

realcomp II, ltd. v. ftc

A restraint of trade is unlawful under the rule of reason if the entity imposing the restraint has market power, if it causes actual or potential anticompetitive effects, and if the entity fails to demonstrate a countervailing pro-competitive justification. If a restraint of trade is not per se unlawful, courts can apply a quick-look analysis if it is economically obvious that the restraint of trade is likely anticompetitive. If the potential anticompetitive effects are not obvious, a court applies the rule of reason. Proof of actual anticompetitive effects is not required. The entity can rebut a showing of anticompetitive potential by presenting evidence of the restraint's pro-competitive benefits offsetting any likelihood of harm.

American Soc'y of mech. eng'rs v. hydrolevel

A settlement agreement among patent owners may violate antitrust law, even if the anticompetitive effects are within the exclusionary scope of the patent. Patent-related agreements are not categorically immune from antitrust liability, and any patent-related settlement agreement should be assessed with regard to both antitrust and patent law. In this case, Actavis and Solvay executed a reverse-payment settlement agreement to resolve litigation over Actavis's challenge to Solvay's patent for AndroGel. A reverse-payment settlement occurs when a suing party ultimately pays an allegedly infringing party to settle a patent-infringement claim. Most reverse-payment agreements occur within the framework of pharmaceutical regulation, often if the owner of a patent for a branded drug believes that there is a chance the patent is invalid or that a non-infringing generic version will decimate the value of the branded drug. Here, the settlement agreement between Actavis and Solvay has the potential for significant anticompetitive effects, as Solvay is essentially paying Actavis to stay out of the relevant market for a specified period. As a result, Solvay will be able to continue to charge monopoly prices to consumers. Also, the settlement payout is so large that it cannot be explained by traditional settlement justifications, which strongly suggests that Solvay's real motive is to maintain a monopoly. In summary, the danger to competition presented by a reverse-payout settlement agreement with a large and unjustified payout triggers antitrust concerns, and the agreement between Actavis and Solvay should be not be granted immunity solely because the terms of the agreement fall within the exclusionary scope of the patent. However, reverse settlement agreements are not presumptively unlawful and should be assessed under a rule-of-reason analysis, with consideration given to both the specific facts of the relevant market and the terms and justifications provided by the settling parties.

Jefferson Parish Hospital District No. 2 v Hyde (1984)

A tying arrangement is not a per se violation of antitrust law if the company lacks market power in the tying market. A tying arrangement exists if a seller agrees to sell a product or service on the condition that a buyer also purchase an additional product or service. Traditionally, tying arrangements have been considered per se antitrust violations if a seller has market power in the tying product. Market power is the ability of a seller to force a buyer to do something that the buyer would not do in a competitive market. However, there must be some potential for substantial anticompetitive effects in order to justify subjecting a tying arrangement to the per se rule without inquiring into the actual market conditions. Moving forward, assessing the legality of a tying arrangement under antitrust law will require a focus on the market of the tied products and the likelihood of anticompetitive effects in those markets. Look to RoR

State Oil v. Khan

A vertical maximum price-fixing arrangement is not a per se violation of antitrust law.

US v. Socony-Vacuum Oil Co.

Agreement to fix price ranges between midwest oil companies. Horizontal price-fixing agreements are per se violations of the Sherman Act. Section 1 of the Sherman Act prohibits concerted action between competitors that unreasonably restrains trade.

Leegin Creative Leather Products v. PSKS

An agreement between a manufacturer and a distributor on the minimum price that the distributor can charge for goods is not a per se antitrust violation. "it is now recognized that there are genuine pro-competitive benefits created by vertical-price agreements, and Dr. Miles is no longer good law. For example, resale-price limitations can foster competition among retailers of the same brand by encouraging retailers to compete on elements other than price that will benefit the consumer, such as customer service. Additionally, without resale-price limits, some retailers may price products lower than competitors by not investing in customer service and product demonstrations. In summary, it is no longer the case that minimum-price agreements for goods at resale tend to always restrict competition, and application of the per se rule is no longer appropriate."

