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- History, Politics, Law, Economics:

  • The common argument over antitrust law is should we be protecting competition or competitors?
  • In America, we protect competition (in theory), but you cannot have competition without competitors

Historical Origins:

  • Schoolmasters' Policy. rejected the trespass claim that the new grammar school decreased their profits. The court said that the claim was harm without legal injury.
    在 "校长政策 "案中,法院驳回了关于新文法学校减少了他们的利润的侵权索赔。法院称,该索赔属于没有法律伤害的伤害。
  • Competition can, and does, cause harm to rivals by lowering their profit margins and market shares. However, to recognize competition as a legal wrong would be disastrous to society.
  • Antitrust is about competition of conflicting desires - knowing that we cannot have it all and have to choose one thing over another makes economics a powerful tool

- Beginning of antitrust law:

  • Mitchell v. Reynolds: (Common Law)
  • One baker buys a business from another, and agreement by seller not to compete with buyer for 5 years; posted a 50lb bond as guarantee. Seller comes back and competes before the 5 years passed' buyer sues on the bond and seller says its unenforceable because it is a contract in restraint of trade. The court thought the contract was reasonable and enforceable. It was not a general restraint of trade, but a specific and localized restraint.
    一个面包师从另一个面包师手中买下了一家面包店,卖方同意在 5 年内不与买方竞争;并交纳了 50 磅的保证金作为担保。卖方在 5 年期满前回来与买方竞争,买方就保证金提起诉讼,卖方说这不能执行,因为这是一份限制贸易的合同。法院认为该合同是合理的,可以执行。这不是一种普遍的贸易限制,而是一种具体的、局部的限制。
  • This was a limited monopoly for a limited time, and if it was not allowed, then the buyer would just pay less or nothing. Court says that permitting enforcement of this arrangement permits transactions to occur that we want to occur. This did not create a monopoly, only a right to not compete with a specific seller.

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Three injuries of monopolies: (Darrey v. Allien/The Case of Monopolies)
  • (1) raise prices
  • (2) quality of product goes down
  • (3) prevents others from entering the market/making a living/takes options away from others

Horizontal v. Vertical restraints:

  • Vertical restraint = company controls sales force
  • Horizontal restraint = control between competitors
  • Competition is good it manages price and quality
  • Increase competition to make the pie bigger - we want the pie bigger, not the slices of the market or "pie" to be bigger (that would be wealth distribution)
    增加竞争,做大蛋糕--我们希望蛋糕做大,而不是市场或 "蛋糕 "的切片做大(那将是财富分配)。

Ancillary v. Naked Restraint:

  • Ancillary is a contract with a restraint that is for the public good
  • Naked is a contract that restrains without any legal purpose (which is § of the Sherman Act)

Doctrine of Ancillary Restraints:

  • A restraint must be reasonably related to a beneficial arrangement and is reasonably necessary for its purpose (
  • There must be some evidence showing it is an ancillary restraint on trade
  • This backs away from Trans-Missouri and towards a rule of reasoni.e., only unreasonable restraints are unlawful
  • At common law, there is no rule of reason on restraint of trade
  • Naked restraints are illegal per se (only purpose is to exclude competitors) but ancillary restraints may be legal (provisions that ensure the contract can be enjoyed without restraining trade)
  • Addyson Pipe & Steel Co.
  • Pipe companies got together and decided that each would sell to a certain city. They entered into a horizontal agreement of two years' duration under which they divided territories. Firms argued that they only controlled of the entire market and therefore could not have market power
    管道公司聚集在一起,决定各自向某个城市销售。他们签订了一份为期两年的横向协议,据此划分了区域。各公司辩称,他们只控制了整个市场的 ,因此不可能拥有市场支配力。
  • The court finds violation because even though it applied only to the buyers in their territory, and was a partial restraint on prices, the court did not think that a common law there is any question of reasonableness open to the courts with reference to such contract

Governing law:

- Sherman Antitrust Act:

  • § 1- "every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade of commerce among the several states, or with foreign nations, is declared to be illegal"
    § 第 1 节--"凡是限制各州之间或与外国之间的商业贸易的合同、信托或其他形式的结合或共谋,均被宣布为非法"。
  • Cartels, agreements for fixed prices, etc.
  • Interdependent pricing is legal "oligopoly" charging higher prices without agreement is likely ok - you can control the market without violating antitrust laws
    相互依赖的定价是合法的 "寡头垄断" 在未达成协议的情况下提高价格很可能是可以的 - 您可以在不违反反垄断法的情况下控制市场

- ALL restraints under this are either governed by reasonableness or per se violation

  • § 2 - "every person who shall monopolize, or attempt to monopolize, or conspire with any other person or persons to monopolize any part of the trade or commerce among the several states, or with foreign nations
    § 第 2 节--"凡垄断或企图垄断,或与任何其他人或多人合谋垄断各州之间或与外国之间的任何部分贸易或商业者

- Federal Trade Commission Act

  • This was first passed to create examples of what is reasonable/fair business conduct, but it never happened because they realized that it is impossible to do so because it really depends on the context of the restraint.
  • §5(a)(1) - unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are declared unlawful
    §第 5(a)(1)节--宣布商业中或影响商业的不公平竞争方法,以及商业中或影响商业的不公平或欺骗行为或做法为非法行为
  • § b) - commission can issue complaint with charges, as well as cease and desist order
  • Clayton Act - anyone harmed under antitrust law can sue and get damages
  • - exclusive dealing and trying
  • § - private rights of action

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  • § - mergers and acquisitions

- Di minimis exception

  • Even where there is an effect on interstate commerce, the court shave held that there is no jurisdiction under the Sherman Act if the effect is di minimis or insubstantial
  • Some courts do not consider this requirement, but some do

Economics of Competition:

- Efficiency

  • Allocative efficiency - best allocation of resources - producing the best set of goods
  • Productive efficiency - producing with lowest cost inputs - cheaply as possible
  • Innovative efficiency - optimizing rate that improved products/processes are discovered and diffused into the economy
  • Innovation lowers production cost/monopoly price, increases consumer surplus/deadweight
  • welfare efficiency (consumer surplus + deadweight)

- Monopoly issues:

  • Consumer surplus - value of a product to consumers that is above what is paid for it
    - Deadweight - value of goods monopolist doesn't produce that customers want
    - Poor allocative efficiency
    - If there is perfect competition, then market prevents a company from raising price because they do not want to be undercut and lose part of their market share
    - 如果存在完全竞争,那么市场就会阻止公司提高价格,因为他们不想被压价而失去部分市场份额。

    - Price taker firm competition
    - Fixed cost do not vary with demand
    - Variable cost = costs that change based on how much you sell²

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  • When you first go into business, your efficient and costs go down, but the more you sell, the less efficient business is, so costs begin to rise
  • Marginal cost cost of reducing your next unit
  • A firm will sell where the price marginal cost
  • You can control marginal cost by production method. So, you do not want you MC to be above market price
  • Assumption that all firms "perfect price taker" they will always sell at market price
  • As supply goes up, demand goes down. Price goes up, you want to sell more but when price goes down, you do not want to sell more because you are not making a profit.
  • Higher price = people buy fewer
  • Consumer surplus = the people who would pay more than market rate. They are getting a deal for paying market rate because the product is so important to them, they would be willing to pay more than it is selling for
    消费者剩余 = 愿意支付高于市场价格的人。因为产品对他们非常重要,所以他们愿意支付比市场价更高的价格。
  • However, to get another customer, you have to reduce the price for everyone
  • If you sell based on how much you know someone can afford, you are creating producer surplus by price discrimination
  • Monopoly = prices are higher, quantity is lower.


  • Section 1 of the Sherman Act prohibits agreements that unreasonably restrain trade
  • Elements of § violation:

- Agreement or concerted action

  • Unilateral action does not violate section 1 of Sherman act
    - Todd v. Exxon, Three Tenors, Texaco
    - This can be tricky without a smoking gun evidence of an agreement - Thus, the court will often look to "plus factors" to get over the Twombly requirement.
    - 因此,法院通常会考虑 "附加因素",以满足特翁布利案的要求。

    - Pattern of parallel pricing, documentary and testimonial evidence of price matching among competitors, reciprocal exchanges of price information, etc.
    - 平行定价模式、竞争者之间价格匹配的文件和证词证据、价格信息的相互交流等。

- That unreasonably retrains trade

  • To show that the restraint is unreasonable, the court applies either rule of reason or per se test (sometimes quick look, but rare)
  • Rule of reason
  • Every contract between firms for the sale of goods has some restraint on trade, but there are some economic benefits to some restrains on trade
  • Thus, the court uses rule of reason to look at the structure of the industry and consumer behavior to determine reasonableness of the particular restraint
  • Does not require a broad inquiry that balances anticompetitive effects of agreement against social or political benefits - rather, the court asks, is the challenged agreement on that promotes competition or suppresses competition?
  • Factors considered: structure of the industry, firm's operation in the industry (power and position), history and duration of restraint, the reasons for its adoption, and effects on the competitive market
  • Trans-Missouri, Standard Oil, Engineers, Chicago Board of Trade
  • Per se violation
  • Certain business relationships have no justifiable purpose other than restraining trade - it is based on the likely purpose or effect of an agreement in raising prices
  • If the purpose or effect is unclear, or conduct enhances the market competition or increases
    efficient, a rule of reason or quick look analysis would be done
  • Quick look
  • This is applied where the per se condemnation is inappropriate, yet no detailed industry analysis is necessary to demonstrate the anticompetitive nature of an inherently suspect restraint. However, a quick look is inappropriate if the has a plausible procompetitive justification for their concerted action (Brown University, Dentists)
    这适用于本身谴责不适当的情况,但无需进行详细的行业分析来证明本质上可疑的限制行为的反竞争性质。但是,如果 的一致行动有合理的有利于竞争的理由,则不宜一概而论(布朗大学,牙医)。


  • critical* a court must initially determine whether the conduct or effect falls within per se category. If not, and the purpose or effect is unclear, or the can demonstrate that the agreement has a procompetitive justification, then rule of reason analysis is applied, balancing the anticompetitive harms and the procompetitive reason/benefits
    关键* 法院必须首先确定行为或效果是否属于本身的范畴。如果不属于,而且目的或效果不明确,或者 可以证明协议具有有利于竞争的理由,则应采用合理性规则分析,平衡反竞争损害和有利于竞争的理由/益处。
  • That has an effect on interstate commerce

- Horizontal restraints

  • Price fixing
  • Sekoni Vacuum
  • Trenton Potteries
  • Chicago Board of Trade
  • v. CBS
  • Addyson Pipe
  • Superior Trial Lawyers
  • Appalachian Coal
  • Joint Venture price fixing
  • Three Tenors
  • Texaco v. Dagher
  • Minimum Prices
  • Goldfarb
  • Elimination of competitive bidding
  • Engineers
  • Catalano
  • Division of market
  • Addyson Pipe
  • Boycotts
  • Klors v. Broadway Hale Stores
  • General Motors
  • FTC v. Superior Trial Lawyers
  • Fashion Originators Guild
  • No duty to deal
  • Pacific Bell
  • Bundled Discount
  • Cascade Health Solutions
  • Cartel
  • Visa MasterCard
  • Crisis Cartel
  • Appalachian Coal
  • Sharing Price
  • Toddv. Exxon
  • US v. Brown
  • Settlements
  • FTC v. Actavis

- Price fixing among competitors

  • Per se violation
  • Any combination or agreement that has the purpose or effect of raising, depressing, fixing, pegging, or stabilizing the price of a commodity in interstate or foreign commerce is per se illegal
  • Price fixing, market allocations, group boycotts
  • No justification permitted
  • Justifications to the effect that the horizontal price-fixing agreement was reasonable or was entered into to end "ruinous competition" are banned. The ONLY exception is a credible argument that a particular agreement makes a
    禁止以横向定价协议是合理的或签订该协议是为了结束 "破坏性竞争 "为由进行辩解。唯一的例外是可信的论据,即某一协议使 "破坏性竞争 "成为可能。

    market function more competitively or creates integrative efficiencies, thus requiring rule of reason
  • Exception for regulated industries
  • An exception to price-fixing prohibition is government regulated industries
  • Sufficient proof
  • must show either an unlawful purpose or an anticompetitive effect. It is unnecessary to establish market power to set or influence prices
  • What constitutes price fixing?
  • An expansive interpretation of price fixing includes fixing minimum or maximum prices, using common list prices, production or purchase price limits, and the elimination of competitive bidding or short-term credit

- Division of markets

  • Any direct or indirect agreement among competitors to divide the market for a particular product, territory, or customers is illegal per se, because it gives each participant an effective monopoly in his share of the market. No justifications or defenses - expect in "areas of primary responsibility"
    竞争者之间任何直接或间接瓜分特定产品、地区或客户市场的协议本身都是非法的,因为它使每个参与者都有效地垄断了自己的市场份额。没有理由或辩护--在 "主要责任领域 "除外

- Group boycotts/refusal to deal:

  • A group of competitors may not agree to cease dealing with a person or firm outside of the group, to deal only on certain terms, or to coerce suppliers or customers not to deal with the boycotted competitor. Such agreements result in a combination in restraint of trade.
  • Per se v. rule of reason
  • Early cases appeared to establish illegal per se. however, later cases show rule of reason and quick look. The most recent Supreme Court holding on the subject reaffirmed the illegal per se rule.
    然而,后来的案例显示了理性规则和快速审视。最高法院最近对这一问题的裁决重申了 "本身非法 "规则。
  • This depends on the market/characterization
  • Self-regulation by industries:
  • It is unlawful for trade associations or competitors to use boycotts or unreasonable restraints to enforce standards of conduct within the industry. However, courts are more likely to uphold association rules in industries subject to extensive government regulation (e.g., the stock exchange)

- Political Boycotts

  • Boycotts motivated by political purposes are usually beyond the jurisdiction of the Sherman Act and may also be protected speech under the NoerrPennington doctrine.
  • Why is refusal to deal so bad?
  • Directly anticompetitive
  • Foreclosing distribution

- Joint Ventures

  • A joint venture can be illegal per se if the reason for the joint venture is illegal per se. however, if the purpose and effect produce integrative efficiencies, the venture is under rule of reason. And rule of reason requires balancing procompetitive vs. anticompetitive
  • Also, deference is given when government approval of joint venture
  • industry structure is important

- Sharing information

  • Factors that indicate unlawful activity (1) exchange of information about current or future prices, (2) identification of parties, as well as price, in sales transactions, (3) a highly concentrated for oligopolistic market
    表明存在非法活动的因素:(1) 交换有关当前或未来价格的信息;(2) 在销售交易中确定当事方以及价格;(3) 高度集中的寡头垄断市场
  • Pay attention to what information is being shared
  • Information other than price is more lenient unless it is aimed at lessening competition, policing a cartel, facilitating interdependent pricing
  • Necessary to determine whether exchange of information helps to perfect the market or creates efficiencies or whether it is monopolistic and anticompetitive
  • Exchange of prices
  • Very suspect and likely a violation. factors that indicate unlawfulness include exchange of information concerning current or future prices and identification of the parties involved or in the context of highly concentrated or oligopolistic market structure
  • Exchange of information other than price
  • Exchange of information other than price will only be condemned if it is aimed at lessening competition, policing a cartel or facilitating interdependent pricing
  • What constitutes an agreement, combination, or conspiracy?
  • Conscious parallelism
  • Conscious parallelism is a process not unlawful in itself, by which firms in a concentrated market effectively have a shared market power and economic interests and set their prices at a profit-maximizing, supra-competitive level.
  • Conscious parallelism that has independent business justification is not sufficient to conclusively establish an agreement
  • Interdependent conscious parallelism
  • Circumstantial evidence of agreement
  • If an agreement cannot be proved by direct evidence, circumstantial evidence may show an agreement. Consciously parallel interdependent action may be sufficient evidence of an agreement in certain situations. Agreement may be inferred when parties undertake parallel actions that are truly interdependent in that benefits accrue to the parties only if all participate and there is no other rational explanation for the parties taking such actions independently
  • In addition to conscious parallelism, a plaintiff must show "plus factors"
  • Communications among , economic motive, radical departure from previous business practices, etc.

- Vertical restraints

  • Vertical restraints refer to agreements and conduct among participants at various levels of production and distribution (e.g., manufacturers and wholesalers or wholesalers and retailers). (Horizontal restraints involve relationships between firms on the same level.)
  • Vertical restraints are analyzed under XII sections 1 and possibly 2 (monopolization) of the Sherman Act, and section 3 of the Clayton Act. 2.
    纵向限制是根据《谢尔曼法》第 XII 条第 1 款和可能的第 2 款(垄断)以及《克莱顿法》第 3 款进行分析的。2.
  • Rule of Reason or Per Se Analysis?
  • No single rule prevails for the range of possible vertical restraints. Some are analyzed on the basis of per se illegality, while others are subjected to the rule of reason scrutiny.
  • Vertical Price Fixing
  • Dr. Miles
  • Colgate Doctrine
  • Monsantos

- Resale Price Maintenance by Sellers

- Minimum Resale Price Management ("RPM")

  • Although agreements to set a minimum resale price used to be per se illegal, they are now evaluated under the rule of reason (Leegin)
  • Note: if there is an agreement to fix price (not unilateral activity, etc.) then it is per se illegal still**
  • These are agreements between manufacturers and retailers
  • Resale pricing fixing should be subject to greater scrutiny if competing manufactures adopt the practice
  • Must consider: source of restraint, purpose, and market power to determine if the manufacturers are abusing resale price maintenance
  • Justification for minim resale price:
  • Stimulates inter-brand competition
  • Encourages retailers to invest in intangible services or promotional officers that aid the manufacturers against rivals
  • Gives new customers more options so that they can choose among low-price, low-service brands & high-price and high-service brands
  • Without vertical restraints Interbrand competition might be underprovided
  • Discounting retailers can free ride on retailers who furnish services and then capture some of the increased demand those services generate
  • Prevents the discounter from undercutting the service provider
  • This also facilitates new brand entry
  • Negative impact is that it may facilitate monopoly profits or cartel
  • A group of retailers could collude to fix prices to consumers and then compel a manufacturer to aid in the unlawful arrangement with resale price maintenance
  • A horizontal cartel among manufacturers or competing retailers that decreases output or reduces competition is per se illegal **
  • Vertical agreements that facilitate such agreement would be illegal under rule of reason

- Maximum resale price management

  • Used to be per se illegal, but not they are under rule of reason
  • Exceptions to rule against resale price management
  • Liability may be avoided by legitimate consignment arrangement. Unilateral refusals to deal are more complex to evaluate. Suggested retail prices are allowed as long as they are merely suggested and result from truly unilateral action, but if customers are actively urged to adhere to suggested prices or similar schemes, a court may find de factor agreement to set prices

- Exclusive distributorship and territorial restrictions:

  • Exclusive distributors
  • Generally, a manufacturer may appoint a distributor or dealer as the sole or exclusive distributor in a given area. Such practices are evaluated under the rule of reason. However, a manufacturer's leeway in this area may be circumscribed if there is very little interbrand competition (no competitors) and therefore intrabrand competition is thought to be more important.
  • Customer and Territorial Restrictions
  • While it is generally lawful for a seller to choose to whom she will sell goods, it may not be lawful for her to restrict how the buyer can resell those goods. Although previously analyzed under a per se rule of illegality, all nonprice vertical market restrictions, such as a manufacturer's division of customers or territories among various distributors, are now subject to a rule of reason analysis. Rule of reason analysis is applied because the admitted intrabrand restrictions may produce interbrand competitive benefits. Of course, such restrictions may still be found unreasonable in particular circumstances.


