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1 per se cases- no inquiy needed , no need to show market power, BUT if only a anciallry retraint that leads to bigger

procompetitveness then no problem (TOPCO would probably not be decided same otday) ECEPTION (sometimes)- professional gorups 1)Horizontal price fixing Exception- BMI- create new product wnhere the price fixing is the new prodcut Doesnt look like price fxing but is -Catalano- giving credit is one aspect of price so thi sis price fixingn 2)Horizontal Market allocations Palmer Exception Anccilary restraints- where overall it is pro-comepitive but minisucle part is anticompeiutitve. Ex. Covenant not to compete like in sale of business where one person doesnt value it anymore but no one will buy if think going ot set up another one across the steet. Test- 1) the restraint must be reoansably related to the beneficial agreement and reasonably necersayr for its prposes so not unreasonably restrictive of comepittion. Makes it ROR

3)Horizontal refusals to deal- boycotts Assoc gen contreactors of calif v Exception- northwest retailers- per se applies to joint efforts by a firm or firms to disadbvatage comeoptitors by either direcyly denying or pursuadning or coercing suppliers or customers to deny rletaionship the comepittors PER SE IF cut offmarket, facility or supply and tend to raide price restrict outpout or divide terirotries.. Here there was a agency rule that happened to exclude one member- can tmake this per se 1 Quick Look- must hsow some likely anti comeptitve effect need not make full demonstration of market power 1)where an observer with even a rudimentary understanding of economics could conclude that the arrangements in question would have an anti-competitive effect on customers and markets a. agreements that would be per se illegal exept that some extenuating circumstances causes the court to lack confidence that the practice is invariably harmful b. agreements to limit advertising particularly where it relates to advertising prcies

c. agreements not to negotiate price or to limit the circumstances under which price would be negotiatedprofessional engineers but probably didnt want to hold ot same rule because it was a professional association and required more analysis again held this in FTV v Indinana dentist d. agreements to refrain from doing something rational competitors would do under free competition, even if that thing does nto directly rrelate to price or output use quick lok where some restraint neccesayr to nxistence of prodcutNCAA and would have been found illegal even if had no marke tpower use quick look where nto an explicit horixontal agreement on price or output but it relates to the output of something that is not the relvent output for anti trustcalifornia dental Analysis- 1) Pp CAN ME A PRIMA FACIE CASE BY SHOWING RESTRAINT IS Inherently suspect then a presumption arises that the restrain is anti comepteitive (look above) 2) burden shifts to the D to put forward some plausible, legally cognizable theoretical justification for the resteaint 3) the P can then show that the justification is inadequate and that the reatraint will ikelyharm consumers either as a matter theory or on such evidence as is needed to show that harm is likely. If P succeeds then the D mustr put on a full evidentiary showing to prove that is justification is adequate(must be plausible) 4)if P fials to show initial justification is inadequate then case becomes full blow ROR. To proceed P will have to rpove market power in relvent market or put on direct evidence of actual anti-compeittive effects.

3) Tying has own test- per se but not really P must show 1) there were tewo different products Look at demand- jefferosn parish,- separate product if could profitably be marketed speerately- found seperat eproduct 2) P was required to buy both to get one it wanted 3) D had some power in the tying product market and Market power- must be shown the ability of a single seler to raise price and restrict output can be inferred by market sahre 4) the arrangement affecred a substantial amount of commerce if mer

5) D may attmet to rebut with business justification Mnost common is it is necessary to preserve the quality of the brand of seller product ex. Like photocopier tying to toner if can show 3rd party toner runis machine or performs shitty.

4) everything else is full rule of reason- P must show 1) that the conduct could cause price to go up or output down, (so whether restraint sunreaosnable) assuming defendants have market power AND 2)either that Ds have market power or direct proof of anti-competiive effect (this is for 1 below) Chicago- question is whether promotes trade or tends to dettory it 1) P roves that an agreeemtn has had or is likely to have substantially adverse effect on competition (maybe have to show market paower but also that restraint couild in fact csue an increase in price or decrease in putput 2) if P meets D demonstrate sproomceititve efext 3) if D proves P musr show challenged conduct is not is nto reao dnably necessary to achieve thr stated obejctiove or antoi competitive out weigh pro comepittive

