Antitrust - Morgan - Fall 2003_3

8/20/2019 Antitrust - Morgan - Fall 2003_3

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Antitrust Outline

Morgan

Fall 2003

The Historical Periods:

Overview:

1. The First Period (1809 – 1911)2. The Second Period – Rule of Reason (1915-199). The Third Period – Per Se Rule (19!0-19")!. The Fourth or #urrent Period (19"! – Present)

T$%R% &R% '*S +F SS,%S R&S%* &TTR,ST1. Horizontal arrangeents in !estraint o" Trade

a. M#t division$ %rice "i&ing$ grou% 'o(cott$ ergers$ ono%olizaiton

2. )ertical arrangeents

a. These are arrangeent s '*w "irs at di""erent levels in %roduction*distri'ution

'. +nclude: vertical integration ,ono%ol(*ergers-$ others

3. urisdiction *%rocedural issues


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The First Period ,1/0 111-

1. The ase o" Mono%olies ,103-

a. #oon-/a antecedent of Sheran &ct . +utlines reasons the ulic should e concerned aout onoolies

i. 3rant of onool4 to *arc4 ees others fro ein6 elo4ed ain6 cards (also

reducin6 outut)ii. 7ill ae rices 6o u

iii. ualit4 of 6oods o coetition ill 6o donc. here not should there e onoolies: ut 7$+ a4 6rant the (after this case: ;ueen

rarel4 could: reseraer aed and not aid@ >aer sa4s Acoon la on?t enforce a6reeent in restraint of

tradeBc. #ourt This is a


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. 9.5. v. Add(ston Pi%e ,1//- ,95 t. A%%. th ir-

a. &out #oination or #onsirac4 Jaret *i


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/. a'or 9nions and Antitrust aw

a. nitiall4 6rou o4cott las alied to union laor o4cotts: no ha


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12. 5tandard Oil ,7- v. 9.5. ,111- ,5..-

a. &out JonooliMation . #ase Rocefeller ou6ht u 90C of


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11>: la(ton Act and FT Acts are Ado%ted: The 67B OF 15T PHA56$

transitor( %hase

The #la4ton &cte. Section 2 – Forids rice discriination (to ha


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The 5econd Period !ule o" !eason ,11;@13->e6ins adotion of #la4ton act and ends ith intro of er se aroach

1. hicago ?d o" Trade v. 95 ,11/-,5..-

a. &out Q1 Sheran &ct: rice fi=in6

. #ase #all rule sets rice of 6rain Ato arri


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3. Aerican olun v. 95 ,121- ,5..-

a. &out Trade association e=chan6e inforation: actin6 lie AcoinationB: Q1 ricefi=in6

. #ase K5 eers roducin6 0C nation?s ood: e=chan6ed info on roduction:in


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>. 95 v. Ieneral 6lectrics ,12- ,5..-

a. &out ntellectual Proert4&ntitrust /a . #ase 3% has atent on uls@ 3o< 2 char6es a6ainst 3% 1) S4ste of distriution

adoted ded Trade as hat needed to ae 6rain

t coetiti


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The Third Period Per 5e !ule ,1>0@14>-*urin6 this eriod: doctrine rarel4 static e


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2. Fashion Originators v. FT ,1>1-,5..-a. &out $oriMontal Restraints of TradeD3rou >o4cott'. not technicall4 a er-se case: ut inter of Q5 of FT# act here arallel to er se inter of

Sheran &ct: lie er se Q1 rulin6: 1 st case e?


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;. 95 v. To%co Associates

a. &nother case indicatin6 that the er se rule needed to chan6e'. &out /ie Jt *io4cott@ a6reeent e=istin6 eers ho are

otential coetitors: a horiMontal consirac4 to not ecoe coetitors.c. #ase T+P#+ as cooerati


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iii. 3eo6rahic t onl4 considered forei6n iorts ut not all forei6n roduction cthen ould ha


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. 9tah Pie v. ontinental ?a#ing

a. &out Predator4 Pricin6@ #la4ton &ct Q2 (Roinson-Patan &ct): hich rohiits rice discri. n lie roducts

i. This case routinel4 cited in red ricin6 cases: can e looed at asstrai6ht Q2 case (e= sellin6 elo rice to dri


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TL+7I*)6!T+A !6AT+O75H+P5

10. +nternational 5alt v. 95

a. &out T(ing$ Q1 Sheran act and Q #la4ton act'. #ase nt?l Salt roduces salt and had atents on 2 achines use salt@ had t4in6

clause in lease: Jachine 1 can onl4 u4 sae ;ualit4 salt fro others if at loer rice: ut S ha


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12. 7OT6 A565:

a. Ta%a 6lectric ,11-C #ourt loos at C t share not asolute sales to deterinesustantial effect on co %* cases (,nlie nt?l Salt)

'. Ties@Pica(une ,1;3-C

i. A ame 2roduct$ )roblem7 how to tell if 8 )roducts tied or 9 )roduct: ii. n this case sale of ads in e


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1>. 95 v. oews ,12-,5..-a. &out sellin6 Aaca6esB of o