  • Arrangements between buyers and sellers that have the effect of excluding outsiders, closing so much of the market off to competitors that they cannot compete effectively
  • Tying arrangements, exclusive dealing, requirement contracts, reciprocity agreements
  • Analysis is the same as Exclusionary Monopolization that it is in Merger under Clayton Act
  • Tying Arrangements:
  • Under a "tying" arrangement, the seller refuses to sell the desired (or "tying") product unless the customer also agrees to buy another (the "tied") product XIII from the seller. The buyer is thus coerced, and the suppliers of the tied product are foreclosed.
    在 "搭售 "安排下,卖方拒绝出售所需的(或 "搭售")产品,除非客户同时同意从卖方购买另一种("搭售")产品XIII。这样,买方受到了胁迫,被搭售产品的供应商也被排除在外。
  • Today, most tying arrangements are viewed under the Clayton Act, because it is a lower burden. See the end of outline for the analysis under the Clayton Act - which primarily views the agreements under a rule of reason approach
  • "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" (Eastman Kodak v. Image Tech Services, Inc., discussing section 1 violation of Sherman Act)
    "当卖方在被搭售产品的市场中具有相当大的经济实力,且市场的很大一部分受到该安排的影响时,搭售安排即为非法"(伊士曼柯达公司诉 Image Tech Services, Inc.案,讨论违反《谢尔曼法》第 1 条的情况)
  • Statutory prohibitions
  • Clayton Act section 3
  • Section 3 of the Clayton Act provides that it is unlawful for any person to lease or sell commodities or fix a price for a commodity "on the condition [or] agreement that the lessee or purchaser thereof shall not use or deal in the commodities of a competitor of the lessor or seller, where the effect may be to substantially lessen competition or tend to create a monopoly in any line of commerce."
    克莱顿法》第 3 条规定,任何人出租或出售商品或确定商品价格,"条件[或]协议 ,即承租人或购买人不得使用或交易出租人或出售人的竞争 ,其效果可能是大大削弱竞争或倾向于在任何商业领域形成垄断",均属违法行为。
  • Commodities vs. other forms of property
  • Section 3 only applies to goods or commodities, not services, intangibles or real property
  • Condition or agreement
  • Formalized arrangement is not required. Any leverage the seller has with the customer to foreclose the customer from dealing with seller's competitors will suffice
  • Coercion required
  • If the customer voluntarily buys both products from the same source, and no element of coercion is present, the purchases cannot amount to a tying arrangement
  • Sherman Act section 1
  • Sherman act section 1 covers arrangements involving services, intangibles or real property not covered by the Clayton Act
  • Section 3 is more restrictive than section 1, but the standards are similar for both
  • FTC section 5
  • Section 5 covers tie-ins that would be illegal under either Clayton or Sherman Acts


  • For an illegal tie:
  • (i) there must be separate tied and tying products
  • Courts do not focus on the functional relation between them, but rather the character of the demand for the two items (Jefferson Parish)
  • There must be sufficient demand for both of the products (Eastman Kodak)
4 - United States Steel Corp. v. Fortner Enterprises (I), 394 U.S. 495 (1969), the Court rejected defendant's argument that its sale of prefabricated homes and loans for purchase of the homes and real estate development were a single product. While such an argument probably makes sense for most purchases where credit is extended by the seller, here the Court found that the credit could reasonably be viewed as a separate (and "tying") product because its terms were favorable and the amount was for more than the purchase price of the homes (the tied product), since real estate development and acquisition costs were also advanced.
4 - United States Steel Corp. v. Fortner Enterprises (I),394 U.S. 495 (1969),法院驳回了被告的论点,即其预制房屋的销售和用于购买房屋和房地产开发的贷款是单一产品。虽然这种论点在大多数由卖方提供信贷的购买行为中可能是合理的,但在本案中,法院认为信贷可以被合理地视为一种单独的(和 "搭售 "的)产品,因为其条款是优惠的,而且金额超过了房屋的购买价格(搭售产品),因为房地产开发和购置成本也是预付的。
  • Autos and auto sound systems have been held to be separate products. [Town Sound & Custom Tops, Inc. v. Chrysler Motors Corp.,supra]
  • copier replacement parts and copier services can be separate products if evidence establishes that the two are, or have been, sold separately (Eastman Kodak)
  • **in the context of technology, it is difficult to determine whether there are separate products. If the integration of two formerly separate products creates a more efficient new product, the integration may not constitute a violation/tying (Microsoft)
  • (ii) the sale must be conditional on the arrangement or due to coercion or force
  • Establish that the defendant conditioned the sale of the tying product on the buyer's purchase of the tied product
  • (iii) the seller must have sufficient economic power in the tying product to appreciably restrain competition in the tied product; and
    (iii) 卖方必须在搭售产品中拥有足够的经济实力,以明显限制被搭售产品的竞争;以及
  • Courts focus on the power of the defendant to force the consumer to make choices that they would not make in the competitive market
  • The test stresses the ability of defendants to influence decision making in the market of the tied product (Jefferson Parish)
  • (iv) the arrangement must affect a more than insubstantial dollar amount of commerce in the tied product market.
  • There must be sufficient market power over the tying product to have substantial effect on the tie product

- Tying Called Illegal Per Se (unless software bundling)

  • a tying arrangement that does not violate the per se rule can still violate the rule of reason
  • Although limited exceptions are recognized the usual rule is that tying arrangements are per se illegal when the prerequisites of separate products, coercion or force, market power, and more than de minimis amount of commerce are established under either Clayton or Sherman Act (Jefferson Parish Hospital)
  • To prove a violation, plaintiff must show that the above requirements are met, i.e., separate tying and tied products, market power, etc. But note: "Illegal per se" as used here differs from the rule applied to horizontal price fixing agreements. In tying cases, an illegal per se analysis requires a detailed inquiry into market definitions and the
    要证明存在违法行为,原告必须证明符合上述要求,即单独的搭售和被搭售产品、市场支配力等。但要注意的是:这里使用的 "本身非法 "不同于适用于横向价格垄断协议的规则。在搭售案件中,对 "本身非法 "的分析需要详细调查市场定义和市场支配力。

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existence of market power, a procedure not used in other "per se" cases.
  • Exceptions:
  • Tying arrangements involving software platform products are judged under rule of reason (US v. Microsoft)
  • Analysis for this is:
  • must show that the is actually tying together the sale of 2 products and not just selling a single product
  • must then show some anticompetitive effect (since it is not per se)
  • Then must show pro-competitive evidence for the tying arrangement, such as efficiencies or other pro-competitive effects
  • Any tying arrangement that does not violate the per se rule can still violate the rule of reason test
Standards of proof
  • In determining whether products are separate, courts consider the character of demand for the items, i.e., there must be separate demand for the individual products. The trend in evaluating market power is examination of the defendants' power to force consumers to make choices they would not make in a competitive market.

○ Defenses

  • Defendant may argue that a tie is necessary because defendant is starting a new business with a highly uncertain future, the tie is necessary for quality control protection of goodwill, software products or innovation. Courts have refused to apply the per se rule to prevent the chilling of efficient innovation; instead, tying arrangements are evaluated under the rule of reason.
    被告可能会辩称,搭售是必要的,因为被告正在开办一家前途极不确定的新企业,搭售对于商誉、软件产品或创新的质量控制保护是必要的。法院拒绝适用 "本身 "规则,以防止扼杀高效创新;相反,搭售安排根据合理规则进行评估。

- Exclusive Dealing - requirement contracts

  • The requisite adverse effect on competition is presumed when a seller's exclusivity dealing contracts foreclose a substantial share of the market (Standard Oi)
  • Must also inquire into the size of the market share that is foreclosed by the contract

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  • Unlike tying, requirement contracts may be advantageous to buyers and sellers (reduces selling costs, secured source of supply at fixed cost)
  • Exclusive dealing contracts may allow new competitors into the market
  • The competitive impact is determined by considering their duration, market portion of seller and buyer, etc.
  • Exclusive dealing agreements or arrangements will survive scrutiny, provided they do not involve a substantial dollar volume of the market (quantitative substantiality test) or they do not foreclose a substantial share of the market from other competitors.
  • Rule of Reason
  • Under either section 1 of the Sherman Act or section 3 of the Clayton Act, exclusive dealing arrangements are subject to a rule of reason analysis.
    根据《谢尔曼法》第 1 条或《克莱顿法》第 3 条的规定,排他性交易安排须接受合理性规则分析。
  • Note that de facto exclusive dealing may be found even where there is no express contract for exclusive dealing.
  • The factors considered under rule of reason are
  • Duration of the arrangement
  • Whether the arrangement is terminable on short notice
  • % of market foreclosed
  • Alternative sources or distribution channels
  • Anticompetitive effects
  • Presence of a legit business justification of the arrangement
- The Sherman Act extends beyond common law antitrust (Trans-Missouri)
- For a violation of § of the Sherman Act there must be an agreement
- We look for contracts that restrict someone's freedom and forces them to lower output or raise price. Contracts are forbidden if they tend to create monopoly
- 我们要寻找限制他人自由、迫使其降低产量或提高价格的合同。如果合同有造成垄断的趋势,则应禁止签订。

- In Trans-Missouri, the Court said that a cartel centered around an agreement between multiple companies to restrain trade is illegal
- 在 Trans-Missouri 案中,法院指出,以多家公司达成的限制贸易协议为核心的卡特尔是非法的

- Three tests for Sherman Act § 1 violation: - Pe se illegal
- Price fixing
- "a combination formed with the intent and effect of raising, depressing, fixing, or stabilizing price of an interstate commodity is per se illegal" (Sekondi Vacuum)
- "以抬高、压低、固定或稳定州际商品价格为目的和效果而形成的组合本身就是非法的"(Sekondi Vacuum)。

- no matter how beneficial it is to society; it is illegal if there is an agreement with intent to effect prices
- Horizontal market division
- Market division between competitors
- Cartels
- Naked restraint boycott
- To fight something that is per se illegal, you have to attempt to argue that it is not whatever the court is saying that makes it per se illegal
- 要与本身就违法的事情作斗争,就必须试图辩称,法院所说的并不是使其本身违法的原因。

- Quick look
- Modified rule of reason
- Boycotts
- Rule of reason


  • Price Fixing
    - Chicago Board of Trade: (limited price-fixing)
    - Chicago Board of Trade freezes trade after the last call at the boarder so no more negotiation on grain price can occur after this call
    - 芝加哥期货交易所在边境最后一次叫价后冻结交易,因此在这次叫价后就不能再就谷物价格进行谈判。

    - The price is frozen at whatever market rate is at when the call is made
    - Purpose: trying to eliminate big agriculture businesses from the market and undercutting the small guys
    - Effect: price fixing, for a short period of time price remains stable after the last call until the next morning

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  • Intent is relevant, but good intent will not save an otherwise illegal agreement
    - Because the purpose/intent was for a valid public purpose, the Court will not use per se illegal analysis
    - This is usually not relevant, but the Court is deferential to some entities when they serve public purpose
    - The price was also not static, they were just evening the price so farmers would not have to sell below market when big corporations came in at the end of the day - price was still set by buyers & sellers
    - 价格也不是一成不变的,他们只是将价格拉平,这样当大公司在一天结束时进场时,农民就不必以低于市场的价格出售--价格仍由买卖双方确定

    - Trenton Potteries: (price fixing)
    - Agreement to fix toilet bowl prices between of the market
    - Court said this is per se illegal
    - The Court refused to consider any intent or reason
    - "a reasonable price today may not be a reasonable price tomorrow"
    - What is this a per se rule?
    - If the effect is depressing the competition or hurting the market prices, then the intent is irrelevant
    - Price is so important to the market that it deserves protection
    - Sekondi Vacuum: (per se illegal price-fixing)
    - This case is at the end of the depression, after Appalachian Coal
Ex: homeless man brings antitrust suit against nonprofit Red Cross, for fixing the price of blood. The court said even though they are a nonprofit, it is still per se illegal
The Court said that this case is different than Appalachian Coal because the reach of the market and the timing

Appalachian v. Sekoni:

Sekoni conduct for sure going to fix price
Appalachian conduct = unsure if it will fix price because they lack market power
Appalachian joining together to deal through one broker for efficiency purposes
Sekoni no seller's co-op, they just picked partners to buy oil to get it off of the market to make quantity go down *both are price-fixing; however, App. is ancillary restraint with effect on price - the purpose is to be more efficient, in hopes increased efficiency will drive down cost
Sekoni 没有卖方合作社,他们只是挑选合作伙伴购买石油,从市场上获得石油,使数量下降 *两者都是操纵价格;但 App.是对价格有影响的辅助限制--目的是提高效率,希望效率的提高能降低成本

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  • Small oil companies violate the state pro ration rule and they do not have storage facilities for it
    - so, after they take it out of the ground, they sell it to other gas companies that they have deal with
    - they are purchasing the excess oil on the market so that the price of oil will go back up because there will no longer be over capacity
    - 他们购买市场上过剩的石油,这样油价就会回升,因为不再会出现产能过剩的情况

    - They are not directly fixing the price, but they are manipulating market to affect price, so this is "price fixing" still
    - Court believes they are intentionally trying to drive prices back up, and anything done with intent to increase price should be per se illegal
    - 法院认为,他们是在故意抬高价格,任何意图抬高价格的行为本身都是非法的。

    - Purpose and power to fix prices do not necessarily violation the Sherman Act
    - Conspiracies under Sherman Act are not dependent on any overt act, other than conspiring a conspiracy to fix prices
    - Even if the company has no way to actually fix prices on the market, they can still violate the Sherman Act
    - Joint venture price fixing:
    - Texaco v. Dagher (Price-fixing agreement of joint venture)
    - Joint venture of Exxon and Shell - both selling the same gasoline at the same price
    - The government approved the joint venture
    - This price fixing is OK because the government approved the joint venture this makes the price-fixing ancillary to the government approved venture
    - 这种操纵价格的行为没有问题,因为政府批准了合资企业,这就使操纵价格行为成为政府批准的合资企业的附属行为。

    - *This is different from Three Tenors because the gas stations are pooling all resources and risk to do the joint venture and there was government approval
    - 这与 "三个 Tenors "不同,因为各加油站将所有资源和风险集中起来进行合资,而且得到了政府的批准。

    - If they sold gas under a new name, joint venture would have lost all consumers and it would not have been as profitable despite being one company
    - 如果他们以新的名称销售天然气,合资企业就会失去所有消费者,而且尽管是一家公司,利润也不会那么高。

    - The point of the joint venture was to bring both companies together but not change the name

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  • Rule: parent corporations & wholly owned subsidiaries cannot conspire in violation of antitrust
  • There must be two independent centers of information/decision making to conspire against antitrust
  • What ? In tax law, if you own you file consolidated return - so, maybe this is enough? Court has never said. Drobak thinks anything over is enough
    什么是 ?在税法中,如果您拥有 ,您就可以合并申报 - 因此,也许这就足够了?法院从未说过。德罗巴克认为只要超过 就足够了。

- Boycott/refusal to deal

Boycott is a concerted decision by competitors to only deal on certain terms. Consumers may refuse to shop/boycott certain stores who align with certain political beliefs. However, political boycotts are not economic and not OK. Boycotts to raise salary are not OK.
  • Fashion Originators Guild: (Boycott)
  • Fashion originators form a "guild" which is a group of designers/factories that ban together to boycott style pirates to prevent them from stealing their original designs
    时尚原创者组成 "公会",即一群设计师/工厂,共同抵制风格盗版者,防止他们盗用自己的原创设计。
  • Basically, if any distributor of any brand in the guild sold style pirate products, the guild would no longer supply to them
  • They also agreed with manufacturers to not sell them any fabric or supplies, and if they did, the guild would boycott them as well
  • There were thousands of designers in the guild, so they could not afford to lose them on either end - manufacture or seller - so style pirates were SOL
  • Consumers benefitted from style pirates because it created competition and kept prices down
  • Court said per se illegal
  • Each firm could do this on their own, but not in agreement together Court does not consider that they are trying to protect their trade secret because (1) per se violation and (2) there are other remedies for this that do not include antitrust violations
    每家公司都可以单独这样做,但不能达成一致 法院不认为他们是在试图保护自己的商业秘密,因为 (1) 本身就是违法行为,(2) 对此还有其他补救措施,不包括违反反垄断法的行为
  • Broadway Hails v. Klors (Boycott)
  • Klors is an appliance store and next door is a larger appliance store, Broadway Hails
  • Broadway hates Klors and gets manufacturers not to sell appliances to them Klors says this is a boycott and sues
  • Broadway tries to argue that this had no effect on consumers, and it only hurt Klors
  • The court said that is not the point, the point is to prevent hurting competition
  • Even though it did not have a huge effect on consumers, it hurt the consumers who shop at Klors
  • It is still a way of eliminating competition, which is per se illegal
  • This case highlights, is it about protecting competition or competitors?
  • In US it is supposed to be competition, but you cannot have competition without competitors
  • Catalano, Inc. v. Target Sales, Inc.: Beer distribution case
  • The distributors ban together against trade coupons
  • They can still compete on price - however, the court focuses on time value of money - it effectively raises price for all bar customers, even though they can still compete on money
  • However, there is no guarantee that the bars will lower their price to compete therefore, the distributors are fixing a component of the price, which is price-fixing
    然而,并不能保证酒吧会降低价格参与竞争 ,因此,分销商是在固定价格的一部分,这就是操纵价格。
  • Price-fixing is not necessarily setting a price it is tinkering with price in any way in process, discount, competition, etc.
  • This includes quantity say changing hours of grocery store
  • Cannot enter into an agreement to change hours, even for the sake of workers, you can do this outside of an agreement, but it is unlikely because the store would lose competition to those who did not do so
  • The Court condemned an agreement among beer wholesalers to eliminate a short-term trade credit that many of them had formerly given to retailers. Under the agreement the wholesalers would sell only if the buyer paid before or at the delivery. The effect of the agreement was to standardize the price

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terms and make a firm's sale prices easier to monitor. The Court treated the agreement as price-fixing and condemned it under per se rule.
法院将该协议视为操纵价格,并根据 "本身规则 "予以谴责。法院将该协议视为操纵价格,并根据本身规则予以谴责。

- Modified per se rule for boycotts:

  • Northwest Wholesale Stationary v. Pacific:
  • The court narrowed the per se treatment of boycotts
  • Per se illegal boycotts must fit within a boycott that involves joint effort by firms to disadvantage competitors by either directly denying, persuading or coercing suppliers/customers to deny relationships the competitors needed
  • Rule of reason boycotts - all other boycotts are analyzed under the rule of reason
  • Northwest Wholesale was not denying a competitor and input or output
  • If they do not have a dominate position or market power, then it does not affect consumers and court is not concerned
  • Consumers have other ways to gain access to the product
  • Investigated whether a buyer's cooperative that expelled a member without providing procedural or administrative recourse had violated antitrust law. Expulsion was not a group boycott, as Pacific made no showing of being denied customers or goods.
  • Associated Press v. US
  • AP set up membership agreement that both prohibited selling news to nonmembers as well as limited new memberships. There were provisions for punishment of those who did not conform to the agreement.
  • The court found market power and refusal to deal

- Outlier professional case: (Boycott)

  • Superior Court of Trial Lawyers: (outlier case for professionals)
  • 1,200 lawyers agree to represent indigent offenders, but only 100 participate because prices were so low
  • The 100 lawyers boycott until they are given a pay raise - the pay raise ends up happening because the court is in a crisis
  • They get sued for antitrust violation
  • They argue that by doing this they actually helped competition because more people will enter the market if the pay is better
  • Court disagrees, and says this is still per se illegal
  • The court said this caused a collapse of the market
  • Despite being professionals, they do not get rule of reason. The court said this is a per se violation
  • While we have pay concerns, we cannot economically support market collapse

- Tying arrangements

  • Eastman Kodak v. Image Tech Services, Inc.:
  • Kodak manufactures and sells copiers and film equipment
  • Kodak sells parts and provides services for its equipment & manufactures some equipment internally, while other parts are ordered from OEM
  • There is NO cross-compatibility of parts between Kodak's equipment and its competitor's equipment
  • ISOs began selling parts for Kodak equipment and offering repairs and maintenance services at a lower price than Kodak
  • In response, Kodak refused to sell replacement parts to buyers who used ISO for servicing Kodak equipment and made it difficult to obtain Kodak equipment
    作为回应,柯达拒绝向使用 ISO 维修柯达设备的买家出售替换零件,并使其难以获得柯达设备
  • As a result, ISOs went out of business
  • ISOs bring suit against Kodak for violation of 1 and 2 of the Sherman Act
  • Under section 1, they claim that Kodak unlawfully tied the sale of parts and services for Kodak equipment
  • A tying arrangement is unlawful when the seller has considerable market power in the market for the tied product, and a large portion of the market if affected by the arrangement
  • Kodak argues that it does not have considerable economic power in the subsidiary market for parts and services, because the primary market for equipment is highly competitive
  • However, the Court said Kodak failed to provide compelling evidence that competition in the primary market for parts and services, and there is evidence that Kodak has used its power to exclude competition from the subsidiary market, given that so many ISOs were forced
    然而,法院称,柯达未能提供令人信服的证据证明零部件和服务的一级市场存在竞争,而且有证据表明柯达利用其权力排除了附属市场的竞争,因为如此之多的 ISO 被强迫进入附属市场。

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out of business after Kodak implemented the tying arrangement and restricted access to parts
  • Under section 2, Kodak has monopolized or attempted to monopolize the subsidiary market
  • Kodak argues that a single brand cannot be considered a market for the purposes of an antitrust violation
  • However, the Court says that there is no legal presumption that a single market, and here, relevant market so specific to Kodak's equipment

- US v. Microsoft Corporation

  • Microsoft began a sales practice of bundling its web-browsing software, internet explorer, with operating system software (Windows)
    微软开始将其网络浏览软件 Internet Explorer 与操作系统软件(Windows)捆绑销售
  • At the time, Microsoft had marker power in the market for operating system software, but faced competition in the market for web-browsing
  • The US brought suit alleging that Microsoft bundling practice was an unlawful tying arrangement
  • Holding
  • If the 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, this is per se illegal
  • However, not all tying arrangements are anticompetitive because of the bundling of products can offset restraint of trade by creating efficiencies for sellers and reducing transaction costs
  • Here, the Court failed to consider the special circumstances surrounding technology integrated products
  • The efficiencies claimed by Microsoft are achieved through the integration of Microsoft's program and allowed increased functionality for third party platforms and convenience for consumers
  • This appears to be a regular practice in the market for software platforms, even among firms that lack market power


  • Quick look/rule of reason analysis:
  • (1) alleging anticompetitive conduct on one side of a simultaneous transaction platform must show that the net effect of the restraint on competition was negative, taking into account both sides of the market
    (1) 指控同时进行的交易平台中一方的反竞争行为,必须证明考虑到市场双方的情况,限制对竞争的净影响是负面的
  • rule of reason begins we have to determine how "obvious" it is to determine if you do (1) at all
  • (2) has initial burden of showing that the challenged restraint has a substantial anticompetitive effect that harms consumers in the relevant market
    (2) 须承担初步责任,证明被质疑的限制措施具有实质性反竞争效果,损害了相关市场的消费者利益
  • This is where you might have to show market power if the effect is not apparent at first
  • If you can show anticompetitive effect, then you do not have to look at market power
  • (3) if carries the burden, the burden shifts to to show a procompetitive rationale for the restraint
  • (4) if makes this showing, then the burden shifts back to to demonstrate that the procompetitive efficiencies could be reasonably achieved through less anticompetitive means
    (4) 如果 能够证明这一点,那么责任就转回到 ,即证明可以通过反竞争程度较低的手段合理地实现有利于竞争的效率。
  • One of the two most important factors in the rule of reason in information exchange is the structure of the industry involved
10 (1) the commission must determine whether it is obvious from the nature of the challenged conduct that it will likely harm consumers
10 (1) 委员会必须确定,从受质疑行为的性质来看,该行为是否明显可能会损害消费者的利益
(2) if so, then the restraint is deemed "inherently suspect" and, unless comes forward with some plausible and legally cognizable competitive justification for the restraint, summarily condemned
(2) 如果是这样,那么这种限制就被认为是 "本质上可疑的",除非 能为这种限制提出一些合理的、法律上可以认可的竞争理由,否则就应立即予以谴责
(3) if the does offer such an explanation, then the commission must address the justification in one of two ways:
A. the commission may explain why it can confidently conclude, without adducing evidence, that the restraint very likely harmed consumers, or
A. 委员会可以解释为什么它可以在不举出证据的情况下自信地得出结论,即限制很可能损害了消费者,或
B. the commission may provide the tribunal with sufficient evidence to show that anticompetitive effects are in fact likely
B. 委员会可向仲裁庭提供足够的证据,以表明反竞争影响实际上是可能的
If either of the two above are shown, the burden shifts to the to show the restraint does not harm consumers or has procompetitive virtues that outweigh its burden upon consumers
如果证明了上述两种情况中的任何一种, ,则证明限制措施没有损害消费者利益或其有利于竞争的优点超过了对消费者造成的负担的责任就转移到了消费者身上。
  • (1) relevant market is defined/market power is determined
  • (2) analyze the structure of the market to determine if it is susceptible to the exercise of market power through tacit coordination
    (2) 分析市场结构,确定其是否容易通过默契协调行使市场支配力
  • Usually, highly concentrated
  • However, just because the market is not highly concentrated does not preclude the possibility of collusive activity
  • Where the market power is exercised by buyers, it is the elasticity of sellers' supply that is at issue
  • Sellers's supply could be elastic, if they have the option of withholding some output from the market in hopes of higher prices in future years
  • If the goods are perishable, short-run supply may be inelastic
  • Labor is extremely perishable and inelastic

- Quick Look:

- Dental Federation:

  • refused to send insurance companies copies of patient x rays
    - Court applies quick look, why?
    - Here, it is a boycott not directed at competitors and is not obviously "anticompetitive"
    - The dentists are withholding something from the market that consumers want Not price-fixing, but restraint
    - The court takes a look at market power
    - It is a small number of dentists, but it is highly concentrated in a small area giving them significant market power in those areas
    - 虽然牙医人数不多,但高度集中在一个小区域,使他们在这些区域拥有巨大的市场支配力

    - If you can show anticompetitive effect, then you do not have to look to market power
    - Usually to see the anticompetitive effect, you have to look at market power
    - If you can see the anticompetitive effect without looking at market power, then there is no need to fully analyze it however, they must have market power to have a detrimental effect on consumers
    - 如果不看市场支配力也能看到反竞争效应,那么就没有必要对其进行全面分析 但是,它们必须拥有市场支配力,才能对消费者产生不利影响。

    - Restraint possible effect market power that will make possible effect a reality
    - The court says withholding information harms the market
    - Dentists defend themselves by arguing that they did this to ensure quality care
    - The court rejects this for the same reason in Engineer's case only considering economic reasons
    - The court also said it pays the insurance companies to make good decision for their clients because the people have the opportunity to switch insurance if they are unhappy/do not think they are getting quality care
    - 法院还表示,保险公司有义务为客户做出正确的决定,因为如果人们不满意/认为他们没有得到优质的医疗服务,他们有机会更换保险。

    - Amex (shows issues with the quick look)
    - If it is not obviously anticompetitive the burden begins with the
    - If it is obviously anticompetitive, it begins with the showing reason for the conduct
    - Reasonable minds can differ on what is "obviously" anticompetitive and what is not
    - How obvious is it? That is what the judge decides when analyzing and determining the per se illegal or rule of reason and where to start
    - 有多明显?这就是法官在分析和确定本身违法或合理规则时的决定因素,以及从何处着手

    - Beginning to the rule of reason:
    - Standard Oif is the "birth" of rule of reason
    - The purpose of Standard Oil agreement was to direct and control the flow of petroleum into the hands of a narrowed group of refiners
    - 标准石油公司协议的目的是引导和控制石油流向少数炼油商手中

    - The court finds that Rockefeller was wrong. His goal was to drive out competition and this was not a normal mode of doing business; he was - Dentists are not doing this to make more money - but maybe? Engineers were obviously doing it to make more money, but here it is unclear. The court still says they will not consider the quality argument
    - 法庭认为洛克菲勒错了。他的目标是赶走竞争者,这不是正常的商业模式;他是--牙医这样做不是为了赚更多的钱--但也许是?工程师这样做显然是为了赚更多的钱,但这里还不清楚。法院仍表示不会考虑质量论点

    - However, there is also competition amongst insurance companies and they dentists are withholding information from the market - therefore, it is different from engineers in that way
    - 然而,保险公司之间也存在竞争,牙医对市场隐瞒信息,因此,在这方面与工程师不同。
12 The court notes that to get rich, you find the narrow part of the market, and then control that piece and by monopolizing that piece, you will control who comes into the market and the price/value of the market Ex: Microsoft over the chip controls all of the profit of Dell because Dell relies on their chip to make computers.
12 法院指出,要想致富,就必须找到市场的狭窄部分,然后控制这部分市场,通过垄断这部分市场,就能控制进入市场的人和市场的价格/价值。例如:微软通过芯片 控制了戴尔的所有利润,因为戴尔依靠他们的芯片制造电脑。

preventing people who wanted to be in the oil business from getting in (preventing competition)
- The intent and purpose Rockefeller had was to be exclusionary rather than offer the best product
- US Stee/ Corp. was the first case to show being big is not bad
- Mere size, alone, is not enough to show antitrust violation
- Steel Corp. was controlling the market price , but they were not doing anything bad doing so - they did not exclude or stiff arm anyone like Standard Oil did
- 钢铁公司控制着市场价格 ,但他们这样做并没有做坏事--他们没有像标准石油公司那样排斥或强硬对待任何人

- Standard Oil was not about size, but about its anticompetitive conduct that led to a violation
- Here, there was no agreement between the parties
- Crisis Cartel
- Appalachian Coal (Crisis Cartel)
- Usually cartels are per se illegal, however the court said this is not governed by the per se rule because desperate times require the cartel
- 通常情况下,卡特尔本身就是非法的,但法院表示,这并不受本 身规则的约束,因为绝望的时代要求卡特尔

- Without the cartel, the coal market will collapse, and the public will lose heat, electricity, etc.
- This case is the first antitrust case after the depression
- 137 coal companies in the Appalachian, they only have a majority of the coal market in their region, not nationwide
- They ban together and decide to sell under one broker, so they are no longer competition against each other like before - thus, they could fix a higher sell price, rather than selling at a loss
- 他们联合起来,决定由一个经纪人负责销售,这样他们就不再像以前那样相互竞争 - 因此,他们可以确定一个较高的销售价格,而不是亏本销售
The court says if this affects the entire market, they will come back to the case
- Coal is at overcapacity
- The restraint is ancillary to a valid purpose of getting together to sell coal 18
- note: this case is price-fixing, but they lack market power for it to be a per se violation**
- This case might be considered a seller's coalition beyond the depression (although it has never been done before, COVID presents opportunities for such argument)
- 这种情况可能被认为是超越萧条的卖方联盟(虽然以前从未有过,但 COVID 为这种论证提供了机会)。

- US v. Visa & Master Card:
- Harm outweighs the benefits and there is market power
- Visa & Master refuse to deal with banks who deal with Amex and Discover
- The agreement is with the banks, not with each other so it is not the same as a joint venture
- Two markets to consider:
- (1) network services amongst merchants
- (2) general purpose cards/customer market
- There is no substitute for credit cards, so the credit card companies have the power to raise prices and keep consumers
- There is competition between Visa and Master, based on dollar volume and cards being used, it is clear that this is the main competition
- Visa 和 Master 之间存在竞争关系,从交易额和用卡量来看,这显然是主要的竞争关系

- Amex can still use their cards independently, without the banks
- However, Amex is the largest issuer of cards, but they have issues getting people to use them because network services have an exclusivity agreement with the banks and Visa/Master
- 然而,运通卡是最大的发卡机构,但由于网络服务与银行和威士卡/万事达卡签订了排他性协议,他们很难让人们使用运通卡。

- How are consumers harmed by this?
- There is no credit innovation because there is less competition based on limited use of Amex and Discover due to the lack of network amongst merchants
- 由于商家之间缺乏网络,运通卡和 Discover 的使用有限,竞争较少,因此没有信贷创新。

- If there was not an agreement between Visa and Mastercard and the Banks, then there would be more innovation and competition in the market - If the banks created Visa/Master and did not share the network with other credit companies, this might be OK - however, here, Visa/Master joined together and made the bank exclude Amex and Discover in their networks
- 如果威士卡和万事达卡与银行之间没有协议,那么市场上就会有更多的创新和竞争--如果银行创建了威士卡/万事达卡,并且不与其他信贷公司共享网络,那么这也许是可以的--但是,在这里,威士卡/万事达卡联合起来,使银行将运通卡和发现卡排除在其网络之外

- Professionals:
- Goldfarb:
- Lawyers placing a minimum fee on services - basically price-fixing, but the Court applies rule of reason because they are professionals
- 律师对服务收取最低费用--基本上是操纵价格,但法院适用理性规则,因为他们是专业人士

- Professional markets require some restraints
- i.e., the bar upholding certain quality of lawyers

- Engineers:

  • The society banned competition between the engineers - the engineers attempt to bring an ethical defense, and how without a restraint on competition, it would cause public safety issues
    社会禁止工程师之间的竞争 - 工程师们试图从道德角度进行辩护,说明如果不限制竞争,会如何引发公共安全问题

    - The Court says no, it must be an economic reason
    - Ethics are irrelevant because engineers are already held to a professional standard
    - Safety and public policy are not a part of economic analysis
    - Sometimes ethics may be required to regulate and promote competition, but here there was no restraint necessary to do so
    - Raising price & quality is always arguable in public policy, but that is for the public to decide what they value more - price . quality
    - 在公共政策中,提高价格和质量总是有争议的,但这要由公众来决定他们更看重什么--价格 . 质量。

    - Professionals usually get the rule of reason because some professions require restraints 19
    - Under this analysis, only economic reasons are considered - you cannot argue that competitiveness is bad
    - Under Sherman, competition is ALWAYS good - so the justification must always be procompetitive
    - Horizontal restraints:
The only case that has not gotten the rule of reason in a professional case was the boycott of DC Court by lawyers

- Three Tenors: (Horizontal restraint of trade)

  • Joint venture between Polygram & Warner for the 3 tenors 3rd performance at the world cup
  • They agree to not discount the first and second performances before the third performance
  • They each owned respectively if the joint venture advertises either then it effects the personal profits of each individual company because they do not jointly own the past performances
    他们分别拥有 如果合资企业为其中任何一家公司做广告,都会影响到每家公司的个人收益,因为他们并不共同拥有过去的业绩。
  • You cannot limit products/prices to help the joint venture
  • However, if you don't do this - one person in the venture will "free ride" off of the other advertisements
  • The court says there is no pro-competitive reason for this restraint - they only focused on the possible "spill over" and free riding, which the Court does not agree with
    法院认为,这种限制没有任何有利于竞争的理由--他们只关注可能的 "溢出 "和搭便车现象,但法院对此并不认同
  • The court said this would open to door to allow limited competition for all products, not just one product to help the joint venture if they allowed this to happen
  • "frontal attack on the basic policy of the Sherman Act" BMI v. CBS: Does the conduct of ASCAP fall within the per se violation of price fixing? This is not always an easy answer, so the court sets out guidelines for determining if an agreement falls under the "per se" violation
    BMI 诉哥伦比亚广播公司案 "对《谢尔曼法》基本政策的正面攻击":ASCAP 的行为是否属于操纵价格的本身违法行为?这并不总是一个简单的答案,因此法院列出了确定协议是否属于 "本身 "违法行为的准则
  • Example: Two hardware stores agree to divide the product market aka not sell the same products. One sells hammers, the other doesn't etc. They enter into a "joint venture" in a building but agree to not sell the same products. This is product market division which is illegal per se
    举例说明:两家五金店同意划分产品市场,又称不销售相同的产品。一家卖锤子,另一家不卖,等等。两家五金店在一栋楼里成立了 "合资企业",但同意不销售相同的产品。这就是产品市场分割,本身就是非法的。
  • However, suppose these are small stores in a huge city with a lot of competition? Does this still effect the market?
  • Yes. This is still product market division and per se illegal. But, as a defense, they would argue that the building is essential to being strong competitors and they cannot do it without the ancillary restraint on products because they need to make more money to afford the building, which they would not be able to afford without the product restraint
  • the court said this would fall under rule of reason, and not per se illegal - in complete contrast to three tenors.
  • So, it is pro-competitive, but the market is still restrained
  • Drobak thinks it is not fair to say that a company cannot stop pushing products to become more competitive in the market
  • Music industry blanket license - between the artists, the blanket license is anticompetitive because it is the same fee for every artist
  • The industry is literally price-fixing, but the industry is set up to where blanket licenses are the only way to enforce the patent on the songs
  • If they had to go to the owners for every song, they would have to contact them all the time, etc.
  • It would literally be inefficient to negotiate/set up a contract for each individual song/royalty because it is stream-lined between two brokers
  • for price fixing to be "per se" illega/it must be plainly anticompetitive AND very likely without redeeming virtue
  • This design has strong economic benefits and allows it to fall under rule of reason despite literal price-fixing 21
  • The blanket license here is composed of the individual compositions, plus the aggregating service
  • Whole is greater than the part
  • It is marketable package due to the convivence and efficiency
  • Blanket fee amount is to be determined under the rule of reason under remand

