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26 Cards in this Set
- Front
- Back
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1927-Trenton Potteries et.al.
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Price Fixing conspiracy on sanitary pottery
Lost at District court(found guilty of price fixing), Appeals court found district court errored --Jury(district): Sec. 1-cases should be decided per se-Jury found that they did it Appeals-shold use rule of reason(only unreasonable ROT illegal) =Reasonable prices and profits=no injury to public Final Decision==Need to use PER SE in price fixing cases(District was right) *Market system works best if no conspiracy on price |
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1933-Appalachian Coals et.al.
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Coal Companies conspiring on price(great depression)
Court: if follow trenton(PER SE) then guilty Defense: use Rule of Reason -reasonable conspiracy because: had good intentions(not exploitative), economy was in terrible shape(lots of excess capacity in coal), selling coal to concentrated industries(railroads, steel co's), charging reasonable price(no injury to public) Court= use rule of reason=conspiracy is ok: -not much market power -no evidence of use of market power(prices seemed reasonable) |
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1940-Socony-Vacuum
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prices kept falling so firms would be forced out of business(great depression)
-had to keep prices from falling NRA(National Recovery Administration)--to legalize price fixing as long as approved by NRA --declared unconstituitional(oil comapanies continued conspiring on price) Judge-use PER SE from now on(appalachian coals was rarity), rule of reason and use of market power are irrelavant *No more conspiricies or monopolizations(structure and conduct) BACK TO TRENTON |
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1911-Standard Oil of New Jersey
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controlled 90% of oil business(overwhelming market power)
exclusionary conduct that denotes monopolization -predatory pricing=selective price cuts to drive companies in certain areas out of business -buying of oil pipelines--refusing to deal=forced to merge with SONJ) COURT=agreed-monopolization w/ structure and exclusionary conduct Forced break up of SONJ into many smaller oil companies(Exxon, Chevron, Mobil, Amaco, etc.) |
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1920-U.S. Steel
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75% of steel market-overwhelming Market power
Exclusionary conduct?--US steel's competitors loved them-US steel did nothing like Standard Oil of NJ COURT=bigness(75%) is not an offense =non exclusionary conduct makes them ok |
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1945-ALCOA
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90%+ of aluminum business--structure of monopoly
Judge: Specific(SONJ&US Steel) or General intent to monopolize--from now on look at general intent to monopolize If monopoly does anything to gain and/or keep its position it is guilty of Sec. 2 sherman act ALCOA defense: gained/kept its position through no fault of its own looked at facts:-bought up reserves -as demand increased, ALCOA increased capacity -had the best aluminum workers **Monopoly can't do these things After war found guilty of monopolization and broken up into three smaller companies |
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1956-Du Pont
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100% of cellophane business(monopoly structure)
-did things to keep its monopoly position If follow ALCOA-guilty Court found not guilty --No such thing as cellophane market -real market was flexible wrapping paper(DuPont had 20% of this market=therefore not monopoly |
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1979-Berkey Photo
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Kodak monopoly in cameras(90%), film(88%) processing(used to have 90%)
tie in sales case-until 1954 Kodak tied in sales of film to processing--kodak lost tie in case and agreed to provide processors w/ what they needed to process film Kodak--10% of processing market(Berkey larger than Kodak) kodak developed new camera and wouldn't let independant processors in on how to develop the new kind of film needed Berkey-said Kodak using monopoly position in cameras and film to hurt processors *entitled to benefit from new inventions =much harder since 1979 to win Sec. 2 case--need to show exclusionary(evil) conduct |
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1962-Brown Shoe
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Merger: #4 manufacturer & #8 melaelen kinney:#1 family shoe store
horizontal aspects:no such thing as shoe market, must be more specific, but in 20 mkts=market power vertical: potential foreclosures, if become large enough can cause other problems court:looked at trends=# companies decreasing, chain stores increasing=Therefore Disallow merger |
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1966-Vons Grocery
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merger: #3 Vons & # 6 Shopping Bag=# 2 in LA (horizontal merger)
Together:75% of market share -mom and pop stores hurt by chains =disallow merger to protect competition Dissent-LA mkt was competitive before and after merger -technical change:rise of chains benefit customers -Bad decision:since protecting competitors, not competitive process |
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1965-Consolidated Foods