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OTH6! )6!T+A !6AT+O75H+P5 B6A+7I *B6A6!5 $ere: courts are assuin6 after re


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14. hite Motor v. 95 ,13- ,5..-a. &out Territorial Allocation in violation o" 1$ 3 5heran Act$ liitations or

restrictions on 1- the territories in which distri'utors or dealers a( sell and 2- the

%ersons or class o" %ersons to who the( a( sell

'. #ase #ar dealershis had


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1. Price Biscriination: The !o'inson@Patan Act

a. This is Q2 of #la4ton &ct as aended in 19K 4 Roinson-Patan &cti. Sae statute sa in ,tah Pie

'. Q2(a) ille6al to rice discriinate aon6 urchasers of coodities of the sae6rade and ;ualit4 here the effect a4 e to sustantiall4 lessen co or tend tocreate a onool4 or inGure co

c. Q2() urden of reuttin6 a ria facie case is on * 4 shoin6 that his loer rice as ade in 6ood faith to eet the e;uall4 lo rice of a coetitor

d. Q2(f) forids noin6l4 recei


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M6!I6!5 ,discussion %. >14 >1-T+*&L er6ers rearo


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. Test ) 6eo6rahic t area that corresonds to thecoercial realities of the industr4 and is econoicall4si6nificant

$ere e


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1. Reasonale ro that ac;uirin6 fir: ut for this er6er: ould ha


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The Fourth or urrent Period ,14> Present-JJJ956 ?6O current law Q to do Rs 2 and 3 on Final88

A. The Transition ases

1. 95 v. Ieneral B(naics ,14>-,5..-

a. +T t4icall4 thou6ht of as first current eriod case: S4l+,T J%R3%R d. #&S% JS# succeeded 4 3*: JS# did dee-shaft coal inin6: ac;uirin6 ,nited

%lectirc (,%) a stri iner@ the coal aret re6ional 6eo6rahic arets rele


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ii. Per-se rule +T eliinated for e,T interrand co #R%&S%* c a4 encoura6e ne cos to

enter t as distriutors for less-oular ites c less ris4: less coinitiall4 e=clusirunsic can oerate at loer rices

c. *efense >runsic conceded ould e Q" runsic ould harunsic as otentialcoetitor (thou6h Failin6 #oan4 * i6ht or)

d. ourt: These Bs A7T 'ring this case '*c 7O 5TA7B+7I88

i. These cos were inKured$ ?9T not Antitrust inKur(

ii. #oetitor is suosed to inGure 4our ailit4 to e onoolist: this inGur4aroriate in antitrust eanin6

iii. >4 u4in6 out failin6 cos: >runsic #R%&S%* coetition in aretirunsic too o


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?. 1: Horizontal and )ertical ons%iracies

Horizontal Price Fi&ingTrend: 5.. less willing to loo# at restraint and la'el it


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2. ?roadcast Music v. ?5 ,14-,5..-

a. &out Price Fi=in6 . #ase * and &S#&P ha


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iii. This case less satisf4in6 than i6ht ha


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Horizontal Irou% ?o(cott D Mar#et Bivision

73rou >o4cott: #t ore liel4 to use R of R

>or to declare 6rou o4cott er se ille6al is to lu to6ether suerficiall4 siilar 6rou conduct

hen Gustifications and results differ

Rother4 further confirs this

1. 7 holesale 5tation v. Paci"ic 5tationar( ,1/;-,5..-

a. &out 3rou >o4cotts:


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1. Overrules TOPO and 5eal($ and declares Add(ston Pi%e to 'e law o" the land 7O P6! 56 +6IA++TL88

3. a( Paler v. ?!I o" Ieorgia ,10-,5..-

a. &out Jaret *i


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)ertical Arrangeents*!estraints under 1 &nal4sis ore lie aret di-a. A'out: )ertical Price Maintenance

'. #ase Sra4 Rite holesale distriutor of hericides: authoriMed distriutor of Jonsanto@ Jonsantoset ne 6uidelines for distriution: S-R fell short of 6uidelines (sold enou6h ;uantit4: ut noteducatin6 custoers on use of roduct hich is e4 to roer use and custoer satisfactionroduct lie hericides). Terinates S-R as a6ent. S-R sues sa4s terination c the4 sold ore

roduct for loer rice than other retailers: and said the4 ere terinated at re;uest of otherretailers to ee rices u.

c. ourt: This case E Miles*Par#e*olgate crossed with 5(lvania*hite*5chwinn$ the distinction

'*w %rice and non@%rice restraints and unilateral and concerted*ulti@"ir action

1. 9nilateral E olgate E Per 5e 6IA

2. 9nilateral*non@%rice E O

3. oncerted*non %rice E 5(lvania E ! o" !