5) Exchange of information Anerican column Another approach is look at structure of market- if inelastic demand and fungible product that would facilitate interdependent behavior HORIZONTAL ENDS HERS 6) Vertical Restriants- all under ROR except one exception if in tying if P can show D held marke tpwoer in tying market product a rebuttable preusmptikn arise that it caused anti comepittive effects Leegin simplified many rules into 1 Colgate- manufacuter is free to announce terms on which willing to sell products and free to stop oding business with any distributor even if reason for doing so is refual to comply with suggested retail prices- Defense US v GE- angency relaitonsips ok where there is no parting of title but merely giving product on sonsignment basis that sell and igve proceeds back PER SE LEGAL Sylvania- restraint that permitted sellers only within specified georpgrahic area- interbrand comeptitiotn is now the most form of competition- realsisties must dominate the judgement and at law must be based on dmeonstrabel economic effect rather than formalistic line drawing. Limits c Intrabrand comepittoin might have benefits such as compete more effectively and elinate free rider so incentivize them ` Leegin- put min RPM under ROR now Min and mAx are both under ROR. Verticle restraints could lead to P would after this case try and argue horizontal agreement- close cases that have both vertical and horizontal is hub and spoike toys r us held it to be per se illegal under horizontal boycott

Vertical price retraints are more scrutinized than non rpice restraint htough same analysis under 1 as listed above in ROR

7) exclusive delaing- ROR Would only find problem with isignificant market power and due sensitivity to speicifc marke tocnidtions and may be subehjct to new product such as BMIStnadard oil- illegal wehre foreclose some substantial percentage of distribution in a givne market here held foreclosure of 6.7% illegal Tampa- basically overruled standard limited analysis to more full ROR where must weight probobable effect of contract on the relevant area of effectice competition, taking into account the relative strength of the parties, the proportionate volume of commerce invloced in relation to total volume of commerce in the relevant market area, and the probable immediate and future effects which pre-emption of that share of the market might have on effective competition therein Therefore large percentage of foreclosure is nto enugh unless can show would likely impede entry or expanmsion by exisitning competitors Clear now that challenged contracts cover 30 percent or more of market 8) bundling NOTE bundling tying and exclusive delaing can be challenged under 1 maybe 2 and clayton 3therse three treated more harshly than other vertical restraints which are ROR 3- applies only to persons engaged in commerce in tow or more states, applies only to goods not services that, prohivits arrnagehmetns that may be to substaintially lessen competition or tend to create a monopoly in any line of commercd

Prooft of conspiracy under 1Copperweld- corporation cannot compsire with wholly onwed subsidiary to be against a 1 coinspiracy claim b/c have same economic incentive and forces them to be as efficient as can. Raises quesiotns as to what percent owner coutnds. Held that just has to own some majority of other corp. Dagher- not per se price fixing although JV but selling two brands but at one price. Where integrated JV that is not a sham and core activity is intenral price deicisaons then per se does not apply Townbly, matushita, monsato- new standard proof of conspiracy through circumstnacial evidence- in every 1 case in which P seeks to prov conspiracy without direct evidence, the trial court

must perform an analysis to detemirne whether the conduct alleged to have occurred would be economically rational Mansanto- correct standard is there must be evidence that tends to exclude possibility of indnepdent action by alleged conspirator, ther emsu tbe direct or circumstantial evidence that reasonably tends to rpove that they had a conscious commitment to a common scheme designed to achieve an unlaweful objective Matsuhsita- ECONOMCI SENSE TESTmakes clear that circumstnaital proof that reoansably shows such common scheme depends on economic rationality- held no eocncomic raiotnal because very risky This can apply at pleadings, SSJ and DV stage. At pleading twomblywhether intial allegations taken as true are sufficient to state a claim on which relief can be granted. Plausibioity requires the pleading of enough factual matter to suggest than an agreement was made Matsuhsita and mansanto apply towmbly at SJ

Oligopolist theory (dominated by few firms)- more beneficial for all to raise procies together bu twihtout agreement no 1 violation and w/o monopoloy no 2 violation Mor elikely will do if conctrated, easily detect cheating like fungible product frequent sales to many seller and inelastic demand, in highly ocmpeiitve market yet prices going iup npot down together might prove ocmpiracy Circumstantial evidenc eot prove ocnspircy (plus factors becuas emere parallel conduct is not enough Strongest factor is economic irrationalistyamerican tobacco since great depression would expect to compete an dprice ot go down byut rainsing together