- Parallel pricing/standing:

  • Conscious parallelism is there enough evidence to go to jury and show there is an agreement?
    - There must be enough evidence showing agreement that the jury verdict will not be overturned on appeal
    - Parallel pricing alone is NOT enough
    - It must be parallel pricing PLUS something else showing an agreement
    - The issue is showing an agreement just because price is the same does not mean that it is the same through collusion
    - Sharing price information may be a plus-factor when considering a pricefixing claim under the Sherman Act (See Todd v. Exxon)

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  • Example: two gas stations they are located across the street from each other, and the owners meet every morning for breakfast and after they set the same prices for the day. Is that enough?
  • Maybe. Drobak said it depends. If it was every week and they met on Fridays, and then on Fridays they changed the prices, that might be enough to assume they were discussing it but if it is a small town and they are childhood friends, etc., then it is likely they are just parallel pricing without agreement. All depends on the circumstances
    也许吧。德罗巴克说,这要看情况。如果他们每周都见面,然后在周五更改价格,这可能足以认定他们是在讨论 ,但如果是在一个小镇上,而且他们是儿时的朋友等,那么他们很可能只是在没有达成一致的情况下平行定价。一切取决于具体情况
  • Smaller firms are more oligopoly tendent than bigger firms
  • Example: the court previously held that parallel conduct plus going to same trade association meeting and the court said that was not enough
  • Twombly requires facts that show smoke and jury decides fire for antitrust you need evidence showing smoke and jury decides if there is fire
    Twombly 法案要求事实显示烟雾,然后由陪审团决定是否起火 反托拉斯法则要求证据显示烟雾,然后由陪审团决定是否起火
  • Mitucha:
  • Court said there was not enough evidence of material facts
  • Agreement was highly unlikely to be able to have an agreement there were so many moving parts and it did not make economic sense
    达成协议的可能性极小 有太多的因素在起作用,在经济上不合理
  • Basically, it would have been 21 Japanese firms losing money in USA to drive out USA manufactures BUT they allege that they are overpricing so much in Japan that they are able to pay for the underpricing in America
    基本上,在美国亏损的 21 家日本公司会将美国制造商赶出美国 ,但他们声称,他们在日本的定价过高,因此能够为美国的定价过低买单。
  • Court said this does not make sense because the market shares were different across Japan & USA markets
  • Thus, the companies were taking of loss in USA but only gain in Japan no economic sense
  • Possibly other reason than economic but under antitrust, the assumption is, all firms act like rational economic actors
  • This assumption fails when companies act irrational

- The Sherman Act prohibits collusion, but does NOT force companies to compete

  • Therefore, they do not have to compete with price

- Sharing price information:

  • Sharing price information can be a "plus factor" when considering a price-fixing claim under Sherman Act
    - Standing alone, sharing price information is not per se illegal
    - This is governed under the rule of reason
    - Pro-competitive vs. anticompetitive effects?
    - Todd v. Exxon: (Oligopsony) 22
    - Sharing information between 14 companies in the oil industry about price of labor
    - This causes salary to be depressed because all competitors are getting together and setting price, employees cannot go to other companies and ask for more money
    - 这就造成了工资的低迷,因为所有的竞争对手都在一起定价,员工无法去其他公司要求更高的薪水。

    - These jobs require industry specific skills, so the workers are unable to move to other industries
    - If they shared the information about salary publicly, it would not be "price sharing"
    - However, sharing price to manipulate the market is illegal
    - Court said that this is likely a price-fixing case because of the agreement, but pled information sharing, so the Court looked at it under the rule of reason instead of per se violation
    - 法院表示,由于存在协议,这很可能是一起操纵价格案件,但 承认信息共享,因此法院根据合理规则而非本身违反规则来审理此案。

    - If the pled price-fixing, this would have likely been per se illegal
    - Court must consider the structure of the industry and the nature of the information exchanged
    - The nature of the data, who has access, how it is exchanged
    - The relevant criteria to determine the nature of the information exchanged is:
    - Time frame of the data
    - Exchanges of current price information has the greatest potential for generating anti-competitive effects and although not per se illegal have consistently been held to violation the Sherman Act - alleges exchanged past and current salary information, as well as future salary and budget information
    - 当前价格信息的交流最有可能产生反竞争效果,尽管其本身并不违法,但一直被认为违反了《谢尔曼法》 - 指控 交流了过去和当前的工资信息,以及未来的工资和预算信息。

    - The specificity of the information
    - Price exchanges that identify particular parties, transactions and prices are viewed as potentially anticompetitive because they may be used to police a secret or tacit conspiracy to stabilize prices
    - 确定特定当事人、交易和价格的价格交流被视为潜在的反竞争行为,因为它们可能被用于监督稳定价格的秘密或默契合谋。

    - Whether the data is made publicly available
    - In sum, the information exchanged here weighs against the motion to dismiss, and arouses suspicion of anticompetitive activity under the Rule of Reason
    - 总之,在此交换的信息不利于驳回动议,而且根据 "合理规则",令人怀疑存在反竞争活动。

    - 22 schools on the east coast would meet to discuss "overlap students" to make sure they came up with the same amount of need that the parents actually needed to lower the need whenever they could
    - 东海岸的 22 所学校将开会讨论 "重叠学生 "问题,以确保他们提出的需求量与家长实际需要的需求量相同,从而尽可能降低需求量。

    - Parents might disclose a second home to one school and not another, so the schools to make sure they all had the same value of need if the student applied to more than one of the 22 schools
    - 如果学生申请了 22 所学校中的多所学校,家长可能会向一所学校而不是另一所 学校透露第二处住所,因此学校要确保他们的需求值相同。

    - The schools compete with quality of education, facility, work study, tuition, scholarship, etc.
    - Everyone was agreeing on financial need and tuition price
    - Need is a component of price, so this seems like price-fixing, but the court uses the rule of reason
    - Based on spreading the need of scholarship money, you are buying a greater social economic variety of students and could offer more scholarships to more people because they would not be giving merit scholarships - they would only be giving scholarships for those based on need of the students who had great credentials
    - 在分散奖学金资金需求的基础上,您可以购买更多社会经济类型的学生,并为更多的人提供更多的奖学金,因为他们不会提供优秀奖学金--他们只会为那些根据需求提供奖学金的学生提供优秀的证书

    - The Court overturns the quick look analysis for the rule of reason analysis because the school needs deeper analysis surrounding the "greater good" of
    - 法院推翻了 "快速审视 "分析法,转而采用 "合理性规则 "分析法,因为学校需要围绕 "更大利益 "进行更深入的分析。

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supplying a greater set of applicants to determine pro-competitive reason for this
  • There is no obvious limitation on revenue or output, so the court wants to take a deeper look at what is going on
  • Is MIT limiting output/admission of fewer student through this policy?
  • No, it is possible to keep the class size the same even with the Overlap policy/meeting
  • However, the money will be spread differently amongst applicants, but not limiting the number of students admitted
  • Evidence showed that the mix of students changed, but not the #

- Settlements:

- FTC v. Actavis, Inc.:

  • Reverse payments agreements are the type of agreements occurring between patented brands and generic brands
    - Rule: a settlement agreement among patent owners may violate antitrust law, even if the anticompetitive effects are within the exclusionary scope of the patent
    - 规则:专利所有人之间的和解协议可能违反反托拉斯法,即使反竞争效果在专利的排除范围之内

    - Do these agreements unreasonably diminish competition in violation of antitrust laws?
    - Yes, a settlement agreement among patent owners may violate antitrust law, even when anticompetitive effects are within the exclusionary scope of the patent
    - 是的,专利所有人之间的和解协议可能违反反托拉斯法,即使反竞争效果在专利的排除范围之内

    - Here, the settlement agreement between Actavis and Solvay has the potential for significant anticompetitive effects, as Solvay is the social justifications and turned it into an economic interest
    - 在此,阿特维斯与索尔维之间的和解协议有可能产生重大的反竞争影响,因为索尔维将社会理由转化为经济利益

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essentially paying Actavis to stay out of the relevant market for a specified period.
  • Moreover, the payout is so large, it cannot be explained by traditional settlement justifications, which strongly suggest that the real motive is to maintain monopoly
  • Dissent:
  • The exclusionary rights granted to patent owners are an exception to antitrust law, and any settlement within the exclusionary scope of a patent should not be subject to antitrust law
  • The dissent views the payout as a way to get a competitor to respect the validity of its patent & believes this ruling will reduce settlements in patent litigation and give less incentive for generic drugs to enter the market
  • Updating the rule of reason:
  • California Dental Association v. FTC:
  • the court held that if a practice is potentially pro-competitive, then a fullblown market analysis is required, and the plaintiff has the burden to show that the restraint is anti-competitive. Often this means having to show that the defendant has "market power" - i.e., the ability to profitably raise price above competitive levels.
    法院认为,如果一种做法可能有利于竞争,那么就需要进行全面的市场分析,原告有责任证明这种限制是反竞争的。这通常意味着必须证明被告具有 "市场支配力",即有能力将价格提高到竞争水平之上并从中获利。
  • In the world "quick look," the defendant must show a pro-competitive reason for the action. In rule of reason, the plaintiff must show an anticompetitive effect. The rule of reason is where we are today.
    在 "快速审视 "的世界里,被告必须证明其行为具有有利于竞争的理由。在理性规则中,原告必须证明反竞争效果。理性规则就是我们今天的处境。


In many cases, the right to petition the government trumps antitrust. States and municipalities may take actions that would otherwise violate the antitrust law.
  • State action:

- Parkerv. Brown

  • State of CA passed laws creating a cooperative marketing program for raisins and implemented competition restrictions (reducing output) and pooled funds to stabilize the market. was a packer and producer of raisins whose
    加利福尼亚州通过法律建立了葡萄干合作营销计划,并实施竞争限制(减少产量)和汇集资金以稳定市场。 是葡萄干的包装商和生产商,其葡萄干的包装和生产均由加利福尼亚州政府负责。

    business was harmed by this. The Court found that the Sherman Act was designed to regulate private conduct, not public action.
    - States are immunized from federal antitrust laws
    - Elements of Parker immunity:
    - (1) state policy that compels anticompetitive conduct and
    - A company may collude to lobby the government to delegate anticompetitive conduct, as long as they are lobbying government, and not private actor
    - 只要是游说政府,而不是游说私人行为者,公司就可以串通起来游说政府委托其实施反竞争行为

    - The Court thinks of the government as a "barrier" to make sure that it is not unreasonably harming consumers - also, the public can turn to the poles if they are unsatisfied with the conduct
    - 法院将政府视为 "屏障",以确保其不会对消费者造成不合理的损害--同时,如果公众对行为不满意,也可以向两极求助

    - Giving companies the ability to merge is NOT delegating anticompetitive conduct - there are ways to merge a corporation without being anticompetitive
    - 赋予公司合并的能力并不是将反竞争行为的权力下放--有很多方法可以在不反竞争的情况下实现公司合并

    - Merge not sufficient to be state delegation because not inherently anticompetitive
    - Zoning/billboard regulation = sufficient to be state delegation because that is inherently anticompetitive
    - (2) state supervises any anti-competitive conduct
    - If the STATE actor delegates a PRIVATE company the authority to maintain something that is usually the duty of the state, then you need STATE supervision
    - 如果国家行为者授权私营公司维护通常属于国家职责的东西,那么就需要国家监督

    - However, if it is the state actor doing the action, you do not need the state supervision because it is inherent in the act
    - Influencing the government:
    - Noer.
    - Lobbying the public to vote for state rules with trucking taxes
    - They do so by lying or over exaggerating the issue to the public - The Court held that if you lie in an adjudicative process, you lose immunity because you are creating fear in the public to lobby against legislature in Court
    - 他们的做法是向公众撒谎或过分夸大问题--法院认为,如果你在裁决过程中撒谎,你就会失去豁免权,因为你在公众中制造恐惧,从而在法庭上游说反对立法机构。

    - You can exaggerate outside of the judicial proceeding/lie in politics, but you cannot lie in court proceedings and probably not to state actors
    - 你可以在司法程序之外夸大其词/在政治上撒谎,但你不能在法庭程序中撒谎,可能也不能对国家工作人员撒谎

    - Bribing is also OK under antitrust laws there are criminal laws for this, the Court does not want to be involved in the way a Court is ran/corruption
    - 根据反垄断法,行贿也是可以的 ,对此有刑事法律规定,法院不希望卷入法院的管理方式/腐败中。

    - Publicizing things is OK because no effects occur until someone lobbies the legislature because you are not "to the government yet"
    - 公布事情是可以的,因为在有人游说立法机构之前不会产生任何影响,因为你还不是 "政府的人"

    - The government is the middleman between anticompetitive laws and the effect of public - they rely on the government to be the "reason" and prevent negative effects
    - 政府是反竞争法律与公众效应之间的中间人--他们依靠政府的 "理智 "来防止负面效应的产生

    - If the government does something that harms the public, the public can turn to the polls and vote them out
    - Preventing the use of plastic conduit by "stacking" the meeting and all voting against the regulation
    - The meeting was an "association" that made the rules that the State adopted basically, they were a government actor, but they were a strong influence on the government, so pretty much whatever they held, passed at the State level
    - 该会议是一个 "协会",负责制定国家通过的规则 ,基本上,他们是 一个政府行为者,但他们对政府有很大的影响力,因此,几乎他们举行的任何活动都会在国家层面获得通过

    - Allied Tube followed all of the rules of the association
    - The court said that they packed the house for a personal reason, not because of the effect it would have on the safety of the public
    - 法院说,他们收拾房子是出于个人原因,而不是因为会对公众安全造成影响

    - The motivation behind their actions were purely anticompetitive
    - Noerrimmunity did not apply because it was not a state actor - it was a private association that strongly influenced the state
    - Noerr 豁免并不适用,因为它不是国家行为者--它是一个对国家有重大影响的私人协会

    - The court gives them rule of reason - but this does not pass under it context of the issue
    - If it was about preventing toxic fumes, it might be OK under rule of reason, but it was purely economic
    - A publicity campaign would be even if it is deceptive
    - Packing a meeting is if it is the legislature, but if it is a private company and the motivations are a deceptive practice, it is NOT OK
    - 如果是立法机构,包装会议是 ,但如果是私营公司,而且动机是欺骗性的,那就不行了

    - The Court views it as
    - Lobbying association government public
    - So, this change in line-up from previous cases creates a new form of barrier, with the government no longer acting as the initial barrier to the public - rather, the association is the barrier, which is an issue with the Court
    - 因此,与以前的案件相比,这种阵容上的变化创造了一种新形式的障碍,政府不再是公众最初的障碍--相反,协会才是障碍,这是法院的一个问题


  • Unilateral actions by a firm to acquire or to maintain monopoly power are addressed in section 2 of the Sherman Act
  • Section 2 does not forbid mere possession of monopoly power and does not proscribe monopolies resulting from superior product, business skills, or historical accident.
    第 2 条并不禁止仅仅拥有垄断权,也不禁止因产品、业务技能或历史偶然因素而产生的垄断。
  • Definition:
  • The Sherman Act only outlaw's intentional monopolization - requiring proof of possession of monopoly power in a relevant market and the intentional acquisition or maintenance of the power through anticompetitive conduct
  • Prima Facie § for a monopoly claim the elements are:
○ (1) Possess monopoly power in relevant market
- Relevant market
- What products are reasonably interchangeable? (product factor)
- Where there are alternatives that buyers may readily use for their purposes, illegal monopoly does not exist merely because the product monopolized differs from the others - Look at cross-elasticity of demand, competition with other products, how far consumers are willing to travel for the substitute, and the functional interchangeability of those products (Alcoa)
- 如果存在买方可随时用于其目的的替代品,非法垄断就不会仅仅因为被垄断的产品不同于其他产品而存在 - 看一下需求的交叉弹性、与其他产品的竞争、消费者为获得替代品愿意走多远,以及这些产品的功能互换性(美国铝业公司)。

- Single brand markets may constitute a relevant product market, but this view is controversial b/c neoclassical price theory of aftermarket pricing (Eastman Kodak)
- 单一品牌市场可能构成相关产品市场,但这一观点存在争议,因为新古典价格理论认为售后市场定价(伊士曼柯达公司)。

- Where can purchasers practically turn for the product? (geographic factor)
- There may be submarkets where a number of local sellers compete with nationwide sellers (i.e., market for beer)
- But we do not look at submarkets of consumers unless there is something unique about the consumer - we aggregate the consumer base
- 但是,除非消费者有其独特之处,否则我们不会研究消费者的子市场--我们将消费者群体汇总起来

- Consider transportation costs, delivery limitations, customer convenience of preference, the location and facilities of other producers and distributors
- 考虑运输成本、交货限制、客户偏好的便利性、其他生产商和分销商的位置和设施

- Share of relevant market
- Monopoly power is the power to control prices or exclude competition in the relevant market (Alcoa)
- Market power in the economic sense, is a function of the elasticity of the demand curve facing the firm - the more elastic the damned, the less market power a firm has
- 经济学意义上的市场支配力是企业面临的需求曲线弹性的函数--弹性越大,企业的市场支配力就越小

- A firm's ability to raise prices is limited to the ability of consumers finding substitutes in the relevant market
- Is the share enough to raise price?
- Usually, of market is rule of thumb, but not always
- Market share may not be determinative of market power
- Look at barriers to entry future market power, etc.
- United Shoe - Microsoft (structural barriers)
- Has defendant acquired or maintained a monopoly through anticompetitive conduct?
- Purposeful and intentional action to acquire or maintain that power (such as predatory pricing, etc.)
- Exploitive price fixing, and other collabs that push price up and exploit consumers
- May also be predatory conduct
- Exclusionary = boycotts, anything that might eliminate or marginalize competitors by disabling the competition - firm protecting or increasing its own power at the expense of consumers
- 排他性 = 抵制,任何可能通过削弱竞争对手的能力来消灭竞争对手或使其边缘化的行为 - 企业以牺牲消费者利益为代价来保护或增强自身实力

- With exclusionary acts we can assume monopolistic intent based on the exclusionary act because the corporation is already a monopoly
- 对于排他性行为,我们可以根据排他性行为推定其具有垄断意图,因为公司已经是垄断者了

- The Court has stated that exclusionary comprehends, at the most, 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)
- 法院指出,排他性行为最多包括以下行为:(1) 有损竞争对手的机会,(2) 不促进实质上的竞争,或以不必要的限制方式促进竞争(阿斯彭滑雪公司)。

- The best way to show exclusionary conduct is by pointing to cases where similar conduct has been found to be exclusionary and drawing paralle/s to those cases
- 证明排除性行为的最佳方式是指出类似行为被认定为排除性行为的案例,并与这些案例进行类比