Catalano, Inc. v. Target Sales

An agreement between competing wholesalers to stop supplying credit formerly granted to retailers is a form of price fixing that violates antitrust law. Prior to extinguishing the practice, the terms of such credit extensions had been a form of competition among beer wholesalers, and the credit terms between individual beer wholesalers and beer retailers tended to differ considerably. he price fixing does not need to be direct, and an agreement between competitors that has the effect of fixing prices also constitutes a per se antitrust violation.

US v. Topco

An agreement between competitors to divide up a market into exclusive territories is a per se violation of § 1 of the Sherman Act. In this case, the Topco members were essentially dividing up exclusive territories in which each member could sell Topco products. Additionally, Topco members were given a veto power over the admission of new members wishing to compete within 100 miles of existing members. The effect of the arrangement was to divide up the market for Topco goods into exclusive territories for Topco members. Topco argues that these territorial divisions were necessary for members to compete with larger grocery chains and that, as a result, the net effect of the arrangement was actually an increase in competition. However, there is no exception to per se antitrust violations for well-intended restraints that actually increase competition. Once an action has been identified as a per se violation, the action is deemed unlawful regardless of reasonableness or pro-competitive effects.

FTC v. Indiana Federation of Dentists

An agreement by an association of professionals to withhold information from insurers is an antitrust violation if the agreement has the effect of reducing competition among the association's members. Agreements among competitors are unlawful under § 1 of the Sherman Act if the agreements result in unreasonable trade restraints. Certain types of trade restraints are subject to the rule-of-reason analysis, which weighs likely anticompetitive effects against potential pro-competitive benefits. Here, the Federation's agreement should be evaluated under the rule of reason, as the agreement does not clearly fit into any of the established classes of per se restraints. However, the agreement is clearly anticompetitive, as it amounts to a refusal by Federation dentists to compete on the types of packages offered to customers, without resulting in any credible pro-competitive benefits. An agreement that limits consumer choice without any offsetting pro-competitive benefits cannot be upheld under the rule of reason.

U.S. v. American Airlines

An agreement is not an absolute prerequisite for the crime of attempted joint monopolization. To prove attempted joint monopolization, the government must prove intent and a dangerous probability that the attempt will be successful. A solicitation that, if agreed to, has a high probability of resulting in monopolization is sufficient. The United States alleged that Crandall had the intent to implement a price-fixing scheme between American and Braniff for flights in and out of DFW. Crandall and Putnam were the presidents of American and Braniff. Together, they had the means to carry out the proposed price-fixing scheme. Further, due to the market share of the two airlines, the implementation of Crandall's plan would have constituted a monopolization of the DFW market. Finally, it is sufficient for purposes of an attempted joint monopolization claim against Crandall that Putnam did not accept Crandall's proposal. That Crandall made the proposal and had the intent to carry it out is sufficient to constitute an attempt.

Standard Oil Co. (Indiana) v. U.S.

An agreement pooling patents and dividing royalties among the parties does not violate the Sherman Act unless it is used to create a monopoly or otherwise impose an unreasonable restraint on trade. If, together, the parties have monopoly power in a market, the pooling of their patent rights to maintain that market power can violate the Sherman Act. If, however, the combined parties do not hold monopoly power, there is no violation of the Sherman Act.

Allied Tube & Conduit Corp.

An anticompetitive restraint of trade orchestrated by a group lacking official governmental authority or public accountability is not entitled to the antitrust immunity generally afforded to a petition for government action. In Eastern R.R. Presidents Conf. v. Noerr Motor Freight, Inc., 365 U.S. 127 (1961), the Supreme Court held that concerted efforts in the petitioning of government officials to restrain or monopolize trade are not prohibited by antitrust law. As a result, only anticompetitive restraints arising from private actions may trigger antitrust liability. However, if an anticompetitive restraint is merely incidental to a legitimate effort to promote government action, no antitrust liability will attach. Here, the restraint on trade arose from the decision to exclude Indian Head's product from the Code. The proper context for analysis is the standard-setting process of a private association. Standard-setting processes can have a significant effect on trade, because the creation of a standard is a decision not to produce and distribute products that do not meet the standard. Here, the Association does not possess any official government authority, and the standard-setting process is carried out by members who have a personal, financial incentive to restrain trade. As a result, the antitrust immunity for petitioning government action does not apply.

