must demonstrate 1 or more Factors” Π “Plus Signaling Look for facilitating devices (Early announcing of prices, etc.) – Actions against manufacturers economic interests History and structure of the industry can rebut the inference of collusion Δ If it is possible that it is either agreement or unilateral conduct, the court will find unilateral conduct there must be some indication that tends to exclude concerted action Insufficient that all film Theater Enterprises v. Paramount Film Distributing Corp. – distributors denied movies to suburban movie theater at the same time for the same reasons Still merely parallel behavior – DOJ Memo Evidentiary Elements Parallel conduct WRT adoption/adherence to a business practice that can be used as a facilitating mechanism Awareness by each firm that rivals are following parallel course Anticompetitive benefit derived by each firm Action contradictory to independent self-interest of each firm action that would – not be adopted unless major rivals also adopted it DISTRIBUTION RESTRAINTS GENERALLY Basic Distinction Vertical restraints that benefit upstream interests tend to enhance competition at the retail level Vertical restraints that benefit downstream interests will often result in less retail competition and higher prices to consumers Historical Development Enforcement of a Retail Price Maintenance Fixed minimum retail price is per se – – unlawful (Dr. Miles Medical) However, manufacturer is free to announce the terms on which it is willing to sell its products, and can stop doing business with any distributor, even if reason is refusal to meet MSRP (Colgate) If manufacturer parts with title to the items (consignment), the manufacturer can mandate the price that the items are sold at (Schwinn) Non-price vertical restraints were illegal (Schwinn, per se rev’d, Continental) HISTORICAL RULE PER SE Dr. Miles Medical illegal Retail Price Maintenance (RPM) agreement Manufacturer enforces Per se – price restraint on retailers Agreement with wholesalers/retailers not to sell less than MSRP
Π must demonstrate 1 or more “Plus Factors” Signaling – Look for facilitating devices (Early announcing of prices, etc.) Actions against manufacturers economic interests History and structure of the industry Δ can rebut the inference of collusion If it is possible that it is either agreement or unilateral conduct, the court will find unilateral conduct there must be some indication that tends to exclude concerted action Theater Enterprises v. Paramount Film Distributing Corp. – Insufficient that all film distributors denied movies to suburban movie theater at the same time for the same reasons – Still merely parallel behavior DOJ Memo Evidentiary Elements Parallel conduct WRT adoption/adherence to a business practice that can be used as a facilitating mechanism Awareness by each firm that rivals are following parallel course Anticompetitive benefit derived by each firm Action contradictory to independent self-interest of each firm – action that would not be adopted unless major rivals also adopted it DISTRIBUTION RESTRAINTS GENERALLY Basic Distinction Vertical restraints that benefit upstream interests tend to enhance competition at the retail level Vertical restraints that benefit downstream interests will often result in less retail competition and higher prices to consumers Historical Development Enforcement of a Retail Price Maintenance – Fixed minimum retail price – is per se unlawful (Dr. Miles Medical) However, manufacturer is free to announce the terms on which it is willing to sell its products, and can stop doing business with any distributor, even if reason is refusal to meet MSRP (Colgate) If manufacturer parts with title to the items (consignment), the manufacturer can mandate the price that the items are sold at (Schwinn) Non-price vertical restraints were per se illegal (Schwinn, rev’d, Continental) PER SE HISTORICAL RULE Dr. Miles Medical Per se illegal Retail Price Maintenance (RPM) agreement – Manufacturer enforces price restraint on retailers Agreement with wholesalers/retailers not to sell less than MSRP