- Exclusionary conduct imparing competition
- United Shoe International
- Alcoa
- Expanding into new markets is not anticompetitive
- Pacific Express v. United Airlines
- Predatory pricing
- Matsushita Electric Industrial Co
- Brooke Group
- Utah Pie
- Below Cost Pricing
- Transamerica Computer Co. v. IBM
- Predatory bidding
- Wyerhaeuser Co v. Ross-Simmons Hardwood Lumber Co
- Price-Squeezing
- Pacific Bell v. Linkline
- Alcoa
- Refusal to deal
- Essential Facilities
- MC/ Communications v. AT&T
- Terminal Railroad
- Verizon v. Law Offices or Trinko
- Otter Tail Power
- Airline Schedule/OAG
- Cancelling existing deals
- Aspen Skiing v. Aspen Highlands Skiiing Corp
- Limiting existing deals
- Verizon Communications v. Trinko
- Monopoly leveraging
- Tying
- Eastman Kodak
- Microsoft
- No duty to disclose to competitors
- Berkey Photo Inc. v. Eastman Kodak
- Alaska Airlines v. United Airlines
- Verizon v. Trinko
- Olympia Equipment Leasing Co. v. Western Union Telegraph:
- Patents
- US v. General Electric
- Foreclosing distribution/other dirty tricks
- Microsoft
- Bundling
  • Under § for attempt/conspiracy to monopolize you must show:

- Anticompetitive conduct/exclusionary acts

  • Boycott
  • Lorain Journal v. US
  • Klors v. Broadway Hale Stores
  • Discriminatory Pricing
  • Union Leader Corp
  • Refusal to deal
  • Eastman Kodak v. Southern Photo
  • FTC v. Raymond Bros-Clark Co

- Specific intent to monopolize

Dangerous probability of success in monopolizing in relevant market

  • Market power/market definition
  • There has to be likelihood of ability to monopolize, i.e., market power is likely not enough, but market share is likely enough

- Relevant market

  • The relevant market is the area of effective competition for the , must be measured and defined in order to assess monopoly power
    相关市场是 的有效竞争区域,必须加以衡量和界定,以评估垄断势力
  • This inquiry required definition of the relevant product market and the relevant geographic market

- Relevant product market

  • Consumer preferences and the extent to which consumers find other goods and services reasonably interchangeable - thus, if other goods are thought by consumers to be interchangeable, the good will generally be included in the relevant market
  • Single-branded markets - Supreme Court has held that a single brand or service can be a relevant market, although this theory is controversial

- Relevant geographic market

  • The relevant geographic market is the area in which competing sellers sell or consumers practically turn to for substitute goods (there may be submarkets within a general geographic market)
  • Monopoly power within market
  • This is the power to control prices or exclude competition in the relevant market

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  • Firms in monopoly or oligopoly markets possess some degree of market power, as compared to firms in competitive marker structures
  • “measuring market power"
  • Alleged monopolist has presently captured is the prime factor examined by courts - although not the sole determinate
  • Generally, share in excess of is strongly suggestive of monopoly power, whereas a market shares below is not enough

- Other factors:

  • Barriers to entry
  • Another determination of market power is whether there are significant barriers to new firms that wish to enter into the market
  • A market share was held not to constitute a monopoly where there were no barriers to entry
  • Also, lack of future market potential such that a company will no continue to dominate the market precludes the finding of a monopoly

- Purposeful act requirement

  • Because the mere possession of monopoly power alone is insufficient to constitute a violation of §, some additional act or conduct is required before a violation will be found.
    由于仅仅拥有垄断权不足以构成对 § 的违反,因此在认定违反行为之前,还需要一些额外的行为或举动。
  • The additional purposeful act will be found if the has engaged in predatory or exclusionary conduct to acquire or maintain monopoly
    如果 从事掠夺性或排他性行为,以获取或维持垄断地位,则可认定为额外的有目的行为。
  • Caution: deliberate or purposeful acts to not include monopoly power resulting from superior skill, foresight, or industry or that which is thrust upon a person because of market conditions - note that specific intent to monopolize is not require
  • Examples of anticompetitive conduct
  • Exclusionary conduct that eliminates competition
  • Predatory pricing - below-cost pricing where has a dangerous probability of recouping they money it lost
  • Foreclosing distribution channels
  • Bundled rebates
  • Anticompetitive denial of access to an essential facility
  • A firm with monopoly power cannot cancel existing deal in a manner that reinforces or increases the firm's monopoly power refusal to deal is not precluded conduct**
    具有垄断实力的公司不能以加强或增加公司垄断实力的方式取消现有交易 拒绝交易不排除行为**
  • Monopsony power
  • § 2 applies to monopoly power exercised on the side of the buyers

- Defenses:

  • Innocently acquired
  • Natural monopoly

- Attempts to monopolize

  • §2 also prohibits attempts to monopolize. A must prove that a has engaged in predatory or anticompetitive conduct with a specific intent to monopolize, and a dangerous probability of achieving monopoly power
    §第 2 节还禁止企图垄断。 必须证明 参与了掠夺性或反竞争行为,具有垄断的具体意图,以及实现垄断权的危险可能性。
  • Aggressive competition is NOT illegal under this

- Conspiracy to monopolize

  • Conspiracy is covered under § and §
  • Section 1 prohibits conspiracies in restraint of trade
  • Section 2 conspiracy requires proof that the parties were consciously committed to the anticompetitive scheme

- IP & duty to license

  • Monopolist desire to exclude others from protected IP is presumptively valid justification for any harm to consumers
  • Plaintiff may rebut by showing evidence that monopolists acquired IP rights illegally, by showing pretext (look to employees' state of mind), and sham litigation

Overview of issues:

  • Predatory Pricing
  • Below cost pricing
  • With intent (section 2 needs intent) and/or effect (section 1, not intent needed) of eliminating competition
  • With a likely prospect of recoupment through monopolistic (supra-competitive) pricing later, once competitors are gone
  • Tying Arrangements:

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  • When you take a product that has a dominant market position (the tying product) and condition the sale of the tying product upon simultaneous purchase of another product that has a weaker market position (the tied project)
  • There are different elements to establish a tying claim:
  • Are there two distinct products?
  • Is there market power in the tying product?
  • Is there foreclosure (a forcing effect) on the purchaser to take the tied product preventing purchase of a competing product?
  • Does the tying relationship between the goods have the effect of reducing competition through increasing the market power of the seller?
  • Does the activity at issue have relation to interstate commerce?
  • Essential facilities doctrine
  • Attempts to monopolize:
Section 2 of the Sherman Act prohibits attempts to monopolize by companies that do not possess monopoly power but engage in anticompetitive conduct designed to achieve it. To prove an attempt to monopolize, one must establish:
谢尔曼法》第 2 条禁止不具备垄断能力但从事旨在实现垄断的反竞争行为的公司企图垄断。要证明企图垄断,必须证明:
  1. The defendant had a specific intent to achieve monopoly;
  2. That it acted in an anticompetitive manner designed to injure its actual or potential competition; and
  3. There was a dangerous probability that monopoly power would in fact be achieved.
Since companies that actually possess monopoly power are an industrial rarity, most Section 2 litigation involves allegations of attempts to monopolize; and it is the "dangerous probability of success" element on which the resolution of most cases turns.
由于真正拥有垄断能力的公司在行业中十分罕见,因此大多数第 2 条诉讼都涉及企图垄断的指控;而大多数案件的解决都取决于 "危险的成功概率 "这一要素。


Most Courts define a market as the narrowest product or group of products in the smallest geographic area such that a hypothetical monopolist could non-transitorily profitably raise price above competitive levels. Even with this precise approach, it still is a challenge to determine which market is the relevant one
Relevant market includes commodities reasonably interchangeable by consumers for the same purposes. Cross-elasticity is an element of determining market.
Alcoa "What is Monopolization?"
Cellophane "What is a market?"

Relevant Market:

  • Alcoa:
    - Should the Court include ingot production and sales in the market definition?
    - The court concludes that we should use the production over the sales because if Alcoa wants to, they can sell more to the market because they have produced it - whatever Alcoa wants to sell to the market is up to them
    - 法院的结论是,我们应该使用生产量而不是销售量,因为如果美国铝业公司愿意,他们可以向市场出售更多的产品,因为他们已经生产出了这些产品--美国铝业公司想向市场出售什么都由他们自己决定

    - What do we do with the secondary market ingot sales?
    - By expanding the market to include the ingot sales, Alcoa's market share will decrease to
    - Since Alcoa is providing the secondary materials, they are choosing if they want to sell the aluminum and are indirectly controlling the secondary market
    - 由于美国铝业公司提供二级材料,因此他们可以选择是否出售铝,并间接控制二级市场。

    - If Alcoa does not provide the scrap needed, then the secondary market will have nothing to sell
    - Thus, we exclude the secondary market because it is not a competition with Alcoa because Alcoa controls it 29
    - Can buyers go to the secondary market to get aluminum?
    - No, because Alcoa control how much is going into the secondary market
    - Was the monopoly here industrial or exclusionary?
    - The Court finds that even though Alcoa is industrial, it was anticompetitive
    - Alcoa was stimulating demand and building new plants to meet the demand they stimulated - which is industrial - but this hurt competitors
    - 美国铝业公司(Alcoa)刺激了需求,并建立了新工厂来满足他们刺激的需求,这就是工业需求,但这损害了竞争对手的利益。

    - Alcoa was not allowing others in to meet the demand - instead, they were expanding the meet it

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  • Drobak said this would NOT be the case today - this is an extreme approach
    - Rule: a business violated the Sherman Act if it possesses monopoly power and willfully acquires that power by predatory or exclusionary conduct
    - 规则:如果企业拥有垄断权,并故意通过掠夺性或排他性行为获得这种权力,则违反了《谢尔曼法

    - Sherman may apply to conduct abroad as long as the conduct was intended to affect commerce within our boarders
    - It is OK to be a passive monopoly, but Alcoa sought to monopolize its market by actively squeezing out the competition
    - This opinion is known for the distinction between passive and active monopolies
    - Price squeeze:
    - Alcoa would underprice its aluminum products
    - Competitors would have to also lower their price to meet Alcoa's, which would lower the profit margin
    - Alcoa would also raise the price of essential ingredient to make aluminum, which would further shrink the profit margin for outside competitors
    - 美国铝业公司还将提高制造铝的基本原料的价格,这将进一步缩小外部竞争者的利润空间

    - In the short-term this benefits consumer because the price is lower, however, in the long-term this harms consumer because it drives out all competition, allowing Alcoa to raise prices to monopoly level
    - 从短期来看,这有利于消费者,因为价格降低了,但从长期来看,这损害了消费者的利益,因为它赶走了所有竞争者,使美铝公司得以将价格提高到垄断水平。

    - Today, price squeezing is legal
    - Cellophane:
    - Market includes commodities reasonably interchangeable by consumers for the same purposes
    - An element of determining market is cross elasticity
    - High cross-elasticity presents as assumption that the products compete within the same market
    - The market is composed of products that have reasonable interchangeability for the purposes for which they are produced

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  • Price, use, quality, characteristics
    - The Court concludes that there is cross-elasticity between Cellophane and other wrappings, thus other wrappings are a part of the relevant market
    - 法院的结论是,玻璃纸与其他包装物之间存在交叉弹性,因此其他包装物也是相关市场的一部分

    - Dissent:
    - Cellophane is different from other packaging materials in transparency, strength, and price
    - Buyers still purchased cellophane despite it being the most expensive packaging material on the market
    - When other products in the wrapping market change their price, cellophane is the only one that does not price follow
    - Cellophane required the manufacturing technique to remain secret and confidential, which prevented other companies from entering the market, despite profits increasing at such rates that would normally encourage competition
    - 玻璃纸要求生产技术保密,这就阻止了其他公司进入市场,尽管利润的增长速度通常会鼓励竞争

    - Cellophane fallacy:
    - If DuPont is a monopoly, how do we know that DuPont is not setting monopoly price
    - We want to look at the competitive price and watch to see if the price goes up and down around competitive price, but here we do not know the competitive price
    - 我们希望了解竞争价格,观察价格是否围绕竞争价格上下波动,但在这里我们不知道竞争价格。

    - If the firm is already a monopoly, it is already pricing at a point reflecting the use of its monopoly power, and just below that level will cause a critical mass of buyers to shift to substitutes
    - 如果企业已经是一家垄断企业,那么它的定价已经反映了其垄断力量的使用情况,只要低于这个水平,就会导致临界质量的买家转向替代品

    - At this point, by definition, alternative products and their sellers will keep the monopolist's price at its current price and no higher
    - 此时,根据定义,替代产品及其销售商将使垄断者的价格保持在当前价位,而不会更高

    - So, no one would expect an increase in profit-maximizing monopolist's price to cause buyers to shift to an alternative product
    - 因此,没有人会指望利润最大化垄断者的价格上涨会导致买家转向替代产品

    - Microsoft:

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  • Intel-compatible personal computer operating systems is the market according to the Court
  • Microsoft argues that the Court should consider MacOS, non-PC devices, and middleware
  • MacOS - Court finds that a person with a Mac will not make the switch from Microsoft to Mac because of the switching cost and time it takes to learn a new processing system
    MacOS - 法院认为,拥有 Mac 的人不会从 Microsoft 转到 Mac,因为转换成本高,而且需要时间学习新的处理系统
  • Non-PC - Court finds this falls short of performing all the functions of a PC and are mainly used to supplement a PC
  • Middleware - Having middleware makes it easier to get products across different software
  • Microsoft argues that middleware could usurp Microsoft, but the Court said it is not proper to focus on that because the present or near present is what is considered, not the future
  • The court will not consider something that "may happen" in the future when it is unlikely to happen in the near future
  • Middleware argument is premature, and if Microsoft sees this coming, they should eliminate this threat

Tying arrangements:

  • Kodak (Singular brand market)
  • Whether a competitor who lacks power in the market for the tying product (Kodak had a small share of the copier equipment market) could be held liable for tying a product (parts and services for Kodak equipment) to the detriment of competitors
  • The Court defined the market as Kodak parts and services, which Kodak held of the market
  • Customers of the machines, at the time of purchase, could not obtain information about the suppliers' performance in the aftermarket nor their future needs
  • The switching costs were too high and impractical for consumers to switch brands once they committed to Kodak machinery
  • Thus, Kodak had market power over service and repair in its aftermarket

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  • The theory of liability was that bundling service and parts with equipment violated section 1 of Sherman, while shutting down parts distribution to competing independent service operators violated section 2 of Sherman
    其责任理论是,将服务和零部件与设备捆绑在一起违反了《谢尔曼法案》第 1 条,而关闭向相互竞争的独立服务运营商分销零部件则违反了《谢尔曼法案》第 2 条。
  • This case departs from neoclassical price theory - which we use today
  • Neoclassical price theory assumes customers are all knowing when they purchase a product and gets rid of all assumptions about access to switching costs and difficulties switching products
  • The jury here found that you can have a market for branded products
  • Dissent: The consumer damages here are trivial and consist of issues everyone encounters in ant transaction or market. Competition in the copier market will prevent the overreaching of the aftermarket


If there are no barriers to entering the market, then market power is misleading.
- Microsoft: (structural barriers)
- Even though the Court found Microsoft to have monopoly power - they argue that there are no barriers to entering the market
- However, the Court says there are structural barriers to entry
- Here, consumers prefer operating system for which a large number of applications have been written and developers primarily only write applications for operating systems that have a substantial consumer base
- 在这种情况下,消费者更喜欢已经编写了大量应用程序的操作系统,而开发人员主要只为拥有大量消费者的操作系统编写应用程序。

- When the market tips towards one software, it becomes difficult to enter into the market
- United States v. United Shoe Machine (Magnetic lies of leasing/barriers to entry by lease)
- United has a full capacity clause in the leasing agreement - this requires the company to produce of their shoes with United Machines if they want the favorable terms of the leasing agreement - The terms include free repairs, discount on subsequent rentals, etc. this also requires competitors to lower cost if they do not offer these benefits
- 美联航在租赁协议中规定了满负荷生产条款--这就要求公司如果希望获得租赁协议中的优惠条款,就必须使用美联航机器生产 鞋--这些条款包括免费维修、后续租赁折扣等。 ,这也要求竞争对手如果不提供这些优惠,就必须降低成本。

- If they lease with another corporation, they lose the rental with United and have to pay the lease or buy the machine
- The machines are super expensive, so it is more beneficial to simply rent from United
United Shoe took less profit where there was competition, and took more profit where there was not competition (i.e., machines that made heels vs. machines that made soles)

- However, this shows that there must be some barrier to entry because no one is entering the market and the profit margin is so great
- 然而,这表明一定存在某种进入壁垒,因为没有人进入市场,而且利润率如此之高

- Normally, if a competitor sees high margin, they move into it
- Charging a monopoly price is an attractive tactic if a competitor sees the monopoly price, they will attempt to move into the market and undercut the monopoly price
- 收取垄断价格是一种有吸引力的策略 如果竞争者看到垄断价格,就会试图进入市场并压低垄断价格

- High prices/monopoly prices = not a violation
- Barriers to entry:
- Clauses to the lease contract were a barrier for competition to enter into market
- Competitors are hurt, but not the customers (in terms of price)
- However, they are hurt in terms of innovation
- Remedy:
- Conduct remedy
- Must let show manufacturers have the choice between leasing or buying the machines
- No manufacturer bought the machine because the leasing terms were so favorable - so, this remedy failed

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  • This case is important to show how you can lock people in through leases - the other companies were innovating, United wasn't - this is a form of competition, and consumers still did not leave United


Essential facility that one competitor controls. If a single company controls access over a certain facility or area, it has a duty to grant reasonable access to competitors if the failure to do so will restrict interstate commerce and harm consumers.
This is an exception to the "no duty to deal" doctrine

Four Considerations Necessary:

  1. Control of essential facility by a monopolist
  2. A competitor's inability to practically or reasonably duplicate the essential facility
  3. The denial of the use of the facility to a competitor
  4. The feasibility of providing the facility

Terminal Railroad:

  • DOJ alleged violation of section 1 and 2
    - It is hard to claim section 2 because no firm alone had enough of the market share to be considered a monopoly
    - Because Terminal was not treating those outside of the joint railroad equally, a lot of railroads were cut off access to . Louis
    - 由于终点站对联合铁路以外的铁路公司一视同仁,许多铁路公司被切断了进入 .路易斯

    - If we accept that it is impossible to duplicate the facility and the only route is controlled by the Terminal Railroad group, then this is a violation of Sherman
    - 如果我们承认不可能复制该设施,而且唯一的路线由终点站铁路集团控制,那么这就违反了《谢尔曼公约》。

    - The Court found based on the physical and topographical condition of the locality, it violated the Sherman Act based on the hinderance and restriction of interstate commerce
    - 法院认为,根据当地的自然和地形条件,它违反了《谢尔曼法》,因为它阻碍和限制了州际贸易

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  • However, Drobak believes the case is stronger under section 1 because of the agreement amongst the competitors

Otter Tail:

Refusal to deal/essential facility
  • OT is vertically integrated: generates, transports and sells power @ retail price
  • Market
  • Each town can only have one distribution system (natural monopoly)
  • Aggregate of towns - geographic market - OT services almost all of the towns
  • Claims
  • There is no other way for two towns to leave their existing electricity without having Otter Tail carry the lines over
  • To do this, OT will not be affected at all - to have the other town do it would be wasteful duplication an extremely expensive, when OT could do it without any cost/burden
    要做到这一点,OT 将不会受到任何影响 - 让其他城镇来做将是浪费资源的重复劳动,而且成本极高,而 OT 可以在没有任何成本/负担的情况下做到这一点
  • However, OT did lay out all expenses up front to do this system
  • This is different than Basketball example because people need electricity and it's an essential product
  • Essentially, Otter Tail was using their monopoly power to destroy threatened competition, which is a violation of the "attempt to monopolize"
    从根本上说,奥特尾巴公司是在利用自己的垄断力量来破坏受到威胁的竞争,这违反了 "企图垄断 "的规定。
  • Cannot foreclose competition to gain competitive advantage or destroy competitor
  • Must compete on the merits (superior service, lower price, more efficient)
  • A company is not required to assist competitors, but if they are refusing on some other basis than efficiency, the court is likely to say it is exclusionary/essential facility
  • If the two towns leave, the electricity cost will go down for the people in those areas, but for the people in the towns not leaving, the cost will go up because the electricity maintenance will be spread over fewer people
  • The court is favoring lower prices for the 2 surrounding towns in exchange for higher prices for OT
  • Is the benefit in the other outside towns enough to force OT customers to bear the burden?
  • from a utilitarian analysis is better because more people benefit than harmed

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  • today, we have federal electricity because the Court overlooked the issue of capital gains - however, this case does follow the Railroad, but when you take a step back, you see the bigger picture

Airline Schedule:

  • OAG, Donnelley, put the commuter airlines in the back
  • Commuter airlines claim the OAG is an essential facility, and they have less access to it
  • The court said this is a different kind of problem than railroad issue because OAG is not a part of the airline business, they are a separate non-benefiting corporation that is making a choice to put the commuter connections in the back of the OAG
    法院表示,这是一个与铁路问题不同的问题,因为 OAG 不是航空公司业务的一部分,他们是一家独立的非福利性公司,选择将通勤连接放在 OAG 的后面。
  • OAG is a monopoly, but they are not benefitting in any way from this decision


Monopolization and attempt to monopolize are different. Attempt to monopolize a firm must specifically intend to gain monopoly and its challenged acts must threaten to produce a dangerous probability of achieving monopoly
垄断和企图垄断是不同的。企图垄断 企业必须有获得垄断地位的明确意图,其受到质疑的行为必须威胁到实现垄断的危险可能性。
Conduct that is anticompetitive for purposes of the attempt offense will also be anticompetitive for the monopoly offense, and to that extent, the offenses may merge

Exclusionary Conduct:

Things that all exclude competitors from the market

Loraine News: (early case showing exclusionary conduct under § )

  • The publisher refused to accept local advertisements in the Journal from any company that advertised with Loraine County Radio Station (WEOL radio)
    出版商拒绝接受任何在洛林郡广播电台(WEOL 电台)做广告的公司在《日报》上刊登当地广告
  • Definition of market:
  • Providing news to the geographical area
  • This included newspaper and radio - Loraine had of the market with the newspaper (primarily a newspaper market)
  • Even after the radio started up, Loraine's market shares barely changed - Loraine wanted to preserve their monopoly power by limiting the market share of the radio
    即使在广播电台开播后,Loraine 的市场份额也几乎没有变化--Loraine 希望通过限制广播电台的市场份额来维护其垄断地位。
  • The Court finds they violated § of Sherman because they refused to advertise for those who advertised on their competitor's station
    法院认为他们违反了谢尔曼的 § 规定,因为他们拒绝为那些在竞争对手电台上做广告的人做广告

Aspen Ski Company: (refusal to deal)

  • Aspen Ski Company stopped selling tickets to the Highlands Ski Company which essentially required Highlands to only include one mountain, instead of 4, and it became a day-trip ski resort

    - The consumers and Highland Ski Company are both harmed - their stock decreases significantly, etc.
    - The court says based on this harm, the burden shifts to Aspen to show valid business justification for this
    - The company was sick of dealing with Highland, so they wanted Highland to go out so they could have more customers, i.e., stealing Highlands Customers
    - 该公司厌倦了与高原公司打交道,因此他们希望高原公司倒闭,这样他们就能有更多的客户,即抢走高原公司的客户

    - Aspen said it was too difficult to continue having the all-access ski pass and it was cumbersome to determine the allocation of revenue if they offered joint ticket
    - 阿斯彭说,要继续使用滑雪通行证太困难了,而且如果提供联票,要确定收入分配也很麻烦。

    - Valid business justification
    - Aspen also claims that Highlands offered an inferior product, which would harm their reputation
    - Valid business justification
    - However, the court said this violates § of Sherman because the jury said the justifications were not valid and there was monopolistic intent
    - 然而,法院认为这违反了《谢尔曼法》 § ,因为陪审团认为理由不成立,存在垄断意图

    - If the jury had ruled the other way would the Court have upheld? - Likely no, because there was evidence that the skiers preferred a joint lift ticket with Highland, so consumers were harmed by removing this joint ticket
    - 如果陪审团做出了相反的裁决,法院会维持原判吗?- 可能不会,因为有证据表明滑雪者更喜欢与高地滑雪场的联票,因此取消联票会损害消费者的利益。

    - If there was never a joint ticket to begin with, and consumers never had the benefit of a lift ticket taken away from them, then there likely would be a different outcome
    - 如果从一开始就不存在联票,消费者从未被剥夺过电梯票的利益,那么很可能会出现不同的结果

    - However, since the benefit was taken from them, and the Court saw evidence of harm, it led to more favorable ruling for Highland
    - In either case, the consumers would benefit, however, it is different to enter into an agreement and then withdraw compared to never entering into the agreement
    - 无论在哪种情况下,消费者都会受益,但签订协议后又撤销与从未签订协议的情况不同

    - Specifically, Aspen states, "exclusionary comprehends at the most 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"
    - 具体而言,Aspen 指出,"排他性最多包括以下行为:(1) 可能损害竞争对手的机会,(2) 不促进实质上的竞争或以不必要的限制方式促进竞争"。

    - It is important that consumers were harmed, and they changed a historical course of conduct

- § 2 does NOT force businesses to work with each other for the benefit of consumers, unless consumers had the benefit and then it was taken from them
- 第 2 节并不强迫企业为了消费者的利益而相互合作,除非消费者已经获得了利益,但又被剥夺了。

Olympia Equipment Leasing Co. v. Western Union Telegraph:

  • Western created Telex service
  • Olympia leased Telex Equipment - Western changed course, withdrew from terminal leasing competitors
  • Claim: alleging that Western had monopoly power over telex service and used the power to curtail competition in the complementary equipment
    诉求:指控 Western 公司对电传服务拥有垄断权,并利用这种权力限制配套设备的竞争
  • However, having two monopolies in the same market would not be profitable
  • Telex is a regulated monopoly (government regulated), so it cannot have a monopoly profit, if Western had a monopoly over equipment, it might make sense - but it doesn't
    Telex 是一家受监管的垄断企业(由政府监管),因此不可能获得垄断利润,如果 Western 拥有设备垄断权,这或许说得通,但事实并非如此。
  • The court says a lawful monopoly has no general duty to help its competitors whether by holding a price umbrella over their heads or by otherwise pulling its competitive punches
  • Western brought Olympia into the market, and then took it away when they found out that Olympia was not selling enough equipment
  • Western wanted to get rid of the equipment - so, they gave it to Olympia, but Western realized they still had too much equipment, so they wanted to get rid of their own by not telling customers about Olympia and instead sell them their left-over equipment
**this case differs from Aspen because in Aspen they could not exist without the joint life ticket - here, Olympia can find its own customers instead of relying on Western referrals

Bowling Alley Hypo:

City only has one bowling alley and it is old and falling apart so no one goes there. Member of the city decide the reason no one is going is because the facility. Thus, they require the bowling alley to lease half of the alley. They split lanes but share concessions and shoes. Is this a good idea to stimulate competition? Forcing someone to lease to a competitor would cause issues. This is the same as the Communications Act case with Verizon and Trinko - forced sharing with competitors.
该市只有一个保龄球馆,而且老旧破损,所以没人去。市政府成员认为,没人去的原因是设施问题。因此,他们要求保龄球馆租赁一半的场地。他们分割了球道,但共享优惠和球鞋。这是个刺激竞争的好主意吗?强迫别人租给竞争对手会引起问题。这与 Verizon 和 Trinko 的《通信法》案例如出一辙--强制与竞争对手共享。

Verizon v. Law Offices of Trinko:

  • V has local service monopoly, competitive long-distance market
    - Congress wanted to create competition in local markets, so they required the local provider to lease services to anyone coming into the market - competitor could choose what they wanted to lease, but local provider did not want to comply because the prices were too low
    - 美国国会希望在本地市场创造竞争,因此要求本地提供商向任何进入市场的人租赁服务 - 竞争对手可以选择他们想要租赁的服务,但本地提供商不想遵守,因为价格太低了

    - Verizon is resisting AT&T attempt to compete in the market
    - Lawyer files suit saying he lost money because was dragging its feet in allowing AT&T to come in
    - Different than Aspen by:
    - Regulatory component of statute enacted by government
    - Thus, cannot argue essential facilities doctrine because they had access to it

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  • The Court said there is no need for antitrust when there is already government regulation under the FCC
  • The additional benefit provided by adding antitrust protection is so marginal and small
  • Doctrine of implied immunity - Congress did not intend for this statute to supersede antitrust laws
  • There was no exclusionary act in this case


  1. Primary line discrimination
a. Pricing that harms people on your level
b. Ex: other pie manufacturers coming in and pricing to hurt other pie manufacturers (Utah Pie)
  1. Secondary line discrimination
a. Price discrimination between manufacturers charging low prices to big manufacturers but high prices to small businesses (this is Robinson Paterson - we are not worried about these - not tested on them)
Average variable costs standard used most often in predatory pricing - sum of all variable costs divided by the output
This may be a surrogate for market costs
Incremental/marginal costs the cost of producing one more unit of output Average total costs always higher than average variable costs because this includes fixed costs
增量/边际成本 多生产一个产出单位的成本 平均总成本 总是高于平均可变成本,因为这包括固定成本

Predatory pricing is defined as:

  1. Below cost pricing
a. Prices are not the wholesale price - wholesale prices are misleading
b. Prices on the books are not the prices - you have to do discovery to determine prices
i. To add recoupment is a huge burden - nearly impossible to win these cases
  1. With a likely prospect of recoupment through monopolistic (supracompetitve) pricing later (once competitors are gone)
a. Reasonable prospect or dangerous probability of recouping profits
b. Rational business owner would not do this unless they are able to recoup profits
  • Utah Pie (predatory pricing)
  • Utah Pie revenue went up because in response to their competition they expanded their production
  • Utah Pie market share went down, but they increased the number of pies they were selling
  • Centennial Pie is charging different prices in areas of high competition
  • Customers were not hurt by this - larger pie selection for lower prices
  • However, this is illegal because it would have a long-term impact on Utah Pie that would cause them to leave the market
  • This would hurt consumers long-term
  • Predatory pricing below costs may hurt consumers by driving competitors out of the market and this would create monopoly and monopoly pricing/less selection for consumers
  • This is protecting competition, not Utah Pie
  • Short term vs. long term -
  • Short term = consumers benefit from price wars
  • Long term = consumers will be hurt because competitors are driven out fo market or they will continue raising prices
  • Key here was intent to hurt Utah Pie
  • This would likely not be the case today - this was a long time ago
  • The statutory test is one that looks forward on the basis of proven conduct in the past - determine an exclusionary act based on what is going to happen in the future

Brooke Group (most important case to Drobak)

  • Generic cigarette case - Liggett introduced a line of generic, low-cost cigarettes that were a hit. B&W responded. By forming vertical agreements with distributors, offering huge discounts, etc. in order to force Liggett out of the market. As a result, Liggett, who had of the generic cigarette market and of the overall market, began a campaign to match the rebates offered by B&W and filed suit. Liggett indicated that B&W was selling cigarettes below costs (hallmark of predatory pricing).
    通用香烟盒 - Liggett 推出了一系列通用的低价香烟,大受欢迎。B&W 对此做出了回应。他们与分销商签订纵向协议,提供巨额折扣等,以迫使利格特退出市场。结果,Liggett 在非专利卷烟市场上占据了 的份额,在整个市场上占据了 的份额,开始了与 B&W 提供的回扣相匹配的运动,并提起了诉讼。Liggett 指出,B&W 以低于成本的价格销售香烟(掠夺性定价的标志)。
  • Evidentiary standard for predatory pricing is high and costs are expensive to show this
  • Although unsuccessful predatory pricing may encourage some inefficient substitution toward the product being sold at less than costs, unsuccessful predation is in general a boon to consumers KEY
  • Pricing signals the market - those signals must give accurate signals to the consumers
  • If you underprice a product, people buy too much of it - you are giving the wrong idea
  • Here, we are rejecting neoclassical price theory - they would rather help consumers when push comes to shove - consumers gain more than they will have to pay back in the recoupment phase
  • Plaintiffs showed the predatory pricing - but they failed to show recoupment
  • But the recoupment was not in generic cigs, it was in branded too
  • The plaintiffs should have showed generic and braded
  • Prices between generic and branded got closer together, which in theory would hurt consumers, but they failed to show the recoupment because they only focused on the generic only
People have brough predatory pricing claims for hiring scientists from competitors - not because you want them, but you want to hurt the competition - these have not been successful. The whole idea is you will hurt yourself in the short term to help yourself in the long-term WeyerHaeuser v. Ross-Simmons:
有人曾因雇用竞争对手的科学家而提出掠夺性定价索赔--不是因为你想要他们,而是你想伤害竞争对手--这些索赔都没有成功。整个想法是,你会在短期内伤害自己,以便在长期内帮助你自己,WeyerHaeuser 诉 Ross-Simmons:
  • W is buying timber at a higher rate
  • By paying a higher price, they are driving their competitors out of business
  • If they are the only wholesale buyer then they can set the price anywhere they want - obviously they will lower price when competition is gone
  • Wonly has power in the log market - not the board market
  • The Court holds that this does not hurt consumers
  • Normally, W would pass the higher prices onto the board market - but since the board market is competitive, they cannot do this
  • It would be different if had market power in boards too
  • W is just hurting itself, while sawmills are the ones being hurt
  • Long-term this will hurt the lumberjacks if the other wholesale log buyers are driven out of the market
  • To determine predatory pricing, we look at how much they are paying for the log and the profit from selling the logs to market
  • We compare them to determine predatory pricing
  • Predatory bidding on the buy side must cause the cost of the relevant output to rise above the revenue generated in the sale of the outputs
Ex: Suppose you can get 10 board from 1 log. And that 10 boards generate income. Paying to buy a log would be predatory. "A predator's bidding on the buy side must have caused the cost of the relevant output to rise above the revenue generated in the sale of the outputs"
例如:假设您可以从 1 个日志中获得 10 个板块。而 10 块木板能带来 的收入。支付 购买原木就是掠夺行为。"掠夺者在买方的出价必须导致相关产出的成本高于产出销售所产生的收入"。


Pacific Bell Telephone v. Linkline Communications:

  • AT&T selling DSL
  • AT&T retail price is so low and its wholesale price is so high it squeezes the competition out of the market
  • In Alcoa, this was illegal - but this court said they are legal in modern Court
  • Today, these are legal because there is no duty to deal with competitors in antitrust
  • "firm with no duty to deal in wholesale has no obligation to deal under terms/conditions favorable to its competitors"
  • On the retail side, AT&T is charging the low retail price to squeeze out
  • The price is low, but still above production costs - thus, it is not predatory pricing
  • Low price to customer is irrelevant if not predatory
  • Common Standard: the must leave its rivals a fair or adequate margin between the wholesale price and retail price
  • No duty to deal + no predatory pricing violations under antitrust law
  • A regulation or merger duty to deal is not antitrust duty - keep them separate
Boundary case price-squeeze:
Cascade Health Solutions v. PeaceHealth: (bundled discount)
  • McKenzie and PeaceHealth were the only providers of primary and secondary hospital care in Lane County
  • McKenzie brought suit against PeaceHealth for anticompetitive price bundling when making service offerings to insurers
    McKenzie 控告 PeaceHealth 在向保险公司提供服务时进行反竞争价格捆绑
  • For example, PeaceHealth had offered one insurer a reimbursement rate of to remain the insurer's preferred provider for all hospital services, but a rate of only if the insurer added McKenzie as a preferred provider
    例如,PeaceHealth 曾向一家保险公司提供 的报销率,以保持其所有医院服务的首选提供商地位,但如果该保险公司将 McKenzie 增列为首选提供商,则报销率仅为
  • The jury found for McKenzie and awarded damages - the verdict followed an instruction by the Court that did not allow the jury to consider PeaceHealth's relative efficiency in offering bundled services before assessing the likelihood of anticompetitive effects
    陪审团判定 McKenzie 胜诉并给予损害赔偿--判决是在法院作出指示后作出的,该指示不允许陪审团在评估反竞争影响的可能性之前考虑 PeaceHealth 在提供捆绑服务方面的相对效率。
  • On appeal, the Court held that bundled discount constitutes an antitrust violation if the defendant sold the bundled products below their incremental or average variable cost
    在上诉中,法院认为, ,如果被告以低于其增量成本或平均可变成本的价格销售捆绑产品,则构成违反反垄断法的行为。
  • Price bundling is a sales technique under which 2 or more goods that could be sold separately are sold together at a single price
  • Generally, the price is less than the price of the goods when purchased separately, and the seller saves money due to lower transaction costs
  • As a result, bundled discounts are generally acceptable means of competition because it benefits consumers
  • However, if a bundled discount amounts to an exclusionary practice that reduces competition, then such a discount will be unlawful under antitrust law

- When does a bundled discount restrain competition?

