A plaintiff attempting to recovery treble damages

This preview shows page 5 - 7 out of 61 pages.

: A plaintiff attempting to recovery treble damages Clayton Act must prove that the alleged injury is of a type antitrust law is intended to prevent. Invitations to Collude: Invitation to collude can constitute attempted monopolization under Sherman Act § 2 if established by proof of (1) solicitation; and (2) the requisite intent.oAttempted Monopolization - Sherman Act § 2: Market share of 50% or more; and (2) dangerous probability of success (usually function of entry.oUnited States v. American Airlines, Inc. (5thCir. 1984 – pg. 419): American and Braniff had Dallas hub. Competed against each other and together controlled 76% of the market and 90% of direct flightmarket. President of American proposed colluding with Braniff by raising prices 20%. Braniff ratted to the government and government brought Sherman Act § 2 suit against American.Issue: Is an agreement an absolute prerequisite for the crime of attempted joint monopolization?Requirements: Intent with a dangerous probability of success.oSufficient: Solicitation that if agreed to has high probability of resulting in monopolyCourt: Sufficient to prove suit if firm with 50% market share asks rival with 20% market share to engage in collusion, even if 1 party says no to the deal.Note: Not a defense that the plan proved impossible to execute.Holding: An agreement isn’t an absolute prerequisite for the crime of attempted joint monopolization.Direct Proof of Agreement: Documents/testimony/videotapes. Enforcement agencies use leniency policies/programs (rat on others and get lesser sentence) to gather direct evidence from cartel members in exchange for immunity. oUnited States v. Andreas (7thCir. 2000 - pg. 6): Andreas new entrant to lysine cartel that included a handful of other manufactures worldwide, including Ajinomoto. Cartel restricted output to artificially inflate price of lysine. Cartel agreement policed through secret meetings in the guise of 5
trade association meetings with fake agents. Since few lysine alternatives, animal feed manufactures had an inelastic demand curve. Suite brought and Andreas argued price increased was not the result of market power but rather a reaction to increased cost of input and a labor strike.
Issue: Under Sherman Act are companies prohibited from conspiring to or agreeing to restrain trade? Inelastic Demand Curve: Large changes in price barely affect quantity demanded. Is treated as direct evidence of market power in an industry. Prohibition on Agreements: Includes agreements to match price of competitors.oCircumstantial Evidence: Can be inferred if (1) Few companies control an industry; and(2) These companies have a continuing adaptable agreement to fix prices and allocate market share.Court: Agreements artificially increased license prices and production maximums decreased production and further inflated prices. Holding: Under the Sherman Act, companies are prohibited from conspiring to or agreeing torestrain trade. These deals reduced output and allocated production shares to members.Outcome

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture