Condensed Outline Antitrust I SECTION I A. Horizontal Restraints: 1. Per Se b. Traditionally price fixing & market divisions c.

. Reasonable/fair price fixed no defense Trenton Properties; Runious competition no defense Socony-Vacuum d. Agreement to affect supply or output that has purpose & effect of raising, depressing, fixing, pegging, or stabilizing price illegal per se Socony-Vacuum. e. Agreement setting either max or min price per se unlawful. f. Trade assoc per se violation to exchange daily current info b/c has effect of stabilizing price Amer Column g. Eliminating price as consideration unlawful per se Prof Engineers. h. Eliminating credit terms unlawful per se b/c credit terms directly impact price Catalano v. Target. i. Per se price fixing of medical fees b/c raised ins premiums Ariz v. Maricopa Co. Med Society. j. Horizontal market divisions that restrain trade, competition, or output k. Horizontal market divided by territory. 2. Rule of Reason a. Conduct even price fix enhances or facilitates competition; agreement arguably has purpose & effect of making market more competitive or efficient, so that effect on price merely ancillary Chicago Bd of Trade, Appalachian Coals, NCAA v. Bd of Regents b. Rule necessary for trade Chicago Bd, ASCAP c. Trade assoc that exchanges info on past transactions & does not result in agreement to fix price Maple Floor; Trade assoc exchanges info in oligopolist market Container Corp, & Gyps um d. Nonexclusive agreement ASCAP e. Output-restricting agreement anticompetitive under ROR b/c limits freedom to negotiate & enter Ks NCAA v. Bd of Regents f. Horizontal market divided by products

3. Quick-look analysis application disapproved in FTC v. Calif Dental Assoc.

B. Summary of Boycotts

1.
a. b. c.

Per Se (public injury presumed): D has market power or exclusive access to essential facility to effect competition Restraint aimed at competitor w/ no efficiencies shown Naked Restraint no market power required b/c so obvious

2.
a. b. c. d.

ROR (must show evidence of public injury): Target is customer rather than competitor Economic impact not immediately obvious Market definition not necessary if actual adverse effects to market shown When inquiring into market power, looking at how restraint affects market.

C. Vertical Agreements 1. Resale Price Maintenance a. Minimum Price illegal per se; Oklahoma Unfair Sales Act b. Consignment K illegal per se; true consignment OK c. Unilateral Refusal to Deal suggested price; Colgate doctrine

d. Max Price ROR

e. Dealer Termination (1) Prove 2 things for per se: (a) agreement proven w/ evidence that tends to exclude chance of independent action (b) as to price proven w/ evidence that there is no plausible purpose for which non-price reasons used to terminate. (2) Apply ROR where agreement not as to price Exclusive Dealing Exclusive Dealer eliminate all but one supplier in market ROR Interbrand Foreclosures cannot sell to competitors ROR Requirements Ks (evaluate under Sherman Act & Clayton Act) ROR: (1) define market; (2) determine foreclosure of market (D must foreclose substantial share of market). Tying Arrangements P must prove for per se: 2 separate products (coherent basis for distinguishing; factors considered: (1) physical characteristics; (2) business justification; (3) end-usage; (4) whether tie is essential reason for products success; (5) industry trade practice; (6) are products ever sold separately. Tying product has sufficient economic power (power to raise prices or require purchasers to accept burdensome terms that could not be exacted in competitive market) Tied product arrangement causes not insubstantial affect on commerce in tied product.

2.

a. b. c.

3.
a.

b. c.

SECTION II MONOPOLIZATION A. Three Offenses: 1. Monopolization 50%+ market share; Intent to engage in certain conduct (not intent to monopolize) 2. Attempt to Monopolize 30-50% market share; Specific intent to monopolize 3. Conspiracy to Monopolize

B.
C.

Definition of Monopoly Power power to control price or exclude competition (In 10th Cir, power to control price and exclude competition)

1.
industrial)

Three Tests: Classic Test Monopoly Power + 1 violation (not honestly Intermediate Test Monopoly Power + exclusionary conduct Most Hostile Test Monopoly Power alone Defenses: Natural Monopoly thrust upon Superior Skill, Foresight, & Industry

2.
(todays test)

3. D. 1.
2. E.

Market Power Test for Monopolization (a) Large market power; (b) engaged in exclusionary conduct 2. Determining Market Share: a. Identify product b. Determine relevant geographic market

1.

c. 3. a. b. c.

Compute Ds output of relevant product in relevant market, divided by total output of relevant product in market Market Power function of: Ds market share Elasticity of demand (substitutable/fungible) Cross-Elasticity of Supply (suppliers in market today & those who could reasonably enter in future)

F.

Test for Exclusionary Conduct though honestly industrial, not economically avoidable.

G.
1. 2. 3.

Requirements for Barrier to Entry: Initial Cost Risk Sunk Cost

H.

No duty to deal Essential Facilities Doctrine: (a) facility essential to Ps business survival in particular market; (b) facility cannot be practically duplicated; (c) P can use facility w/o interfering w/ Ds use.

I.

Distinction b/w refusing to deal initially & terminating existing agreement in competitive market. A. 1. 2. 3. 4. 5. 6. 7. Submarket factors: industry or public recognition of submarket; products in submarket have peculiar characteristics unique production facilities for submarket product distinct customers distinct prices sensitivity to price change specialized venders in submarket