  • Bundled discounts do not amount to exclusionary conduct unless the discounts reduce prices below some measure of the defendant's cost to produce the discounts

- The standard is account-attribution

  • Under this standard, the full amount of the bundled discount is measured against the 's incremental production cost, or the cost of producing one additional unit of each of the bundled products
    根据这一标准, 捆绑折扣的全额是根据 的增量生产成本(或生产每种捆绑产品的一个额外单位的成本)来衡量的。
  • If the bundled price is below the incremental cost, then the bundle may be exclusionary and anticompetitive
  • Account-attribution test:
  • (1) after allocating all discounts and rebates attributable to the entire bundle of product, the defendant sold the product below its incremental cost for the product at market/competitive price
    (1) 在分配了可归属于整捆产品的所有折扣和回扣后,被告以低于其增量成本的市场/竞争价格销售产品; (2) 在分配了可归属于整捆产品的所有折扣和回扣后,被告以低于其增量成本的市场/竞争价格销售产品。
  • (2) the defendant is likely to recoup these short-term losses
  • (3) the bundled discount or rebate program has had or is likely to have an adverse effect on competition
  • In sum, the test is whether a competitor at least as efficient as the defendant would be excluded from the market due to the defendant's bundle-discount pricing


  • Market definition: intel-compatible PC operating systems worldwide
  • Poof of Monopolization in violation of § :
  • Microsoft was trying to stamp out middleware - it would provide a platform for the operation of software using other operating systems to run on something other than Windows
    微软正试图消灭中间件--它将为使用其他操作系统的软件提供一个运行平台,使其能够在 Windows 以外的其他系统上运行
  • Dt. Ct. said that Microsoft integrated IE, and that can only be said as a way to kill development of Netscape
  • Ct. of App.:
  • To be condemned as exclusionary, a monopolist act must have an anticompetitive effect
  • must show the anticompetitive effect resulting from the monopolist's conduct
o i.e., antitrust injury
  • the dissatisfaction of consumers is not anticompetitive
  • if is successful in establishing a prima facie claim by showing exclusionary conduct and an anticompetitive effect, the monopolist can proffer a pro-competitive justification for its conduct
    如果 通过证明排他性行为和反竞争效果成功地确立了表面证据确凿的主张,垄断者可以为其行为提出有利于竞争的理由
  • ex: greater efficiency or enhanced consumer appeal, etc.
  • if monopolist pro-competitive justification stands unrebutted, then the must demonstrate that the anticompetitive harm of the conduct outweighs the pro-competitive benefit
    如果垄断者支持竞争的理由不成立,那么 必须证明该行为的反竞争损害大于支持竞争的利益
  • look at the EFFECT, not the INTENT
o intent is only relevant if it helps us understand the likely effect of the monopolist's conduct
  • it must harm the competitive process and thereby harm consumers - mere harm to competitors is not enough

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  • even an act of pure malice by one business competitor against another, without more, will not be enough to state a claim
  • The Commission and FTC cannot fine companies, all they can do is bring a claim and order to companies to comply with certain rules the Court decides
  • They can bring a criminal claim and send them to jail or fine them - but not in a civil suit
  • The public can bring civil suits against companies and show damages and get treble damages - once the court finds liability in the government case, all the private companies have to do is show damages and issue preclusion allows them to essentially piggyback off of the government's case
  • This makes finding liability more significant
  • There is still no answer on the breadth of section 5 of the FTC Act - however, it is believed this is better because finding liability under this does not allow private actions so there would be no issue preclusion piggybacking off of the government actions
    关于《联邦贸易委员会法》第 5 条的适用范围,目前还没有答案--不过,人们认为这样更好,因为根据该条款认定责任不允许私人诉讼,因此不会出现从政府诉讼捎带的问题排除情况
Vertical Restraints: Restraints in the Course of Buying and Selling

coercion here is between a retailer and manufacturer, not competitors!!!

Example: Resale Price Fixing Agreement
A manufacturer may require the retailer to promise to resell widgets at no more than , or a reseller may demand that the manufacturer impose a floor on its dealers' resale price. A more permanent example is corporate integration - a single firm may bring successive functions under one roof
制造商可以要求零售商承诺以不高于 的价格转售小部件,转售商也可以要求制造商对其经销商的转售价格设定 下限。一个更持久的例子是公司整合--一家公司可能会将相继的职能集中在一个屋檐下
These were most commonly looked at under § of Sherman Act and § of Clayton Act and if monopolistic, § of Sherman Act. Today, antitrust agencies advise that most vertical restraints are good for competition because each manufacturer tries to minimize its cost of distribution in order to gets its product to consumers at the lowest possible cost, given the price it sets for the first sale. Vertical restraints are particularly useful to protect a seller from free riding by discount dealers on their full-service competitors - however, this can also harm competition it is judged under rule of reason
最常见的是根据《谢尔曼法》( § )和《克莱顿法》( § )进行审查,如果是垄断性的,则根据《谢尔曼法》( § )进行审查。如今,反托拉斯机构建议,大多数纵向限制有利于竞争,因为每个制造商都试图最大限度地降低其分销成本,以便以尽可能低的成本向消费者提供产品,同时考虑到其为首次销售设定的价格。纵向限制尤其有助于保护销售商免受折扣经销商对其提供全面服务的竞争对手的 "搭便车 "行为之害--然而,这也会损害竞争

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Vertical restraints are in two categories:
  1. Restraints that limit the freedom of a party to the contract
a. Typically, restraints in the course of distributing a product that limit the price, customers or territories for reselling the product
b. These are called "intra-brand restraints"
  1. Restraints that foreclose outsiders
a. Typically, tying and exclusive dealing
b. These are called "inter-brand restraints"
Limitation of retail price depends on intra-brand competition and whether or not there is a direct substitute - inelastic price these are the markets that suffer the most from surplus prices
零售价格的限制取决于品牌内部的竞争以及是否存在直接替代品--价格缺乏弹性 这些市场受价格过剩的影响最大

Dr. Miles:

  • Dr. Miles made vertical price-fixing per se illegal
  • This case rejects the view that manufacturers can be told how much they have to sell a product for - once you sell the good, you have no control over the price anymore
  • Retailers know best, so they get to set their own price to consumers
  • Dr. Miles wants retailers to sell their product at a higher price, so they make more money off of the sales of their product and therefore push their product more to consumers
  • This case is overruled, and now vertical price fixing is viewed under the rule of reason

Colgate Doctrine:

  • There is no restriction on manufacturers and retailers deciding who they are going to engage in activity with
  • If there is a unilateral decision by manufacturers to deal with certain retailers only if they sell their product for and, if the retailer fails to do so, he has the right to refuse further dealings with him - conversely, if this decision is followed by a unilateral decision on behalf of the retailers to sell the product for at least , this is considered a unilateral agreement and not a contract
    如果制造商单方面决定只有在某些零售商以 的价格出售其产品时才与之交易,如果零售商没有这样做,则制造商有权拒绝与其进一步交易--反之,如果在作出这一决定后,零售商单方面决定至少以 的价格出售产品,则这被视为单方面协议,而不是合同。
  • Conduct does not create a contract here
  • In absence of any purpose to create or maintain a monopoly, the act does not restrict the recognized right of trader or manufacturer engaged in a private business to freely exercise his own independent discretion as to parties with whom to deal 41


  • Issue: standard of proof to find vertical price-fixing conspiracy under § 1 of Sherman Act
    - The jury found that the termination of Spray Rite was pursuant to a conspiracy between Monsanto and one or more of its distributors to set resale prices
    - 陪审团认定,孟山都公司与一家或多家分销商合谋确定转售价格,从而终止了喷礼公司的业务。

    - Concerted v. Independent Action:
    - Under Colgate, a manufacturer can announce its resale prices in advance and refuse to deal with those who fail to comply, and a distributor is free to acquiesce in the manufactures demand to avoid termination
    - 根据高露洁公司的规定,制造商可以事先公布其转售价格,并拒绝与不遵守价格者进行交易,而分销商则可以自由地默认制造商的要求,以避免被终止合同。

    - Concerted action to set prices v. Concerted action on non-price restrictions:
    - The former is Dr. Miles (now overruled)
    - The latter is judged under rule of reason
    - Non-price restrictions here:
    - Requiring special training of salesman so they were able to educate the public on herbicides, requiring the distributor to exploit fully the product in the geographic area, etc.
    - 要求对销售人员进行专门培训,使他们能够向公众宣传除草剂,要求经销商在该地区充分开发产品,等等。

    - Constant communication about price and marketing, alone, does not show concerted price-fixing
    - The fact that Monsantos imposed a costly set of non-price restrictions, and then offered monetary incentives to retailers that followed their pricing scheme does not, alone, suggest an agreement
    - 孟山都公司施加了一系列代价高昂的非价格限制,然后向遵循其定价方案的零售商提 供金钱奖励,但这一事实本身并不表明双方达成了协议。

    - Something more than price complaints is needed to show an agreement
    - There must be something more that is considered evidence that tends to exclude the possibility that the manufacturer and nonterminated distributors were acting independently
    - 必须有更多的被视为证据的东西倾向于排除制造商和非终端分销商独立行事的可能性

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  • Here, there was substantial direct evidence showing evidence of agreements to maintain prices
  • There was testimony from Monsanto district manager that price-cutting distributors were approached twice and told that if they did not maintain resale price, they would not have access to the new corn herbicide
  • When one distributor did not assent, this information was sent to reginal office and to their parent company the parent company told the subsidiary to comply and parent company told Monsantos they would comply
    当一家分销商不同意时,这一信息被发送到监管办公室及其母公司 ,母公司告诉子公司遵守规定,母公司告诉 Monsantos 他们会遵守规定。
  • This is evidence as to the meeting of the minds
  • There was additional evidence of a newsletter which outlined the rules of the game and said that those distributors that did not comply would be terminated
  • After the Court found an agreement - the question is whether Spray Rite was terminated in pursuant to that agreement?
  • The Court finds it is reasonable to assume so
  • There was testimony that in a meeting following the termination, the first thing mentioned was the complaints Monsantos received about Spray Rite prices
    有证据表明,在终止合同后的一次会议上,首先提到的是孟山都收到的关于 Spray Rite 价格的投诉
  • There was testimony that Monsanto never discussed with Spray Rite the distributorship criteria that were the alleged basis for the termination, prior to the termination
    有证据表明,在终止之前,孟山都公司从未与 Spray Rite 公司讨论过分销商资格的标准,而这些标准正是所称终止的依据。


Clayton Act § : No person engaged in commerce shall acquire where in any line of commerce, in any section of the country, the effect of such an acquisition may be to substantially lessen competition or tend to create a monopoly"
克莱顿法》 § :任何从事商业 的人不得收购 ,如果在该国任何地区的任何商业线中,这种收购的效果可能会大大削弱竞争或倾向于形成垄断"。
  • Clayton Act is designed to arrest mergers at a time when the trend to a lessening competition in a line of commerce is still in incipiency (Brown Shoe)
  • The Clayton Act only allows civil enforcement by government agencies, no criminal penalties

Brown Shoe: (Beginning of Modern Merger law)

  • After merger, the company would have of the entire shoe market
  • But Brown Shoe would only have of the physical market, i.e., retail store sales
  • SCOTUS said they violated the Clayton Act
  • The Court takes into account "submarket test factors"
  • Industry/public recognition of submarket as separate economic entity, product's peculiar characteristics and uses, unique production facilities, distinct customers, distinct prices, sensitivity of price changes, specialized vendors
  • The Court allowed the FTC/agencies to take pre-emptive steps to avoid antitrust violation
  • The Court said they are worried that other show manufactures will buy up smaller retail stores and hurt competition
  • Vertically integrated shoe manufacturers with retail stores, which are only going to push manufactures shoes
  • Strong national shoe chain can insulate themselves and keep their prices down because they will make money elsewhere since they are national - in the long run, this may hinder variety of shoe choice by keeping the smaller shoe sellers out of the market
  • It is clear here that the Court is protecting smaller retailers, even though we apparently do not protect competitors
  • Drobak said this case would not come out the same
Philly National Bank: (provides some modern merger law... Vertical Merger)
  • Proposed merger between the and largest banks in Philly
  • The Court looks at the market before and after the merger
  • At the time, they used CR2 to determine the market
  • The Court said change presents a threat of monopoly or oligopoly
  • Here, there is a market change over and over in market share, making the court suspect
  • Philly National Bank tries to say that the Bank is big, but it is small compared to NYC banks
  • Essentially, they try to argue that if the government wants more competition with NY banks, then they have to let other big city banks get big enough to compete with them
  • Court rejects this argument

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  • The Court is not going to weigh the gain in the NY market to the loss in the Philly market
  • Philly National Bank then tries to argue that Philly needs a bigger bank so that the companies do not have to turn to NY banks for big loans, etc.
  • The Court rejects this argument because it is a social justification and irrelevant
  • Drobak believes this merger would likely be allowed today

Proctor and Gamble: (conglomerate merger)

Today, conglomerate mergers are per se legal
  • Before Procter and Gamble take over Clorox, they own of the national market
  • After the merger with Clorox, nothing changes regarding the % of market owned by any companies
  • However, the Court still says the merger violate Clayton Act
  • The Court said the competition is through advertising this is a "barrier to entry"
  • Bleach is bleach - thus, it is fungible, and is harder for people to distinguish product
  • The existence of Purex (next largest company) was has capacity to make more bleach will require Clorox to keep prices down or consumers would switch - however, P&G had a huge marketing and advertising market
  • Consumer habits give some power over price - people will stay with Clorox based on consumer habits established through advertising
    消费者习惯对价格有一定影响--人们会根据通过广告建立起来的消费习惯继续使用 Clorox
  • Thus, this would potentially allow Clorox to slightly raise prices over Purex
  • P&G were into all kinds of products, but not bleach
  • By allowing P&G into the market by buying Clorox, the market is losing the opportunity for a third party to enter into the market that is not already in Bleach
  • This is industrial planning - should not be a part of antitrust
  • The Court did not include this in the opinion
  • The idea of advertising and one company controlling the advertising in many different product categories is an issue - the power of advertising is anticompetitive



CLAYTON ACT § 16 protects against threatened loss or damage by a violation of antitrust


§ intends to arrest the anticompetitive effects of their market power in their incipiency

  1. Standing:
a. To sue as a private party, you must have actual and economic injury
i. Plaintiff must allege more than threatened loss or damage that is merely casually linked to the defendant's anticompetitive behavior, the plaintiff must allege that the threatened injury reflects the anticompetitive effect either of the antitrust violation or of anticompetitive acts made possible by the violation
  1. Thus, even if a threatened injury is causally related to an antitrust violation, it will not qualify as antitrust injury unless it is attributable to an anticompetitive aspect of the practice under scrutiny
ii. Analysis of standing for private party: (must meet both to have standing)

1. these are only for standing under § of Clayton Act, which provides injunctive relief, not treble damages

  1. (1) does plaintiff's complaint allege a threatened injury in fact?
  2. (2) does the threatened injury result from an anticompetitive aspect of proposed conduct, i.e., that which would make the transaction illegal under antitrust law?
    (2) 拟议行为的反竞争方面,即根据反托拉斯法会使交易违法的方面,是否造成了威胁损害?
iii. Additional inquiries for a party seeking treble damages under § 4 of Clayton Act:
  1. Standing depends on the directness of the injury, whether the claim is speculative, the existence of more direct victims, the potential for duplicative recovery and complexity of apportioning damages

2. these are additionally requirements for §, which allows treble damages**

b. The government does not have to show injury to bring a claim
  1. Market definition: the narrower the market definition, the more likely the market will be concentrated. Concentrated markets make collusion easier.
a. HHI Numbers (Philly National Bank)
i. Calculating HHI gives us a better handle on likelihood of collusion/oligopoly

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  1. Square the market shares add up the squared market shares of the two corporations
  2. Determine the change in by taking the market shares of the two companies' merger and multiplying them together, then multiplying by 2
    将两家公司合并后的市场份额相乘,再乘以 2,即可得出 的变化。

ii. We look at post-merger ONLY**

iii. HHI below 1500
  1. Unconcentrated market, mergers not a problem
iv. HHI between 1500-2500
  1. Moderate concentration
  2. If there is an increase in HHI before/after merger more than 100 , there is a potential problem
a. Look at pro-competitive vs. anticompetitive effects
v. HHI over 2500
  1. Highly concentrated look at change in
  2. Change in HHI between 100-200 means potential problems
a. This does not mean that the merger is illegal, but must look at competitive vs. anticompetitive effects
  1. Change in over 200 is likely to enhance market power/produce an oligopoly
a. Highly suspect
b. FTC v. Staples
c. FTC v. Whole Foods
d. US v. HR Block

3. Horizontal Merger analysis:

a. In a horizontal merger case, after defining the market, the government must show that the merger will lead to improper market concentration in the relevant market.
i. The burden then shifts to the defendant to rebut this presumption
  1. the must show that the prima facie case inaccurately predicts that the merger will harm the competition or show other pro-competitive justification for the merger
a. post-merger efficiencies (Heinz)

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i. (a) must show actual efficiencies will outweigh the anticompetitive effects, beyond speculation
  1. Includes: better us of firm assets, higher quality products, or lower production costs that will lead to lower prices
  2. The burden is higher in highly concentrated markets
ii. (b) must show that the pro-competitive efficiencies cannot be achieved without the merger
b. Inaccurate prediction: (Baker Hughes)
i. Show stronger evidence of a different market definition, change in market conditions, barriers to entry/likelihood of entry, financial condition and conduct of companies in market, the nature of the product, market performance
ii. Low barriers to entry, sophisticated consumer market, stabilization of production and prices
c. Social justifications are irrelevant to mergers
i. Loss of jobs, for example, are considered an economic plus factor because the cost of labor will be reduced, and the price of product will be able to drop along with it
b. If there are no barriers to entry, there is likely no issue with the merger because it is so easy for other firms to come in, i.e., the concentration is irrelevant
i. Merger law is nothing more than attempting to predict what will happen in the market with the merger

4. Horizontal merger examples

a. Mergers likely to product coordinated effects
i. Hospital Corp. v. FTC (anticompetitive effect likelihood)
ii. US v. Baker Hughes (rebutting the prima facie case)
iii. FTC v. Heinz (post-merger efficiency justification)
iv. US v. Anthem (pro-competitive justifications must be merger-specific)
b. Mergers that may produce unilateral effects - monopoly and dominance
i. Sirius
ii. Google/AdMob

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iii. Boeing/McDonnell Douglas
c. Mergers that may produce unilateral effects-oligopolistic markets
i. US v. Oracle
ii. US v. HR Block (high HHI/Philly National Bank analysis)
iii. US v. Bazaarvoice Inc.
d. Mergers that may eliminate potential competition
i. US v. Marine Bancorporation, Inc.

