Summary: Ch 9: Exchanges Of Information (A Further Problem In Horizontal Cooperation)

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• 1 CH 9: Exchanges of Information (A Further Problem in Horizontal Cooperation)

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• The Bookend Cases: The 2 prominent 1920s SCOTUS cases on info sharing

  1. American Column (US 1921)
  2. Maple Flooring (US 1925).

• American Column + Maple Flooring emphasized . . .

  Intent. SCOTUS seemed primarily concerned with the question of, based on the kind and amount of information being shared, whether the defendants intended to raise prices. If they so intended, the arrangement was illegal under SA 1.

• Lesson of American Column and Maple Flooring

  These cases show SCOTUS weighing the policy balance between (a) encouraging information exchanges that will aid the machinery of price competition [specifically, the sharing of retrospective price information, see Maple Flooring] and (b) containing information exchanges that will aid collusion [specifically, future price projection information, see American Column].

• Fundamental Rule on Info Exchanges

  The mere exchange of information among competitors is not illegal in-and-of itself. There must be something more.

• SCOTUS' last major statement on info sharing

  Container Corp (US 1969)

• How did Container Corp shift the traditional analytical focus under the bookends approach.

  SCOTUS did not look at intent (did not inquire at all into the parties' intent and was not even particularly concerned with the amount or kind of information being shared), but instead focused on INDUSTRY structure--specifically, (1) the structure of the industry itself, and (2) the likelihood that shared price information would facilitate price increases within that industry.

• Under current law, what are the 2 viable information sharing claims

  1. An American Column Claim
  2. A Container Corp Claim

• How can a plaintiff make a claim under American Column

  If a plaintiff can show that the information sharing agreement resembles the one in American Column [projections about future sales trends, including predictions of future prices and specific information about particular sellers and particular past transactions], THEN P could prevail under a rule of reason analysis without having to show any of the market structure evidence required to support at Contained Corp Claim

• How can a plaintiff make a claim under Container Corp

  IF a plaintiff can show that structural factors make the market at issue similar to the one in Container Corp [where a market is concentrated, the product fungible, and demand inelastic, there is an increased likelihood information exchanges will enable firms to engage in interdependent price increases even without an explicit agreement], THEN P could prevail under what is in effect a rule of reason analysis.

• What must a plaintiff show under Container Corp

  A price-sharing agreement will be held illegal under SA 1 only if the P produces evidence consistent with oligopoly behavior.