>. oncerted*%rice E Br. Miles E Per 5e +llegal

ii. This case S


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3. Atlantic !ich"ield v. 95A Petroleu ,A!O-,10-,5..-a. &out fi=in6 a=iu resale rices'. #ase ,S& Petrol custoer of &R#+ that sells its 6as at discount rices@ &R#+ de


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>. oncerted* 7O7@%rice E Ma& %rice aint ,5(lvania- E ! o" ! anal(sis


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Pulling the ons%irac( ases Together

3 a(s to anal(ze cases add in "ro notes

1. alvani:a. 3 inSuiries "or horizontal restraint cases

i. 1) nherentl4 susectI s restraint alost ala4s liel4 to restrict co decreaseoutut and raise riceI

1. + use R of R 2. L%S: 6o to 2

ii. 2) s there a aret creation or efficienc4 Gustification: enhancin6 coI1. +T lausil4 R%H%#T2. Plausile efficienc4 Gustification: 6o to

iii. ) Jae in;uir4 to see if Gustification is


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". ?re(er oncureence in %art*Bissent in %art:

i. JJP!OF: sees ?r(ers dissent as good guidance "or what 5.. will do in "uture cases8

ii. Bisagrees w*5.. a%%roach$ suggests >@%art test:

a. 1. 7hat is the secific Restraint at ssueI (lie in #&&: e


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. 2: Mono%olization$ T(ing and Other 6&clusionar( Practices

MO7OPO+VAT+O71. As%en 5#iing v. As%en Highlands

a. &out JonooliMation (hat a co in doinant osition ust do to not loo too

a66ressi


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2. Matsushita 6lectric v. Venith !adioa. &out JonooliMationredator4 ricin6G standards "or suar( Kudgent'. #ase and other ,S TE anufacturers sa4 Haan TE cos (includin6 J) are consirin6 to char6e

hi6h rices in Haan: sell TEs at loer rices in ,S in effort to dri


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TL+7I

>. e""erson Parish Hos%ital v. H(de ,1/>-,5..-

a. &out T(ing ,Also e&clusive dealingConl( anal(zed in dissent-'. #ase $osital entered into e=clusi


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;. oda# v. +age Technical 5ervices ,12-,5..-

a. &out T(ing'. #ase P indeendent ser


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. 9nited 5tates v. Microso"t ,1/-a. &out T(ing*Mono%ol( ,J7OT "ull@'lown antitrust anal(sis$ a'out consent decree

inter%retation-

'. #ase *+H said JS as t4in6 its roducts to6ether in


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searate aret: here enefits of coination dissuade consuers froseein6 and suliers fro ro


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iv. f onoolist?s roco clai stands unreutted: then Pust deonstrate that antico har of conduct outei6hs

roco enefitsv. Focus of court on %FF%#TS of onoolist?s conduct: not

its T%T

c. #an?t hold a6ainst fir inno


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. so #t. & reands T4in6 case to trial court to e=aine under R of R a. should loo at

i. if JS?s conduct unreasonal4 restrained coii. consider if enefits of t4in6 are outei6hed 4 hars in

tied roduct aretiii. a4 also loo at Arice undlin6B to see if t4in6


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B. Mergers and the Merger Iuidelines Juch of er6ers elo case-la radar c er6ers assessed eforehand

Thou6h soeties 6et lasuits hen 6o< not ant to +' er6ers and cos tr4 to 6et declator4 Gud6ent to 6o for

er6er or a6encies 6et inGunction to sto

+ften: if 6o throu6h coule of info re;uests 4 6o


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a. f elo 1:000: usuall4 need no furtheranal4sis

. f oderatel4 concentrated: 1:000 to1:800: 1) if increase ost-er6er lessthan 100: usuall4 +'@ 2) if ore:usuall4 need ore anal4sis

c. f hi6hl4 concentrated: ao


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6. +nter%la( ?etween !egulation and Antitrust aws

1. ?ac#ground:

a. Trans-Jissouri: one issue that ## re6ulated RR?s: RR?s claied +T to e suGect to antitrustlas c can 6o to ## for reed4

i. S.#. – if ## re6ulated conduct at issue: ## should re6ulate: no antitrust reachii. >,T: ## did estalish rates: ut its riar4 concern onl4 discriination in rates fro

tonton: urchaserurchaser. +T rate le


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3. 5outhern Motor arriers v. 95 ,1/;-

a. &out'. #ase ntrastate carrier rates@ carriers 6ot to6ether to suit 6rou roosals for rates to Pulic

Ser


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Pro" Morgan:

Southern Jotor #arriers and #oluia are Aeas4 e=cetionsB fro antitrust las: a4 6o T++ F&RN

f 4ou are seein6 to e=chan6e datacoordinate acti


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F. +nter%la( ?etween Patent and Antitrust aw

2. ?ac#ground

a. &ntitrustP oth tried in federal circuit and S.#. (e=clusi


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iii. court also reGects nter6rah?s Ale


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I. Antitrust and +nternational Trade

1. Hart"ord Fire +nsurance o. v. ali" $ %. /31@/>2

a. S.#. affired 9th cir contention that international coit4 +T act as restraint on e=tension ofSheran &ct suGect atter Gurisdiction

'. &ssued *?s acti


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ii. PfiMer?s concern den4in6 forei6n P inGured 4 antitrust

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Antitrust - Morgan - Fall 2003_3

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