5. Non-horizontal mergers:

a. Vertical merger
i. US v. AT&T
b. Conglomerate merger
i. GE/Honeywell

6. Mergers and Public Interest

  1. Pre-Merger Notice Requirement
a. Small mergers do not have to be precleared, but bigger ones do or they risk being sued by government

8. Enforcement

  1. International Dimensions of Merger Law


To enjoin a merger there must be a showing of sufficiently probable and imminent likelihood of substantially lessening competition in the market
Agencies seek to identify a credible story that the merger will impose anticompetitive harm on customers or sellers, and then assess the strength of the story. There are two anticompetitive scenarios, both depending on barriers to entry or expansion so that outsiders cannot easily and quickly enter the market: (1) coordinated effects; cartel-like or (2) unilateral effects: monopolistic or single-firm power.
监管机构试图确定一个可信的说法,即兼并将对客户或卖家造成反竞争损害,然后评估该说法的力度。有两种反竞争情况,都取决于进入或扩张的障碍,从而使外来者无法轻易、迅速地进入市场:(1) 协调效应;类似卡特尔;或 (2) 单边效应:垄断或单一企业势力。
How to predict the mergers likely effect?
  • traditional route: define the market, measure the market concentration and its increase as a result of the merger, and if the numbers are high enough explore further whether the market

    environment is conductive to coordinated or unilateral price-raising behavior. Harm to innovation is hard to predict, but the Court primarily focuses on increase in prices.
(1) Market Definition: focuses solely on demand substitution factors i.e., on a consumer's willingness and ability to substitute away from one product to another in response to a price increase or a corresponding non-price change such as a reduction in product quality or service
(1) 市场定义:只关注需求替代因素,即消费者因价格上涨或相应的非价格变化(如产品质量或服务下降)而从一种产品转向另一种产品的意愿和能力。

- Product market definition

  • Hypothetical monopolist test
  • Hypothesize a market, assume a single monopolist raises the price what is likely to happen as a result?
  • Will critical mass buyers shift to another alternative so that the monopolist could not profitably hold the price increase?
  • If so, include that next alternative in the market and proceed again with SSNIP (small but significant and non-transitory increase in price) until the hypothetical price increase is profitable and there is your market (include product and geographic markets)
    如果是,则将下一个备选方案纳入市场,并再次进行 SSNIP(小幅但显著且非过渡性的提价),直到假设提价有利可图,并形成市场(包括产品和地域市场)。
  • Also consider:
  • Benchmark prices SSNIP Size
  • Product market definition with targeted consumers
  • Geographic market definition
  • Locations of suppliers
  • Location of buyers
(2) market participants, market shares, market concentration
  • List the market participants and the shares of each and measure the concentration
  • The Court may not determine at all if it is a single firm/unilateral effect story
  • If this is the case, the agency is likely to estimate a diversion ratio - or the diversion of sales in the event of higher prices within the monopoly
  • The value of sales diverted to the monopoly/merger indicates the release of pressure on the company as a result of the disappearance of competition
(3) Unilateral Effects of Merger:
  • Pricing of differentiated products

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  • Bargaining
  • Capacity and output
  • Innovation and product variety
(4) Coordinated Effects of Merger
  • Impact of merger on coordinated interaction
  • Evidence a market is vulnerable to coordinated conduct
(5) Entry
  • Under any theory, if, in the event of a price increase, entry can be expected to remain timely, likely and sufficient to fully counter a price rise, the merger is unlikely to be anticompetitive
  • Moreover, agencies will not challenge a merger if cognizable efficiencies are of a character and magnitude such that merger is not likely to be anticompetitive in any relevant market
  • Timeliness
  • Likelihood
  • Sufficiency
(6) Efficiencies
(7) Types of Adverse Competitive Effects
  • Types of Evidence
  • Actual effects observed in consummated mergers
  • Direct comparisons based on experience
  • Market shares and concentration in relevant market
  • Substantial head-to-head competition
  • Disruptive role of a merging party
  • Sources of evidence
  • Merging parties
  • Customers
  • Other industry participants

Analysis: Vertical Merger Injunction

  • (1) show prima facie case by identifying the relevant market and show that the merger will impede competition in that market (must be SPECIFIC)
    (1) 通过确定相关市场,证明表面证据确凿,并证明兼并将阻碍该市场的竞争(必须具体说明)

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  • A vertical merger may impede competition by giving the merges company control of a competitively significant supplier and withholding supply unless competitors pay higher prices
  • (2) after showing a prima facie case, the burden shifts to to show that the predictions are wrong or procompetitive justifications
    (2) 在证明表面证据确凿后, ,以证明预测是错误的或有利于竞争的理由。
  • Efficiency justifications: Every vertical merger eliminates double marginalization by eliminating one profit
  • (3) if the burden returns to the government, they must produce additional evidence and this merges with its substantial burden of persuasion
    (3) 如果政府重新承担责任,他们必须提供更多证据,这与政府的实质性说服责任相合并

Citizen's Publishing: (Horizontal Merger)

  • Failing Company Doctrine
  • This still exists, but is so rare and difficult to use that it is impractical
  • It allows a company to take over a failing company to save it
  • Bankruptcy is a viable way to save a failing company without merger

General Dynamics:

  • This was the movement to modern merger law
  • A coal company took over another coal company - production and annual sales made it look anticompetitive, but if you look at the contracts, you see that the company being taken over was not a competitor in the market
  • The whole company consisted of long-term contracts with companies to sell the coal in the reserves
  • Thus, they had 0 capacity to compete because they were in contracts to sell every last lump of coal
  • It is important to look at annual sales, production, and capacity
  • The court here look at capacity and there was 0 capacity, thus, they were not competition
  • do not only look at numbers**


FTC v. Staples:

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  • The Court considers the market to only be office supply stores, so the merger is 10,000 with a change of 600
  • Merger is obviously not allowed here
  • Evidence of market definition:
  • FTC found that where Staples did not compete with other office supply stores their prices were well over higher and sometimes up to higher than in areas where it did compete with office supply stores
    联邦贸易委员会发现,在 Staples 没有与其他办公用品商店竞争的地区,其价格远远高于 ,有时甚至高达
  • this is significant if the prices are different in markets where they are in direct competition geographically than markets where they are not in competition, this shows they are directly competing with each other, rather than competing within the broader market
    这一点意义重大 ,如果在地理位置上直接竞争的市场与没有竞争的市场的价格不同,这表明它们是在直接竞争,而不是在更广阔的市场内竞争
  • The Court also found low cross-elasticity between superstores and non-superstore retailers, and found that superstores (office supply stores) had unique characteristics
  • The Court found a submarket in consumable office supplies sold throughout the supply superstores
  • Drobak thinks the opinion is evidence of competition of Office Depot and Staples in certain markets
  • 15 years later the Court allowed Office Depot and Office Max (#2and #3) to merger

Whole Foods Market:

  • Whole Foods Market wanted to buy out Wild Oats Market
  • Market
  • Whole Foods and Wild Oats were the only two premium natural and organic food markets nation-wide
  • The district court found that Whole Foods and Wild Oats competed with other supermarkets and did not uniquely compete with each other appeals court disagreed
    地方法院认为,Whole Foods 和 Wild Oats 与其他超市存在竞争,并不存在独特的竞争关系 上诉法院不同意这一观点
  • The court looks at markets where the two compete with each other - are the prices different than markets where the two stores are not in competition?

US v. HR Block:

  • Potential market for tax return companies
  • Pencil and paper filing
  • Computer assisted filing
  • Accountant filing
  • Are they substitute products?
  • Not really - computer assisted would have to raise their price significantly to get the consumers to go to pen and paper filing
  • Drobak believes that capacity to grow should be taken into account - the fact that they can compete with each other and distribute more software should be relevant
    Drobak 认为,应考虑到发展能力--它们可以相互竞争并分发更多软件的事实应与此相关
  • The Court considers business documents from HR Block, testimony of witnesses, and analysis from economist
  • Despite some efforts of do-it-yourself efforts to capture tax store customers, none of the major competitors set their prices based on consideration of assisted pricing
    尽管一些 "自己动手 "的企业努力争取税务商店的客户,但没有一个主要竞争者在制定价格时考虑到辅助定价的因素。
  • Pen and paper are not a part of the market because the Court does not believe a sufficient number of consumers would switch to pen and paper in response to a small, but significant increase in DDIY prices
    纸笔不属于市场的一部分,因为法院不相信有足够数量的消费者会因为 DDIY 价格的小幅但大幅上涨而改用纸笔。
  • The expert also notes that the market for tax purposes is inelastic and there are no alternatives
  • The court says the tools of antitrust analysis cease because it is selfevidence that a monopolist of all forms of tax prep could impose a small, but significant price increase and not lose market share
  • In that situation, HR Block could demand any price since taxpayers have no other choice


Mergers likely to produce coordinated effects.

Coordinated effects the merger will produce a change in market structure or environment that will probably lead to firms behaving less rival or more cartel-like
协调效应 合并将导致市场结构或环境发生变化,从而可能使企业的竞争行为减少或更像卡特尔行为

Hospital Corp. of America:

  • Because of the contracts in the city, the hospital market is shrinking from 11 to 7 in the Chattanooga area

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  • The 4 largest hospitals own of the market
  • The fear is that consumers cannot really choose between hospitals and the hospitals could ban together against insurance providers, etc.
  • Healthcare is an unusual market - consumers cannot shop around based on price; consumers do not feel it until the back end when they get the bill
  • On the other hand, insurance companies do care about price significantly
  • Posner saw it both ways because insurance companies have the power to negotiate with the hospitals efficiently
  • However, it could alter what premium they are going to charge in the aera or what coverage they are going to offer
  • They may pass the cost on to the insured, we do not know
  • There is another concern about wasteful investment, difficulty expanding, concerted action
  • Technology has led to consolidation and FTC is careful with these cases because of fear of oligopoly in healthcare markets
  • The commission offered various evidence to show the probability of anticompetitive effects
  • (1) pointed out that the demand for hospital serves by patients and their doctors is highly inelastic
  • The less elastic the demand for a good is, the greater the profits that providers can make by raising price through collusion
(2) there is documented cooperation between hospitals
  • A market in which competitors are disposed to cooperate is a market prone to collusion
  • Contracts between hospital affiliates and two other hospitals gave it control over pricing for two of its competitors for some time
(3) hospitals are under great pressure from the government and insurance companies to cut costs
  • One way of resisting this pressure is by presenting a united front in negotiations with the third-party payors
  • Thus, the Court found risk of higher prices (higher prices do not have to actually result for there to be violation)
Baker Hughes: (rebutting prima facie case)

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  • Rule of law: to rebut a prima facie case of the anticompetitive effect of a horizontal merger, the must show that the prima facie case inaccurately predicts that the merger will harm the competition
    法律规则:要推翻横向兼并反竞争影响的表面证据, ,必须证明表面证据不准确地预测了兼并将损害竞争。
  • The Court held that although the government presented prima facie evidence showing anticompetitive effects of the merger, Secoma had rebutted this presumption
  • Reasons the merger is OK:
  • Few barriers to entry
  • 2 competitors entered the market in 1989
  • Secoma presented evidence that the market in the US was very small and high concentration was normal
  • Despite the high concentration, prices and product were stable
  • Sophisticated market
  • The buyers were huge oil companies, who are sophisticated and carefully examine the devices before spending hundreds of thousands of dollars on them
  • The market is huge oil companies - they are not easily manipulated, they are aware of reasonable prices, etc.
  • Since the government did not present any other evidence after Secoma's rebuttal, the decision is affirmed

FTC v. Heinz. (post-merger efficiency)

  • Rule of law: 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
  • Section 7 of Clayton Act prohibits mergers that will substantially lessen competition by significantly increasing market concentration producing a firm with monopoly power
    克莱顿法》第 7 条禁止通过大幅提高市场集中度,使具有垄断实力的公司产生,从而大幅削弱竞争的兼并行为。
  • Many courts recognize the availability of post-merger efficiencies as a defense to section 7 claims

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  • The basic theory is that a merger should not be prohibited if the resulting efficiencies create pro-competitive market effects that outweigh the anticompetitive effects
  • Recognized efficiencies:
  • Better use of firm assets
  • Higher quality products
  • Lower production costs that lead to lower prices for consumers
  • However, any alleged efficiencies must be weighed against a merger's anticompetitive effects
  • Therefore, 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, meaning the pro-competitive benefits could be achieved without loss of competition
  • Here, Heinz claims that the merger will allow it to more efficiently use an underutilized plant, reducing production costs + it will help the competitor because the current plant they are using is outdated and inefficient
    在这里,亨氏声称,合并将使其能够更有效地利用利用率不高的工厂,降低生产成本 + 这将有助于竞争对手,因为他们目前使用的工厂已经过时,效率低下
  • Heinz also claims the post-merger products will increase quality because sharing baby-food recipes
  • The Court said Heinz failed to support either justification with data regarding production efficiencies of the combined companies + they failed to show that the claimed efficiencies could not be achieved without the merger
    法院称,亨氏未能提供有关合并后公司生产效率的数据来支持这两个理由 + 他们未能证明所声称的效率在没有合并的情况下无法实现
  • Therefore, the evidence of the potential cost reduction was merely speculative, and the Court would not accept speculation as a pro-competitive justification

US v. Anthem: (merger-specific justification)

  • Rule: a healthcare provider seeking to merger with another provider cannot overcome a change of anti-competitiveness if the provider does not demonstrate that the merger would create efficiencies that would overcome the anticompetitive effects of the merger
  • Anthem argues that the anticompetitive efficiencies created by the merger would yield a superior Cigna product at Anthem's lower rates
    Anthem 辩称,合并带来的反竞争效率将使 Cigna 以更低的费率提供更优质的产品
  • Anthem's experts presented evidence showing that the merger would create substantial savings
  • The Court found that Anthem failed to demonstrate that its plan was achievable and there the merger would benefit consumers
  • Moreover, the efficiencies shown were not merger-specific aka they were not specific to Anthem product
  • Because the efficiency cannot be achieved by either company alone, the merger's benefits could not be achieved without the loss of a competitor - in this case, Anthem has not shown that the merger will achieve the extraordinary efficiencies necessary to overcome the effects thus, Anthem's purported efficiencies are farfetched and speculative
    由于任何一家公司都无法单独实现这种效率,因此,如果不失去一个竞争者,合并的好处就无法实现----在本案中,安泰公司没有证明合并将实现克服影响所必需的非凡效率 ,因此,安泰公司所谓的效率是牵强附会和投机性的。


  • Look for evidence establishing that the merger will substantially reduce competition

Sirius XM Merger:

  • The Court said there is no evidence establishing that combination of satellite radio providers would substantially reduce competition based on:
  • The likely future competition between Sirius and XM Radio
  • The effect on competition in the retail channel
  • Likely efficiency
  • Effect of technological change
  • The Court said they can compete after the long-term exclusivity contracts (5-years)
  • There is competition at the whole sale level
  • What competes with satellite radio?
  • FM, Phone, Tape Cassette, CD
  • All of these are part of the market
  • Thus, we are not talking about merger to monopoly because these are other forms of radio competition
  • Is this competition enough to keep price down?

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  • Yes, because the market for new customers is bigger so there is no worry about monopoly because other sources of audio will put pressure on the price
  • The decision cannot be made on one subgroup of customers we have to aggregate competition
  • Ex: Sirius had baseball and XM had Howard Stern
  • You cannot make the decision off of the baseball or Howard Stern lovers, you have to aggregate the consumer base which overlooks those submarkets
    您不能根据棒球或霍华德-斯特恩(Howard Stern)爱好者的情况来做决定,您必须将忽略这些细分市场的消费者群体汇总起来
  • The market is anyone listening to audio in cars
  • The court said XM and Sirius are not the only competitors/will not create monopoly through merger
Google/AdMob (head-to-head competitors)
  • Google proposed acquiring AdMob, the largest advertising network
  • FTC opposed to the deal because they feared the merger would remove one of the only 3 important players in the market, but FTC later cleared the transaction
  • Both Google and AdMob produced the most revenue in the mobile advertising markets and both are particularly strong in different segments of the market (ad networks)
    谷歌和 AdMob 都在移动广告市场创造了最多的收入,而且都在不同的细分市场(广告网络)表现尤为突出
  • The investigation showed that each of the merging parties viewed the other as its primary competitor and that each firm made business decisions in direct response to this competitive threat
  • However, during the investigation, Apple acquired the third largest mobile Ad Network, and the FTC had reason to believe they would quickly become a strong advertising network competitor
  • Thus, there became no reason to believe that the competition would significantly lessen in light of further market development (i.e., Apple entering the market)
  • Remember, big is not bad - what is bad is monopoly pricing
  • Is there incentive to not engage in monopoly pricing?
  • Yes, now there is because Apple has moved into the market

Boeing/McDonnel/ Doug/as:

  • Boeing was the largest manufacturer of the commercial jet aircraft ( of world market), McDonnell Douglas had of market, and Airbus Industrie had of the market
    波音公司是最大的商用喷气式飞机制造商(占世界市场的 ),麦道公司占市场的 ,空中客车工业公司占市场的

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  • Boeing and McDonnell were the only 2 US companies that had no assets in Europe, although they made sales there
  • McDonnell failed to invest in commercial airline developments and was facing financial issues as a result
  • Boeing, on the other hand, recently entered into a 20-year exclusivity deal with Delta, American, and Continental, consisting of of the world's aircraft sales
    另一方面,波音公司最近与达美航空公司、美国航空公司和美国大陆航空公司签订了为期 20 年的独家经营协议,占全球飞机销售量的
  • Boeing and McDonnell merging would not lessen competition in either defense or commercial aircraft market because McDonnell currently did not have the capability to compete with the other plan producers and McDonnell aircrafts did not have the same features as Boeing
  • Moreover, McDonnell could not generate valuable efficiencies in the interchangeable spare part and pilot training, which limited their sales with airlines who bought either Airbus or Boeing
  • Boeing's entire purpose for acquiring McDonnell Douglas was not for commercial industry, it was for the defense industry
  • Boeing was already going to get McDonnell's share of the commercial industry because they were going bankrupt/leaving the commercial industry anyways
  • As a result, Boeing agreed to terminate the exclusivity agreements with Delta, American, and Continental until a later date amongst other pro-competitive terms because EU was strongly against the merger
ANTI-COMPETITIVE UNILATERAL EFFECTS: two firms that are close substitutes one firm buys the other and keeps the product/substitute the same name but can raise prices and the customers are diverted to the substitute, but they own the substitute, so they are getting the above cost price
反竞争单项效应:两家公司是近似替代品 一家公司收购另一家公司,并保持产品/替代品的名称不变,但可以提高价格,客户被转移到替代品上,但他们拥有替代品,因此可以获得高于成本的价格。

Ex: Coke/Pepsi:

If Coke buys Pepsi and keeps the Pepsi name, then they could raise the Coke prices to above cost and customers will be diverted to Pepsi, but they are still getting those customers because they own Pepsi too

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If one takes over the other, they have captive customers/customers flipping between the two and it leads to unilateral effects between the two close substitutes
This is an issue when you have products that are close substitutes to each other
Possible Defenses to Unilateral Effects:
Efficiency for efficiency to be cognizable, it must be substantial and verifiable Potential entrants
Orcale: (unilateral effects)
  • Product Market Definition
  • The did not meet their burden showing that the relevant market is limited to highfunctioning FMS and HRM
  • The evidence presented did not show any evidence of excluding mid-market vendors, outsourcing or best of breed solutions from any product market
  • The show no evidence of coordinated effects
  • Plaintiffs argue against homogenous, making this difficult to show
  • Also, there is no price transparency in the market - prices are only known to vendor and customers
  • Plaintiffs show no unilateral effects
  • Efficiencies (defense)
  • For efficiency to be cognizable, it must be substantiated and verifiable
  • The court finds that the claim of cost savings is flawed and unverified - they are too speculative
  • Because the plaintiffs have failed to meet the burden of proving relevant product market and geographic market, plaintiffs are not entitled to a presumption of illegality under the law

HR Block:

  • Court found both coordinated and unilateral effects were probable based on HHI
  • did not rebut the presumption
  • Reputation and strong brand names were barriers to