Home / Summaries / Ch 6: Per Se Offenses (SA 1: Conspiracies in Restraint of Trade) / price-horizontal-agreement

Per Se Offenses (SA 1: Conspiracies in Restraint of Trade)

12 important questions on Per Se Offenses (SA 1: Conspiracies in Restraint of Trade)

Must price-fixing involve an agreement as to price as such?

No.There need not be an agreement as to any particular price; there need not even be an agreement relating to price as such. See Socony-Vaccuum (applying per se illegality where the defendants merely agreed to buy-up and stockpile some of the product in their market to cause price to increase): "The machinery employed by a combination for price-fixing is immaterial. Under SA 1, a combination formed for the purpose and with the effect of raising, depressing, fixing, pegging, or stabilizing the price of a commodity is illegal per se).

Price-Fixing and Agreements re. Terms of Sale

Agreements as to terms of sale can constitute price-fixing, as long as those terms somehow relate to the overall consideration that a buyer must give for the good/service. See Target Sales (US 1980) (an agreement among horizontal competitors to no longer sell on credit constituted price-fixing because credit is one component of the overall price paid).

Why is proof of an actual agreement on literal price not required to prove a claim of per se price-fixing?

Other kinds of conduct can have the same effects and lack redeeming competitive virtue.
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The Sui Generis Rule of BMI (Broad. Music) (US 1979): Price-Fixing Agreements that are themselves a product, and subject to RoR, not per se illegality.

In BMI, SCOTUS described a special rule for dealing with a rare type of horizontal restraint. Where an agreement constituting a price restraint is itself a product that purchasers might desire, the restraint is not per se illegal, but will be analyzed under the rule of reason. But note, it will be rare for a horizontal price or output restriction to in-and-of-itself give consumers something that they want but otherwise cannot get.

BMI (US 1979): Unique Aspect of Reasoning

Here, the agreement created a central organization that collectively licensed the members' music at a flat fee. Scotus reversed per se treatment b/c the licensing system created a whole new product. Specifically, the "blanket licenses" sold by the organization included all of the songs in its library, which was something that no individual composer could not sell.

Category 2: Horizontal Market Allocations - General Definition

Market allocation or market division schemes are agreements in which competitors divide markets among themselves. In such schemes, competing firms allocatespecific customers or types of customers, products, or territories among themselves.

Category 3: Horizontal Concerted Refusals to Deal (Group Boycotts): Generally, what "boycotts" are covered by AT

Antitrust is not concerned with the essentially political, consumer "boycott." The conduct that AT is concerned with typically involves an agreement among competitors or some other participants in a given market to refuse to do business with some 3rd party who is also involved in that market. Note, to be covered by AT, the arrangement must usually somehow serve the parties' own COMMERCIAL advantage and directly interfere with the system of individual choices made by consumers on the basis of price and quality.

Example of a Per Se Horizontal Boycott: VA Blue Shield (US 1982)

The plaintiff alleged that his insurer had agreed with a psychiatrists' trade association that the insurer would not reimburse the services of psychologists. That is, this was an agreement among two participants in the market for mental health services (insurers + psychiatrists) that they would not associate with another participant (psychologists), which directly interfered with price competition between psychiatrists and psychologists.

NW Wholesale Stationers: Distinguishing Per from Non-Per Se Boycotts

Where the challenged arrangement is not clearly a naked, horizontal boycott (i.e., standard-setting, cooperatives and trade associations) the rule is that per se treatment should be reserved for boycotts involving horizontal agreements among competitors that (1) target another horizontal competitor and (2) is used directly to (a) raise prices, (b) restrict output, or (c) divide territories or customers.

Example of a clearly per se naked horizontal boycott

An agreement among horizontal competitors that is naked of any pro-competitive goals, but instead has the sole purpose of coercing an increase in the price to be paid for the good/service. See Superior Court Trial Lawyers (US 1990).

Boycotts - The 1st Amendment Issue

When people get together to state their views, either publicly or to their government, they me engaging in conduct that is constitutionally protected as free speech or petition of government for redress of grievances under 1st Am. Thus, at least theoretically, any concerted regal to deal may be constitutionally protected.

Boycotts - 1st Amendment Analysis

  • If the boycott is politically-motivated and designed to effectuate constitutional rights, it may be protected by 1st Am. See Claiborne Hardware (US 1982).
  • If the boycott is commercial motivated and the participants stand to profit financially from a lessening of competition in the boycotted market, then it is not protected by the 1st Amendment. See Allied Tube (US 1988).

The question on the page originate from the summary of the following study material:

Ch 6: Per Se Offenses (SA 1: Conspiracies in Restraint of Trade)

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