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Merger: CF-large food wholesaler&retailer
Gentry: # 2 producer of dried onion & garlic--sell to food processors Conglomerate merger Gentry-->food processors-->CF FTC said it violated Sec. 7 clayton act CF-->used threat & lure of reciprical buying in its competition for business in sales of dried onion &garlic Appeals court=said it was ok -10 yrs of experience after merger w/ no problems Supreme Court-reciprocity is anticompetitive& sec. 7 deals w probabilities not certainties(no free trial period) court--> no free trial period but even if look at results-->anticompetitive results **lots of evidence of reciprocity-many firms bought from gentry to satisfy CF even though Gentry had inferior products |
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1967-Proctor & Gamble + Chlorox
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Conglomerate Merger
Proctor & Gamble #1 detergent producer in US(54% of mkt) Chlorox #1 bleach producer in US (48%) *product extension merger FTC-->anticompetitive effects -\1. disuade new entrants-increased barriers to entry(P&G #1 advertiser in US-good deals advertising/quantity discounts 2. discourage active competition for other bleach co's 3. merger will decrease potential competition-->most likely entrant of market is someone like p&G Final decision=if P&G wants to enter bleach market they can do so by: -merging with another company -enter new by themselves |
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1912-Henry vs. A.B. Dick
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AB Dick-patent monopoly on mimeograph machine
-->contracts made users buy ink and pencils from AB as well(this is where made their money) Henry didn't like this(AB sued) Supreme Court=legal patent monopoly if consumer doesn't like terms of contract they don't have to sign-TYING OK 1914-Sec. 3 of clayton act makes tying agrewements that substantially lessen competition illegal |
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1947-International Salt
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Largest Industrial Salt producer
-patent monopoly on 2 of its machines tie in-->part of control said that onl international salt can be used in these machines --US alleged illegal Tie-in Int. Salt defense: 1. contracts say salt will meet lower price of competitor 2. Int. Salt is responsible for mainanence and repair of machines-->so they want high quality salt used Court: 1. Yes, but always make sale at same price=anticompetitive 2. just set quality standards for salt **Illegal tie-in sale (mkt power since patent monopoly) |
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1962-Loews
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Block Booking case
movie distributors block booked movies to tv stations--must take good movies w/ bad court-->says requisite power presumed if patent(Int. salt) --but what about copyrighted material(movie) Movie distributors-said no mkt power(movies about 8% of TV programming) Court=if copyrighted products then owner of each movie has mkt power **enough mkt power to force tv stations to do something they didnt want to do-ILLEGAL TIE IN SALE |
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1971-Siegal vs. Chicken Delight
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Chicken delight0-fast food franchise-make money not through fees or royalties but through selling franchise supplies(p>Cost)
Tying-franchise(brand name) w/ supplies Defense:Not seperate mkts -reasonable way to make profit court=trademark gave enough economic power to get franchisees to do something they didnt want to chicken delight-->need to keep up standards for franchises **court says they can set standards and let co's buy supplies on open market |
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1984-jEFFERSON pARISH hOSPITAL dISTRICT nO. 2 VS. hYDE
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Hyde-anesthesiologist
Hospital district-tied surgery to using their preferred company for anesthesiological services illegal tie in sales-->surgery to specific anesthesiologists court=seller must have mkt power in tying product(yes-few hospitals) =need substantial threat that seller will acquire mkt power in tied product(yes) =must be economic basis for treating the tying and tied product mkts as seperate(No-no seperate mkt for anesthesiologist services seperate from surgery) **not illegal tie-in sale |
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1992-Eastman Kodak vs. Image technical services
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Eastman Kodak produces copy machines
court-->needs to decide if lack of mkt power in primary mkt preclude as a matter of law a finding of illegal tie-in sale Image-18 copymaker services co's brought suit against Kodak-tying parts to service of copymakers --used to sell parts to independants but changed their policy(now had 95% of service business on kodak machines) --some independants went out of business, others hurt business -->kodak said-> no mkt power in copymachines, cant have mkt power in parts and service Court=long lived asset-information costs and switching costs **once machine is purchased then kodak has mkt power |
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1967-Utah Pie
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Frozen pie mkt in salt lake city
Utah Pie(local firm) sues national firms:continental baking, carnation, pet milk started small and grew to 66.5%of local mkt national firms cut prices & utah pie mkt share fell to 45.3% national brands:prices in salt lake were less than prices in california(where plants are) utah pie-->illegal price discrimination--harms competition District Court-->Utah Pie wins Appeals court: not illegal price discrimination within meaning of law Supreme Court:yes, price lower in salt lake yes, harmed utah pie-->illegal price discrimination dissent: utah pie was profitable before and after price discrimination & mkt share decreased, however sales volume increased every year *law isn't to protect individual competitors but competitive process Makrket is now more competitive-->low prices good for consumers |
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1993-Brooke group vs. Brown and Williamson(B&W)
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Brooke group-->ligget & meyers--used to have 20% of mkt, fell to 2%-->smallest tobacco co
B&W-tobacco co's L&W started generic cigarettes-grew to 5% of mkt(generics were 80% of this) B&W enters generic mkt(next smallest co) 6-US tobacco cos cut generic prices & cut again &again Brooke group alleges that quantity discounts of B&W is price disc. District-->jury--finds for brooke group, Judge-->says no reasonable jury could find for brooke group damages=49.6 million X3=148.8 M Appeals: agree w/ judge-->how was B&W supposed to reap losses from supposed predatory pricing campaign Supreme court--says must revisit utah pie -to harm competitive process, must sell below cost -must show reasonable probability that predatory firm can recoup losses(entry barriers) all 6 firms now making generic cigarettes(easy to enter-15% of US market) |
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1945-morton salt
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Illegal quantity discounts or not?
price per case changes depends on how much salt you buy(less than carload, carload, cases per year) *no cost basis and harms smaller buyers of salt(secondary line price discrim.) FTC-violates robinson patman act appeasl court-no injury to competitive process so ok Supreme court-only need to show reasonable probabilitythat pricing will harm competition reason for law-->protecting small firms that buy in small lots |
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1990-Ricks Texaco vs. Texaco
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Texaco sold gasoline to:
-GullOil co at wholesale price and then gull distributed -dompier oil co at wholesale price and then domopier distributed to stations -texaco retailers-->texaco served as wholesaler *retailers complained texaco charged too much for wholesailing services Supreme Court: Yes, there can be excessive functional discount =illegal price discrimination most functional discounts are legitimate and dont hurt competition *cited morton salt-purpose of law is to protect small business-->illegal in this case |
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1984-Monsento vs. Spray Rite
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Spray Rite-distributed monsento chemicals to farmers
-->cut prices below suggested retail price-->other distributors complained to monsento-->monsento dropped spray rite as distributor spray rite sues-violation of sherman act section 1 district=if monsento dropped spray rite after complaints, then guilty per se jury-->said yes- guilty-->3.5 million X 3=10.5 million appeals court-->can infer a conspiracy if price cutting distributor is dropped following complaints from other distributors-->not strong enough Supreme court--deciding vertical price fixing on per se basis--therefore need strong evidence need more-*in this case there was more evidence, therefore appeals court was right, but for the wrong reason |
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1986-matsushita electric vs. zenith
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U.S. tv manufacturers-alleged that 27 japanese tv manufacturers had conspiracy to use predatory pricing to drive US co's out of business
sherman 1&2 -->said japanese co's artificially set high prices in japan so they could set artificially low prices in US to finance predatory campaign District--summary judgment for japanese appeals--agreed supremecase first brought in 74 based on occurences in 60's and 70's-->20 year case-->not plausible single firm predation-unlikely conspiracy of 27 firms-->extremely unlikely for predation Zenith still had 40% of market and was profitable summary judgment ok |
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1977-Continental TV vs. GTE sylvania
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vertical mkt division
contract-->gives retailers of sylvania tv's market restriction(specific territory, not exclusive territory) sylvania increased # of retailers in san fran area, makes continental upset so continental opens store in sacramento(outside territory) sylvania says this violated contract(drop them) court--vertical price fixing-->illegal per se -vertical market division--is there any redeeming value or should it also be illegal per se Decreasing Intrabrand competition could actually increase interbrand competition |
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2007-Leegin Creative Leather Products vs. PSKS Inc.
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leegin makes shoes-->policy of dropping retailers that sold below manufacturers suggested retail price
PSKS--retailer who cuts price and is dropped Due to Dr. Miles case both District and appeals decide per se supreme-->reconsider Dr. Miles--> decide to use rule of reason from now on **aggressive competitive retailers who have good promotion and good service |