Same test wehter horizontal or vertical conspiracy jus tmor elenient for vertical Monopoly 2 Monoploizaiton Alcoa (but good for market power defintiionand united show old law. P must prove 1)possession of market power in relevant market Alcoa

Mus tusually show At least 50-60 plus monploist enjoys some protection form entry barriers or other ocnidtions tha tpemrit D to raise price or reduce output

2)willful acquisition or maintencne of that power and distinguished from growth or development as result of superior product or else D excluded others form would have been a competitive entry Aspen- eclusion requires osme showeing of profit sacrifice and that irraitional in absence of a exclusionary goal- sufficient If exclue rivals on anything but efificny it is predatory l Lepages different rule that selling above cost cannot violate 2 Different categories1) exclusionary pricing- setting prices so that try and freexzr out compeitors Predatory pricng/buying/dicoutn programs/monopolist sells to privals at very high cost but then competes 3)exlcusoianry refusal to cooperate mANY types intent can be factor but not sufficient or necessary to porve (to show pla is to harm rivals-ALCOA/Microsoft/BROOKE 3) Such conterveiling benefits that flow form anti-comeptitve conduct are outweighed by anti comeittive harms. D can prove leigitmate business justification Not sufficient ot advance social jusitifcaitons

Monoply Price predation/exclusionary pricing Leading case Brooke group- no doubt that the market at points had achieved supra compeittiv epricing through oligopoly or collusion. No liability becaue no showing B and W had poewer to raise price above supra comeptitiv elevel tow part test: 1) P must show that prices complained of are below an appropriate measure of its rivals costs 2) competitor had dangerous probability of recouping

ienvestment-reaosnable expectaiotn of monopoly profits later (appropriate measure has nto been defined) in theory its its own marginal cost But dont want to piunish lwo prices too easily because thats competition, competition on prices, Also has to be able keep out new entrants

Monoply- Exclusioanry refusal to deal Violation of 2 when refusal to deal with customers or suppliers that frequent rivals or refuse to do wbusiness with competitors Difficult because runs up against the COLGATE rule that can choose who to do business with Apsen- P must hsow conduct would be economically irrational in absence of anticompeititve intent- THIS IS RULE but maybe changed by TRINKO that need to have been in preivous relaitonsip Monoply- refusals to liscence intellectual property- per se legal exception ITS v Eastman Kodak IP owner merely enjoys a presumptive right to refuse to deal Microsoft- where comepittors product must interface or be compatible with the monopolists product , tech chjoices by monopoliust can be challenged as unnessacrily restrictive Product design-monoply- per se legal prett much only case to hold exclusion = Microsoft Berkey photo Micorsoft found guilty because had monopoly and took steps to protect that power

Leigitimate Busiuness Justificaiotn to monopoly- evne if P can prove D held monopoly power and took antiocmpeittive action the D can show leigitmate business jusitficaiotn for acitons if prove then D has to show that jusitificaiton was pretextual or that anticomepittve harms outweighed benefits. D must hsow tha timporves consumer welfare andhelps it compete on price and quality. Social justifications or competition produces bad results is not enough. And incentive to innovate is good one. Attempt to monopolize SWIFT AND SPECTRUM P must show 1) D engaged in predatory pricing or anticomepittive conduct with 2) specific intent to monopolize 3) dangerous probability of achieving monopoly power ( also for 3) must show D holds some power in relevant market SPECTRUM

1) Predatrory conduct or exclusionary condct designed to acquire a monopoly power same as that for monopolization 2) Specific intent to acquire monopoly- must be something more than to compete bigrousously spectrum- proof of unfair or predatory acts may be sufficient to prove necessary intent to monopolize a. Two paths- direct evidence of intent and circumstnaital evidence of inentent where substantial and grossly anticomepittive predatory or exclusionary conduct 3) Dangerous likelyihood of success- comes down to market power showing- high market share protected by entry barriers- 50 percent is ordinarily sufficient- between 30 and 50 is sometimes sufficnet Conspiracy to monopolize P must hsow 1) two or more D conspired (same as 1 comspiracy)2) with specific intent to secure a monopoly 3) took at least one overt act in furtherance of their conspiracy 4) (courts split on this element)- showing monopoly power and dageorus chance of successspectrumm Business justification may be able to rebut this

IP andinnocaiton Dont want to discourage b/c can spur comepittion and consumer benefit but free riding and such will ruin this. Big tension with anti trust law b/c IP tends to give market power but iencourages innovaiotn by allowing people to profit from it.