Spectrum sports v. McQuillan

An attempted-monopolization claim requires showing anticompetitive conduct, a specific intent to monopolize, and a dangerous probability of actual monopolization. To establish the third element, a dangerous probability of actual monopolization, an antitrust plaintiff must properly define the product market, the geographic market, and the defendant's power in the market. Without a market definition, it would be impossible to analyze whether the defendant has come dangerously close to realizing an actual monopoly in that market.

McWane v. FTC

An exclusive-dealing arrangement is unlawful when a firm has monopoly power in a market and it reasonably appears that the firm uses the arrangement to maintain its monopoly power. An exclusive-dealing arrangement is not per se illegal and may even be beneficial to a competitive market. But in a noncompetitive market, such an arrangement can harm competition. For example, an exclusive-dealing arrangement can force a rival firm to raise its costs to a point where it cannot become a true competitor. Exclusive-dealing arrangements are analyzed under the rule of reason, with the addition that courts must also consider whether competitors have been substantially foreclosed. Under the rule of reason, the government has the initial burden of showing that the conduct harms competition. The company can rebut this showing by demonstrating procompetitive justifications for the conduct. The court then determines whether the procompetitive effects outweigh the anticompetitive effects.

U.S. v. Singer Manufacturing Co.

Anticompetitive conduct that exceeds that scope of the exclusive conduct granted by the patent laws can be subject to antitrust liability. In this case, the district court erred in dismissing the antitrust suit. Singer's outreach to Gegauf about the assignment of Gegauf's patent application and the subsequent assignment of that application constituted anticompetitive conduct outside the scope of conduct permitted by Singer's sewing machine patent. The assignment of Gegauf's patent application to Singer was a concerted effort by Singer and Gegauf to exclude Brother from the United States sewing machine market. As Singer already had a cross-license agreement with Gegauf, the assignment of the patent was not necessary to allow Singer to use Gegauf's technology. Rather, the true purpose of the assignment was to harm competition in violation of the Sherman Act.

Palmer v. BRG of Georgia

Bar prep companies case. An agreement between competitors to allocate geographic markets for the purpose of minimizing or eliminating competition is per se illegal under the Sherman Act. Market-allocation agreements are akin to price-fixing agreements because they have the purpose and effect of raising or otherwise manipulating prices. These agreements have no pro-competitive justification and function only to restrict competition. United States v. Topco Associates, Inc., 405 U.S. 596 (1972), which held market-allocation agreements to be per se unlawful

NCAA v. Board of Regents of the University of Oklahoma

By participating in an association that prevents member institutions from competing against each other, the institutions have created a restraint of trade called a horizontal restraint—an agreement among competitors which controls how they will compete with each other. Horizontal price fixing and output limitation are generally viewed by courts as "illegal per se" under antitrust laws because the likelihood of anticompetitive results is so high. A per se rule is applied when the practice facially appears to be one that would almost always restrict competition and decrease output. Here, however, a per se rule application is not appropriate. Rather, a Rule of Reason analysis must be utilized. Ct. weighs the anticompetitive effects and pro-competitive effects.

U.S. v. Grinell Corp.

Central Station services (i.e. fire, security). For purposes of assessing market power under § 2 of the Sherman Act, defining the relevant product market and relevant geographic market requires a consideration of both product interchangeability and the way the business is operated. The products consumers find reasonably interchangeable with one another define the relevant product market. Defining the relevant geographic market requires looking at things from the business's point of view. The question is whether operations are focused locally or the business is run using a wide geographic presence and nationwide operations.

