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Rothery Storage & Van Co. v. Atlas Van Lines (D.C. Cir. 1986)

Rothery Storage & Van Co. v. Atlas Van Lines (D.C. Cir. 1986).

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Rothery Storage & Van Co. v. Atlas Van Lines (D.C. Cir. 1986)

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  1. Rothery Storage & Van Co. v. Atlas Van Lines (D.C. Cir. 1986) Basic Facts: Deregulation of moving industry made it possible for independents to compete with major movers who work with independent agents. Atlas adopted rule that it would terminate agency contract and deny Atlas services to any independent who handled business for own account. Independents alleged Atlas actions were illegal group boycott. Dist. Ct. granted Atlas summary judgment motion. How big of market share did Atlas have? How did Atlas hurt independents? Was price a factor? How? Law 552 - Antitrust - Instructor: Dwight Drake

  2. Rothery Storage & Van Co. v. Atlas Van Lines (D.C. Cir. 1986) • Appeals Ct. (Bork) affirmed Atlas summary judgment. • At 6% market share, no issue of price or output control of market. Sub-market analysis not proven, nor tight oligopoly claims. Analysis might begin and end with no market power. • Free rider claim is supported. Independents loss capacity for free ride on Atlas national rep, facilities, dispatching services, etc. • If free-riding allowed to continue, Atlas might decide to discontinue services which would hurt market. It’s subsidy to competing agents may cut marginal revenue so less can be offered. Restrain here counter free-riding. • Restrain here really ancillary to main joint venture between Atlas and its agents. Addyston Pipe. Law 552 - Antitrust - Instructor: Dwight Drake

  3. Rothery Storage & Van Co. v. Atlas Van Lines (D.C. Cir. 1986) • Concurring: • Reject Majority view that lack of market power requires no balancing of anticompetitive and pro-competitive effects. Majority wrong in suggesting only purpose of antitrust is control of output and prices. • Rule of Reason analysis is not decided solely by looking at market shares and efficiency. Market share important, buy not only factor to consider. Law 552 - Antitrust - Instructor: Dwight Drake

  4. Broadcast Music Inc. v. Columbia Broadcasting 1979) • Base Facts: ASCAP and BMI secured nonexclusive licenses from composers and artists and then master licensed to users. CBS claimed master licenses controlled and fixed prices and were per se illegal. Ct of Appeals held per se illegal. • What was underlying purpose of master license? • What impact on market? • Who gets hurt by this restraint? • What was issue for court? Law 552 - Antitrust - Instructor: Dwight Drake

  5. Broadcast Music Inc. v. Columbia Broadcasting 1979) • Issue: Were master licenses per se illegal price fixing under Sherman 1. • Decision: No. Remand for rule of reason analysis. • - To apply per se, must first inquire whether conduct interferes with free market System. • Blanket licenses not naked restrain, is nonexclusive, not interfere with competition, and is necessary to market the product. • Not illegal where agreement on price necessary to market product. Law 552 - Antitrust - Instructor: Dwight Drake

  6. Broadcast Music Inc. v. Columbia Broadcasting 1979) • Dissent (Stevens) • No per se violation holding is correct. But no need to remand because record shows blanket license violates Sherman 1 under Rule of Reason. • Market dominated by ASCAP blanket “all-or-nothing license that is patently discriminatory. Price paid unrelated to quantity or quality used. All buyers must pay for more than they want. • No price competition between separate compositions. Composers disinclined to go direct . • Large buyers (CBS) are also protected by antitrust. Law 552 - Antitrust - Instructor: Dwight Drake

  7. Northwest Wholesale Stationers, Inc. v. Pacific Stationary & Printing Co. (1985) Basic Facts: Pacific, a retailer and wholesaler of office supplies, was expelled from Northwest, a purchasing cooperative of retailers. Reason for expulsion was Pacific’s wholesaling activities. Could Pacific still purchase from Northwest? At what price? What was economic harm to Pacific? Was this a boycott? A concerted refusal to deal? What did Dist. Ct. decide, and what was rationale? What did Ninth Circuit decide? Why? What was issue before Supreme Court? Law 552 - Antitrust - Instructor: Dwight Drake

  8. Northwest Wholesale Stationers, Inc. v. Pacific Stationary & Printing Co. (1985) • Issues before Court: Did expulsion of Pacific trigger per se Section 1 liability? • Does a concerted refusal to deal always trigger per se Sherman 1 liability. • Holding: Not all boycott or concerted refusal to deal per se illegal under Sherman • Reversed Ninth Circuit. Remanded for review of Dist. Ct’s rule of reason • analysis rejecting Pacific’s claim. • Lack of procedural safeguards for expulsion decision not relevant to Sherman • 1 liability. Procedures can’t create per se or protect from per se liability. • Boycott per se analysis confusing. Most per se boycotts involve dominant firms cutting off access to supply, facility or market necessary for competition. • Not all boycotts will be predominately anticompetitive. This type of concerted action not like to be predominately anticompetitive. • Mere allegation of refusal to deal not enough; must show market power or unique access to element necessary for competition. • Dist. Ct. correct in applying Rule of Reason. Remand for review. Law 552 - Antitrust - Instructor: Dwight Drake

  9. American Column & Lumber Co. v U.S. (1921) • Basic Facts: American Hardware Manufactures’ Association offered Open • Competition Plan, where members exchanged voluminous information on • prices, production, etc. with each other. Of 400 members, 365 signed onto • Plan. No agreement on pricing or output, just detailed information that • all Plan members were required to provide. Info supplemented with • regular meetings where more infor was acquired and discussed. Regular • warnings that over production would kill market. • Should information associations be encouraged? What was attitude in • in 1918? • What is the value of open information? Is it pro-competitive or anti- • competitive? • Should we encourage privacy of sensitive market data? How about • Microsoft? Law 552 - Antitrust - Instructor: Dwight Drake

  10. American Column & Lumber Co. v U.S. (1921) Majority: Held Plan violated Sherman 1 as restrain of trade: - Disposition of men to follow most powerful, intelligent competitiors. - Purpose to cultivate “harmony of action”. - All sanctions operate under bad faith restrain of trade. - Purpose of Plan was to procure harmonious actions of members. - Any deviant member immediately exposed. Old gentlemen’s way. Dissent (Holmes): Sherman Act should not be against knowledge. Ideal of commerce should be intelligent exchange of information. A combination to get and dispense knowledge, though tending to equalize, is far from any unreasonable restrain of trade. Dissent (Brandeis, McKenna): No coercion, monopoly, agreements on price or output, etc. Sherman should not condemn cooperative actions to inform. Not suppress competition, but helps by substituting knowledge for ignorance, guessing and rumor. Law 552 - Antitrust - Instructor: Dwight Drake

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