Cartel Per Se Analytical Process

1
Cartel Per Se Analytical Process
Suspect category (price, boycott, market
division)?
No
Rule of Reason - Market power? -
Anticompetitive? - Procompetitive? -
Purpose? - Less restrictive means? - Plus,
plus
Yes
Naked restrain, blatantly anticompetitive?
Yes
No
Quick Look Any procompetitive pluses?
Yes
Pass
Flunk
No
Home Free
Cooked
Caution Souter in Cal Dental No bright light
between per se and rule of reason.
2
Cartel Proof Issues

• Was there a meeting of the minds?
• - Express agreement not required.
• - Subtle accent may do job.
• 2. How much evidence is required to get case to
  jury?
• 3. How best to get the evidence?

3
Interstate Circuit v. U.S. (1939)

• Why do they call this the rimless wheel case?
• ODonnell put pressure on movie distributors to
  require 25 cent price on later runs of A movies
  and to not allow first run of A movies as part of
  double feature. What was ODonnells purpose?
• Only two distributors agreed in writing.
  According to the court, did others agree? How?
• What was the impact of lack of testimony?
• If this viewed as conscious parallelism, what
  were the plus factors?

4
Theater Enterprises v. Paramount Films (1954)
Basic Facts Suit by suburban theater owner for
treble damages because 1st run movie distributors
limited first run movies to downtown Baltimore
theaters. Who won at trial? What did Plaintiff
want court to do? Is this any different than
Interstate Distributors?
5
Theater Enterprises v. Paramount Films (1954)

• Holding Evidence was sufficient to submit
  conspiracy issue to jury.
• Conscious parallelism requires something more
  than uniform action.
• Tacit understanding wont do the job alone.
• No direct evidence of an illegal agreement.
• Distributors had good business reasons for the
  way they acted. Suburban theaters too small.
  Downtown theaters pull more. More money made in
  suburbs on later runs.

6
Matsushita Electric Industrial v. Zenith Radio
Corp (1986)
Basic Facts Zenith and other US TV
manufacturers sued Japanese manufactures,
claiming they conspired to to sell below cost in
the United States in violation of Sherman
Act. What was theory on how the Japanese
companies could afford to do this? Why would
Japanese companies want to do this? What did
District Court decide? Why? What did Court of
Appeals decide? Why? What was issue before
Supreme Court?
7
Matsushita Electric Industrial v. Zenith Radio
Corp (1986)

• Supreme Court
• What case not?
• - No American antitrust regulation of what
  goes on in Japan.
• - RCA, as competitor, cant assert claims
  based on competition
• injury.
• RCAs theory was based on monopoly claim.
• Upheld summary judgment
• - No genuine issue of conspiracy.
• - Japanese companies had been acting same
  way for 20 years.
• - RCA and Zenith still biggest TV players.
• 4. Four dissenters would have sent to jury. See
  157 quote.

8
Wood Pulp Case Before European Court of Justice
(1993)
Was there any questions all pulp players sold at
the same price? What was mechanism to enable all
to sell at same price? How did lower commission
view the mechanism? What is concertation? Was
there any concertation? How did court factor in
elements of risky competition long-term market
and commercial risks to buyers and sellers.
9
In re High Fructose Corn Syrup

1. No evidence of conspiracy.
2. Concentrated market enabled competitors to limit
   price competition.
3. Tacit agreement is not enough for Sherman
   Violation.
4. The question is whether there is enough evidence
   to allow jury to reject notion that defendants
   forswore price competition without really
   agreeing.
5. In this case, not implausible that jury could so
   find.