Liscencing Issues as to leigitmate IP Some courts recognize per se legality for refusal to liscence IP Single firm has broad leeway with who it chooses to do business withcolgate but colgate also says ecepiton where monopoly power and refusal amounts to exclusionaryvioalte 2 Some ct. of appeals say it is presumptively lawful for refusal to liscence but P can rebut by saying reason for refusal was pretexctual eastman kodak where only 65 % of products were covered by IP and not all of them so illegal.

Concerted refusal to liscence is sometimes held illegal per se PRICE DISCRIMINATION/ ROBINSON PATMAN ACT Robinson Patman act is under Clayton act 2 MERGERS AND ACQUISITIRONS Acquisition can be illegal if leads ot market power- contract so could go under 1 and if give commanding power 2 BUT mainly challenged under clayotn 7 Clayyton 7- it is illegal for one pwrosn to acquire stock of another person if doing so may substantially lessen comepition or tend ot create a monopoly. Generally held the potential monopoly to be prohibited need not yet have materialized at itme transaciotn is challenged can get it in its incipeicny Modern law Starts with Brown Shoe- protection fo small business 7 can stop in its incipeniency b/c says MAY be substantially to lessen compeiton Proteciotn of competition not competitors STRUCTURAL TESTS- only further exmainination of aperitcualr market, its structure, history, and probably future can provide the apporopriate setting for judging anticomepitive effect of a merger Philadlephia- Qausi per se rule for horizontal mergers- Firm controlling undue percentage share of relevant market and results in a significant increase in concentration of firms in market is so inherently likely to lessen comepittion substantially that it myst be enjoined in the absence of evidence clearly showing that merger is not likely to have such anticomepittive effect- THIS CASDE STATED A STRONG PRESUMPTION OF ILLEGALITY FOR HORIZONTAL MERGERS CREATING RELTIVELY SMALL INCREASES In CONCENTRREATION

Philadelphia (where case could be found per se bad on market concentration) was made an rule with an excpeiton in U.S> v General Dynamics where showed where ocncentraiton staitistics could be flawed and should be viewed with caution Merger Guidelines P must show under 7 that c1) transaciotn will lead to undue concentration in the market for a particular product in particular geographic area, the govt. established a presumption that

transaction will will substantially lessen ocmepittion 2) Burden shifts to D to show concentration showed is not representative3) burden of producting additional evidence of anticomepittive shifts to govt. and has burden of pursausion U.S. v Baker Hiughes To show harm under can use following factors to prove 1) For horizontal 1) coordinated effects 2) unilateral effects For vertical- 1) foreclosure 2)facilitating collusion 3) imporper exchange of comepitively sensitive info 4) regulatory evasion by price regulated firms

Defenses under 2) 1) Fialing firm 2) Efificincies Price fixing is worse than mergers can offer procomepitiv ejustificaitons here Matket definition and power Horizontal- HHI- presumption AND Genral dynamics , Baker hiughessay that even high concentration needs to have to consider totality of circumstances considering entry barriers and convnicnign theory of harm Vetical- focus is on the existing concentraiotn in the primary market (the one in which anticomeittive is feared) and look at amount of foreclosure and might require double entry by new entrants. IN HHI guidelines must be minimum 1800 to challenge in primary market and firm to be acquired must have market share of at least 5% HORIZONTAL -Facts making more likely harm- chewating easy to detect , product hereogneity, competition on non price factors, pattern of sales that are infrequent and ocnfidentail, maverick theory VETRTIAL- facts making hamr more likely- foreclosure that raises, entry barriers, raising rivals costs, improper exchange of ocmpeittivley sensistive info, faicilitaiotn collusion for horizontal level to monitor prices or something Can defend with fialing firm (imminent danger of failing and no real prospect of reorganization AND no real alternative that poses less of anti competitive risk) defense or efficineices (need a lot of evidence that efificiencies will happen and as a direct result of merger can show by showing that happened in past transactions