Price Fixing Agreements Are Not Enforced By The Courts

7. This area is about 300 miles long (from Marion County TN to Kanawha County WV) and about 100 miles wide. The Landgericht did not define the relevant market, perhaps because it saw it as a case of an unlawful price cartel in itself. Instead, the district court only reported the shares of the defendants in four different universes (1 F.Supp. 339, 339-340). Although the District Court`s decision did not discuss selection from these universes, it seemed to favor the 74% above. This efficacy and efficacy test is the source of the section 27 test. As Sullivan and others have noted, the first part of the rule contains an embryonic version of the per-se rule against price cartels or antitrust. [122] However, it was possible to read the cases in such a way that the rule of reason applied to both bare and secondary restrictions.

That is exactly what the Supreme Court did in its next big case in Section 1, the Chicago Board of Trade v. the United States. [123] In United States vs. Addyston Pipe & Steel Co,[93] Justice William Howard Taft (as he was at the time) [94] provided a methodology for doing so. Addyston was involved in a cartel. The defendants were six manufacturers of cast iron pipes. They divided the land into territories, jointly determined prices for each territory and shared the shops. Their goal was to keep prices low enough to prevent further entries. However, prices were higher than would have led to a competitive market.

Again, the defendants sang the siren song of the cartel, arguing that the agreements were necessary to avoid ruinous competition and that prices were reasonable. The Sixth Circuit Court of Appeals disagreed. Justice Taft presented a methodology for determining legal and illegal agreements under the law. Taft claimed to use the common law trade restriction.[95] Taft stated that the law prohibits agreements whose “sole purpose” is to restrict trade. However, this paper shows that Socony actually anticipated the standard usually attributed to BMI (i.e. Maricopa de Socony`s misinterpretation, as the per-se rule went wrong, a more reasonable reading of Socony may allow for a return to a more reasonable use of the per-se rule). The second important fact concerns the undertakings operating on the relevant market. . . .

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