U.S. v. Foley

Competitors are guilty of a conspiracy in violation of § 1 of the Sherman Act if (1) they accept an invitation to participate in a plan, the necessary consequence of which, if carried out, is a restraint on commerce, and (2) they knew that their cooperation was essential to successful operation of the plan. The government does not necessarily need direct proof of a conspiracy to establish a violation. Rather, the defendants' acceptance of the invitation and knowledge of the need for their cooperation permits a finding of a conspiracy.

Broadcast Music, Inc. v. Columbia broadcasting system

Creation of market/creation of market efficiencies. If an agreement tends to produce pro-competitive effects and increase market efficiencies without significant anticompetitive restrictions, then the agreement is likely not a per se violation and should be assessed for antitrust compatibility under the more flexible rule of reason. Under the rule-of-reason analysis, any anticompetitive effects are weighed against the pro-competitive effects to determine whether the restraint is reasonable. BMI's blanket license creates a more efficient market by providing an intermediary for users while relieving copyright owners of the need to constantly police and attempt to sell copyrights.

Rambus Inc. v. FTC

Deceptive conduct by a firm with lawful monopoly power that merely enables the firm to charge higher prices does not violate § 2 of the Sherman Act. A claim for unlawful monopolization under § 2 of the Sherman Act requires a plaintiff to demonstrate exclusionary conduct that enabled the firm to acquire or maintain monopoly power. Market power brought about by non-exclusionary means, such as possessing better products, business skill, or benefiting from historical accident, does not itself violate the Sherman Act. Rather, unlawful monopolization occurs only when exclusionary conduct distorts competition itself by creating a market situation in which other competitors cannot enter and compete fairly. In the context of an alleged deception, an antitrust plaintiff must demonstrate how the deception has suppressed competition in the relevant market. Deception that merely benefits a monopolist but does not harm competition itself does not rise to the level of unlawful monopolization.

US v. Waste Management

Ease of entry into the relevant market can rebut a showing of prima facie illegality of a merger under the Clayton Act. A showing that market entry is so easy that the merged firm would not be able to raise prices without losing business to new entrants is evidence that the merger is not anticompetitive. Indeed, restricting review of market share to a snapshot only of existing competitors may be misleading. "Here, The district court correctly found that entry into the Dallas County trash-collection market is easy, because not only can an entrepreneur begin a trash collection operation out of his home, but also large trash collection firms in nearby areas can easily expand into Dallas County. As a result, WMI and other trash collectors in Dallas County are unable to raise prices indiscriminately without fear of losing business. WMI's market share thus does not equate to market power, and the merger is not anticompetitive."

Interstate circuit, inc. v. U. s.

Evidence of a direct agreement to participate in a conspiracy is not necessary, but may be inferred from the acts of the conspirators. there was strong motive for concerted action among the distributors. It is elementary that an unlawful conspiracy may be formed without simultaneous action or agreement on the part of the conspirators. It is sufficient that the distributors knew that concerted action was contemplated and invited and each gave its adherence to the scheme and participated in it. Each distributor had knowledge that the other distributors were asked to participate and each knew that cooperation was essential to successful operation of the plan.

U.S. v. Visa

Here, Visa and Mastercard member banks are interested in issuing Amex cards, but the exclusionary rules stand in the way. Evidence indicates that Amex has succeeded in foreign markets where the exclusionary rules do not apply. The evidence further indicates that Amex's entry would stimulate competition at large. Therefore, the exclusionary rules harm competition in the market for network services. This shifts the burden to Visa and Mastercard to establish a pro-competitive justification. Visa and Mastercard claim exclusion promotes "cohesion" in the market for network services and fosters competition. However, this argument is undermined by the fact Mastercard member banks have been issuing Visa cards without harming competition. Similarly, competition was enhanced in foreign markets where the exclusionary rules do not apply. Therefore, the exclusionary rules harm competition by excluding Amex and Discover from the market for network services.

SCM Corp. v. xerox corp.

If a patent has been lawfully acquired, subsequent conduct permissible under the patent laws cannot trigger antitrust liability. Patent laws grant a patent holder the right to prevent others from making, using, or selling the patented invention. An acquisition of a patent can violate antitrust laws if, prior to obtaining the patent, the party already had a market share in the relevant market and knew that acquisition of the patent would grant it monopoly power. Obtaining an economic monopoly due to success of the patented invention, on the other hand, will not result in antitrust liability.

Polygram holding, inc. v. FTC

If it is obvious that a restraint of trade likely impairs competition, there is a rebuttable presumption that the restraint is unlawful. The defendant can rebut that presumption by presenting evidence of the restraint's procompetitive benefits that offset any likelihood of anticompetitive harm. The initial determination of whether a restraint is likely to impair competition is known as the quick look. If the quick look reveals that the restraint is likely to harm competition, a court undertakes a more in-depth analysis under the rule of reason. "the agreement appeared to be an agreement among competitors to fix prices. There was thus a presumption that the agreement was unlawful. PolyGram and Warner attempted to rebut that presumption by presenting evidence of the agreement's pro-competitive benefits. However, their attempt falls short."

Brown Shoe v. U.S.

In a fragmented market, the government may block a merger that achieves a very small percentage of market control if the merger reflects a potential trend toward concentration in the industry. The amendments to § 7 of the Clayton Act were intended to establish a tool for the government to curb market concentration by preventing mergers that are likely to produce anticompetitive effects. Congress also intended for § 7 to provide greater protection to small businesses, but § 7 is ultimately aimed at protecting market competition rather than market competitors. To determine the likely effects of a merger, consideration must be given to the context of the relevant industry. First, the proper geographic and product market must be defined in order to assess what aspects of competition might be affected. Post-merger market share is among the most important factors, but such market share should not be considered in isolation. If a market is highly fragmented, then a merger that achieves a smaller percentage of market control will have a greater effect on competition. Similarly, a merger that reflects a trend toward greater consolidation could have significant anticompetitive effects if left unaddressed. Congress also intended for § 7 to apply to the probability of future market harm, and the government thus does not need to show that harm will inevitably occur. The market for shoes is highly fragmented, and even a small increase in market share could have an adverse effect on competition among individual competitors. Additionally, the approval of the merger here could lead to the approval of additional mergers, and the concerns about market concentration that § 7 was intended to address would be undermined.

FTC v. superior court trial lawyers

Lawyers boycotting to get higher pay. A group boycott aimed at manipulating prices is a per se antitrust violation under the Sherman Act, even if the boycott includes a political message. The harm to competition that results from naked restraints of trade such as group boycotts and price-fixing conspiracies is not lessened by the incorporation of an expressive element.

FTC v. Hienz

Many courts recognize the availability of post-merger efficiencies as a defense to § 7 claims. The basic theory is that a merger should not be prohibited if the resulting efficiencies create pro-competitive market effects that outweigh anticompetitive effects. Recognized efficiencies include (1) better use of firm assets, (2) higher-quality products, and (3) lower production costs that lead to lower prices for consumers. However, any alleged efficiencies must be weighed against a merger's anticompetitive effects, and thus, a merger in a highly concentrated market requires proof of extraordinary pro-competitive efficiencies. The claimed efficiencies must not be obtainable from either merging company independently, which would mean that the pro-competitive benefits could be achieved without any loss in competition caused by the merger. A defendant seeking to prove that anticompetitive effects of a merger will be offset by post-merger efficiencies must offer more than mere speculation that the efficiencies will actually benefit competition.

Rebel Oil Co., Inc. v. ARCO

Product market determination. Must look at cross-elasticity of demand and of supply.

Volvo Trucks v. Reeder-Simco

Recovery under the act requires the plaintiff to prove, among other things, that it suffered a competitive injury. To prove competitive injury, the plaintiff can show a diversion of sales to, or a significant price reduction for, a favored competitor at the expense of a disfavored competitor. An inference of competitive injury may be drawn when the disfavored competitor suffers substantial discrimination over a period of time. Without a showing that the plaintiff is in actual competition with the favored competitor for the same customer, the plaintiff cannot prove the competitive injury needed to recover under the act.

American Needle v. NFL

Regardless of the legal structure of an entity or a set of entities, any contract, combination, or conspiracy useful to the entity may violate § 1 of the Sherman Act if the agreement deprives the marketplace of independent decision-making. Concerted action under § 1 does not turn on whether the parties are involved in legally distinct entities. Rather, the question is how the parties involved operate together. There have been instances when a single entity controlled by a group of competitors engaged in concerted activity that violated § 1. At the same time, there is not necessarily concerted activity simply because more than one entity is involved. Thus, the inquiry is whether the agreement, the "contract, combination . . .or conspiracy," is created through separate decision-makers with the result depriving the marketplace of independent centers of decision-making. Often, decision-makers in a true single entity have a unity of interest and are less likely to be engaged in concerted activity. Here, the NFL teams are independently owned and managed with unique economic interests and goals. The teams compete with each other not only on the field, but also to attract fans, for ticket sales, and for contracts with coaching talent as well as sales of trademarked merchandise.

Board of Trade of city of chicago v. U.S.

Restraints on the grain trading market. The fact that an agreement or regulation restrains trade is not solely determinative of whether the agreement or regulation violates antitrust law. Must look at all the effects and facts. "...the competitive benefits of the restraint outweigh the temporal restriction that the restraint imposes on price setting for to-arrive grain, and the Board's rule does not violate antitrust law. "

U.S. v. container corp.

The exchange of specific price information between competitors is a violation of the Sherman Act if the exchange chills price competition. the United States Supreme Court held that concerted action between independent parties that affects price competition is a per se violation of antitrust law. This holding is quite strict and applies even in situations in which the challenged practice does not completely eliminate price competition in the relevant market. It is also not necessary to prove that an actual agreement between the accused parties existed, as concerted action may be inferred by conduct. In this case, the container manufacturers engaged in a practice of sharing their price information with one another upon request. Although no formal agreement existed to conform to a specific price schedule or bind each competitor to the policy, the record shows that each of the container manufacturers generally provided its most recent price quote after a request by a competitor. This reciprocal conduct is enough to infer concerted action under the Sherman Act. It is true that in some markets, the exchange of price information will not have a substantial effect on price competition and thus will not be unlawful under the Sherman Act. However, in the market for container manufacturing, the products and services offered by competitors are roughly the same, such that price differential is the primary area of competition. Additionally, although prices in the market for shipping containers have trended downward for a number of years, the container manufacturers' information-sharing practice appears to have stabilized market prices as the prices descended, leading to price uniformity.

FTC v. Staples

The relevant product market in the assessment of a merger for antitrust compatibility may be narrowed to a submarket if the submarket more accurately reflects the line of commerce affected by the merger. "The question is whether price changes by one type of retailer will affect the prices charged for the same goods by another type of retailer. "

ZF Meritor v. Eaton

The rule of reason is the proper standard to be applied in an antitrust action based on exclusive dealing where pricing is not the predominant mechanism of exclusion. Under the rule of reason, an exclusive dealing arrangement is illegal if the probable effect of the agreement is to substantially lessen competition. Relevant considerations include the defendant's market power, substantial foreclosure of competitors from the market, the length of the agreement, and a balancing of the agreement's procompetitive and anticompetitive effects.

US v. Baker-Hughes

To rebut the United States government's prima facie case of the anticompetitive effect of a horizontal merger, the defendant must show that the prima facie case inaccurately predicts that the merger will harm competition. In a horizontal merger case, the government has the initial burden of showing that the merger will lead to improper market concentration in the relevant market. This showing creates a rebuttable presumption of the merger's anticompetitive effect. The burden of proof then shifts to the defendant to rebut the presumption. A prima facie case can be rebutted using several factors, including changing market conditions, the financial condition and conduct of companies already in the market, the nature of the product, market performance, and market efficiencies. An absence of significant barriers to entry in the market is also a factor, but a clear showing of this absence is not necessary to a rebuttal. To rebut the prima facie case, the defendant need show only that the government is incorrect in its prediction that the merger will harm competition. The ultimate burden of persuasion is on the government.

Bell Atlantic Corp. v. Twombly

To state a claim under § 1 of the Sherman Act, the complaint must contain enough factual material to suggest that an agreement existed between the defendants. Discovery is expensive and time-consuming. Thus the district courts must act as gatekeepers and dismiss claims that do not point to some fact that supports a plaintiff's claim. "Previous decisions have suggested that as long as a complaint leaves open the possibility that the plaintiff would find some fact to support recovery, the complaint cannot be dismissed. This way of pleading is no longer workable. Conclusory statements of claims will no longer survive a motion to dismiss. Instead, a complaint must contain enough facts to raise a reasonable expectation that the discovery process will reveal relevant evidence to support the claim."

Williamson Oil Co v. Philip Morris USA

To support a claim of price-fixing, a plaintiff must show evidence that tends to exclude the possibility that the defendants acted independently. Under antitrust law, price-fixing is an agreement or conspiracy between competitors to reduce price competition. In the context of a summary-judgment analysis, there is a three-step test for determining whether a plaintiff has supported a claim of price-fixing. First, the plaintiff must establish a pattern of parallel behavior by the defendants. Second, the plaintiff must show the existence of one or more plus factors that tend to exclude the possibility that the defendants acted independently. Third, the defendant may introduce evidence to rebut an inference of collusion when the first two steps are met.

U.S. v. H&R Block

Two products must be reasonably interchangeable in order to be included within the same product market for the purposes of an antitrust analysis under the Clayton Act. o determine whether a proposed merger is likely to violate § 7, a court must first determine the relevant product market in which to assess the likelihood of anticompetitive effects. The boundaries of the relevant product market are defined by establishing the reasonable interchangeability of a product and potential substitutes for the product. Under the hypothetical-monopolist test, courts examine whether it would be hypothetically profitable for a defendant to have a monopoly over a proposed set of substitute products. Specifically, the test considers whether a hypothetical monopolist of a proposed set of products could raise the prices of those products by more than 5 percent without losing a significant amount of customers to alternative products.

Hosp. Corp. of Am. v. FTC

Under an economic approach for determining whether a merger is unlawful under antitrust law, the primary question is whether the merger increases the likelihood of collusion in the affected market. Section 7 of the Clayton Act prohibits mergers that are likely to substantially lessen competition in the affected markets. Accordingly, a plaintiff must show that a merger creates a significant danger of substantial anticompetitive effects.

Brooke Group v. Brown & WIlliamson

Under antitrust law, the focus of the inquiry is whether the defendant's pricing has or is likely to harm competition. Accordingly, a plaintiff seeking to hold a defendant liable for predatory pricing must prove both that: (1) the defendant's prices are below a fair measure of its rivals' costs, and (2) the defendant had a reasonable probability of recouping its losses from charging low prices, which generally requires a showing of collusion with competitors. Without collusion over price, customers could merely take their business to a competitor.

Continental T.V. v. GTE Sylvania, Inc.

Vertical restraints challenged as antitrust violations should be assessed under the rule-of-reason analysis. However, a vertical restraint, such as a restraint on location for a manufacturer's own products, generally reduces intrabrand competition in order to increase interbrand competition. Intrabrand competition is reduced by a vertical restraint, because a location restriction reduces competition within the manufacturer's own brand. Interbrand competition, on the other hand, is increased by a vertical restraint, because the manufacturer can use a location restriction to establish more efficient distribution practices. Thus, the per se standard set forth in Schwinn is inappropriate for vertical restraints and is overruled. Vertical restraints are capable of both pro-competitive and anticompetitive effects, and the rule-of-reason standard allows a trier of fact to have greater flexibility in determining whether a specific vertical restraint is inconsistent with antitrust law.

California Dental Association v. Federal Trade Commission

advertising restrictions on dentists. Under a "quick-look" rule-of-reason analysis, an observer with a rudimentary understanding of economics would be able to easily conclude that the arrangements in question would have an anticompetitive effect on consumers and markets.

US v. E.I. du Pont de Nemours & Co 1956

cellophane fallacy. A firm has monopoly power under § 2 of the Sherman Act if the firm can control prices or exclude competition in a particular market. The first step in determining whether a firm can control prices or exclude competition is determining the relevant product market. A product market is largely determined by the interchangeability and cross-elasticity of demand for the products.

U.S. v. Phiadelphia

mergers that tend to significantly increase the concentration of firms in the relevant market should be enjoined, unless the defendant can show that the merger is unlikely to produce anticompetitive effects. This test is consistent with the relevant economic theory, which generally suggests that competition is benefitted when there are many market participants. In this case, the relevant market is the market for commercial-banking services in the Philadelphia metropolitan area. In the Philadelphia market for commercial-banking services, the merger between PNB and Girard would create a bank with over a 30 percent share of the relevant market and increase market concentration by more than 33 percent. Based on these numbers, the proposed merger would clearly establish a firm with an undue share of the relevant market and significantly increase market concentration. As a result, the merger is presumptively unlawful, unless PNB and Girard can produce evidence that the merger will not result in the feared anticompetitive effects. PNB and Girard have failed to do so, and PNB's argument that the merger will create pro-competitive effects in the national market for large loans is not persuasive. If it were possible for a merger's anticompetitive effects in the relevant market to be excused by pro-competitive effects in another market, then § 7 would have very little functional effect. "the Court explained that "area of effective competition in the known line of commerce must be charted by careful selection of the market area in which the seller operates, and to which the purchaser can practicably turn for supplies."

Nat'l soc'y of Prof. Engnrs. v. U.S.

the Society prohibited consulting engineers from sharing price information with potential customers prior to being selected for a specific position, effectively prohibiting competitive bidding in the market for engineering services. A defendant may not defend an otherwise-unreasonable trade restraint by claiming that competition itself is unreasonable in the relevant market. It is well established that antitrust law is only concerned with unreasonable restraints on trade. Must weigh/consider competitive factors, not other factors such as public safety, etc. arguing in favor of those factors over competition is the same as arguing that competition is unreasonable in this market, and antitrust law doesn't allow this conclusion.

Matsushita Electric Industrial Co. v. Zenith Radio Corp.

to survive a motion for summary judgment, a plaintiff seeking damages for a violation of § 1 of the Sherman Act must present evidence that tends to exclude the possibility that the alleged conspirators acted independently. Put differently, the plaintiff must show that an inference of conspiracy is reasonable in light of the competing inferences of independent action or collusive action that is not harmful. A court should not permit an inference of conspiracy if the inference is implausible.

US v. Microsoft

ying arrangements involving software-platform products should be judged under the rule-of-reason analysis of antitrust law. In a tying arrangement, a seller conditions the sale of one product on the sale or inclusion of another product. If a seller possesses market power in the market for the tying product and only sells the tying product alongside the tied product, a buyer desiring the tying product is forced to also purchase the tied product. Market power exists if a seller can force a buyer to behave in a way that the buyer would not behave in a competitive market. Generally, if a seller is determined to have market power in the market for the tying product, the tying arrangement is considered to be a per se violation of antitrust. However, not all tying arrangements are anticompetitive, as the bundling of products can offset restraint of trade by creating efficiencies for sellers and reducing transaction costs for consumers. Accordingly, a defendant accused of an unlawful tying arrangement may present evidence of efficiencies or other business justifications in order to refute the alleged anticompetitive effects. However, the district court failed to consider the special circumstances surrounding technologically integrated products.