United States v. Arnold, Schwinn & Co. (Sup. Ct. 1967)

1. United States v. Arnold, Schwinn & Co. (Sup. Ct. 1967) What had happened to Schwinn’s market share? Three restrictions imposed by Schwinn: - Territorial restrictions on distributors - Distributors could only sell franchised retailers - Retailers could not sell nonfranchised retailers Which did Court say were per se illegal? Why did Court draw distinction between consigned sales and outright sales? Law 552 - Antitrust - Instructor: Dwight Drake

2. Albrecht v. Herald Co. (Sup. Ct. 1968) Basic Facts: Herald newspaper imposed maximum price constraints on its independent carriers. Terminated carrier for violating. Did Court draw any distinction between maximum and minimum price constraints? What was Court’s rationale for saying maximum price constraints are absolute violation of Sherman 1? Who is helped by Court’s rule? Law 552 - Antitrust - Instructor: Dwight Drake

3. Continental T.V., Inc. v. GTE Sylvania Inc. (Sup. Ct. 1977) Basic Facts: Sylvania, TV manufacturer with mini market share, developed new marketing plan that limited retail franchises in an area and required franchisees to sell only out of specific locations. Continental, upset that Sylvania authorized new competing retailer in S.F. and refused Continental’s request to sell in Sacramento, moved merchandise to Sacramento. Credit line was reduced, payments weren’t made, and Continental was sued. Continental claimed territory restrictions violated Sherman 1 under Schwinn Case. What was Continental’s market share pre- and post- plan? Did majority distinguish Schwinn? Did concurring? Did 9th Cir.? Did Dist. Ct. apply per se? Did 9th Cir.? What was significance of intrabrand and interbrand distinction? Law 552 - Antitrust - Instructor: Dwight Drake

4. Business Electronics Corp. v. Sharp Electronics Corp (Sup. Ct. 1988) Basic Facts: Sharp, calculator manufacturer, terminated Houston dealer who was selling below suggested retail when Hartwell, other Houston distributor, demanded termination or it would terminate relationship. Hartwell alleged other retailer was “free-riding”. There was no agreement between Hartwell and Sharp on selling prices. Dist. Ct. gave per se instruction. