Sherman Antitrust Act: Difference between revisions

* '''Violations "per se":''' These are violations that meet the strict characterization of Section 1 ("agreements, conspiracies or trusts in restraint of trade"). A per se violation requires no further inquiry into the practice's actual effect on the market or the intentions of those individuals who engaged in the practice. Conduct characterized as unlawful per se is that which has been found to have a "'pernicious effect on competition' or 'lack[s] . . . any redeeming virtue'"<ref>{{ussc|name=Continental T.V., Inc. v. GTE Sylvania Inc.|link=|volume=433|page=36|pin=58|year=1977}} (quoting {{ussc|name=Northern Pac. Ry. v. United States|link=|volume=356|page=1|pin=5|year=1958}}).</ref> Such conduct "would always or almost always tend to restrict competition and decrease output."<ref>{{ussc|name=Broadcast Music, Inc. v. CBS|link=|volume=441|page=1|pin=19–20|year=1979}}.</ref> When a per se rule is applied (in contrast to a rule of reason analysis), a civil violation of the antitrust laws is found merely by proving that the conduct occurred and that it fell within a per se category.<ref>{{ussc|name=Jefferson Parish Hosp. Dist. No. 2 v. Hyde|link=Jefferson Parish Hospital District No. 2 v. Hyde|volume=466|page=2|pin=|year=1984}}; ''[[Gough v. Rossmoor Corp.]]'', [https://law.justia.com/cases/federal/appellate-courts/F2/585/381/424532/ 585 F.2d 381], 386–89 (9th Cir. 1978), cert. denied, {{ussc|440|936|1979|el=no}}; see {{ussc|name=White Motor v. United States|link=|volume=372|page=253|pin=259–60|year=1963}} (a per se rule forecloses analysis of the purpose or market effect of a restraint); ''Northern Pac. Ry.'', 356 U.S. at 5 (same).</ref> Conduct considered unlawful per se includes horizontal price-fixing,<ref>{{ussc|name=United States v. Trenton Potteries Co.|link=|volume=273|page=392|pin=397–98|year=1927}}.</ref> horizontal market division,<ref>''Continental T.V.'', 433 U.S. at 50 n. 16 (limiting {{ussc|name=United States v. Topco Assocs.|link=|volume=405|page=596|pin=608|year=1972}} by making vertical market division rule-of-reason analysis).</ref> and concerted refusals to deal.<ref>{{ussc|name=FTC v. Superior Court Trial Lawyers Ass'n|link=|volume=493|page=411|pin=|year=}} for collusive effects and {{ussc|name=NW Wholesale Stationers, Inc. v. Pacific Stationery & Printing Co.|link=|volume=472|page=284|pin=|year=1985}} for exclusionary effects.</ref>

* '''Violations of the "rule of reason":''' A totality of the circumstances test, asking whether the challenged practice promotes or suppresses market competition. Unlike with per se violations, intent and motive are relevant when predicting future consequences. The rule of reason is said to be the "traditional framework of analysis" to determine whether Section 1 is violated.<ref>''Continental T.V.'', 433 U.S. at 49. The inquiry focuses on the restraint's effect on competition. {{ussc|name=National Soc'y of Professional Eng'rs v. United States|link=|volume=435|page=679|pin=691|year=1978}}.</ref> The court analyzes "facts peculiar to the business, the history of the restraining, and the reasons why it was imposed,"<ref>''National Soc'y of Professional Eng'rs'', 435 U.S. at 692.</ref> to determine the effect on competition in the relevant product market.<ref>See ''Continental T.V.'', 433 U.S. at 45 (citing {{ussc|name=United States v. Arnold, Schwinn & Co.|link=|volume=388|page=365|pin=382|year=1967}}), and geographic market, see {{ussc|name=United States v. Columbia Steel Co.|volume=334|page=495|pin=519|year=1948}}.</ref> A restraint violates Section 1 if it unreasonably restrains trade.<ref>''Continental T.V.'', 433 U.S. at 49; see {{ussc|name=Standard Oil Co. v. United States|link=|volume=221|page=1|pin=58|year=1911}} (Congress only intended to prohibit agreements that were "unreasonably restrictive of competitive (conditions").</ref>

 

===Modern trends===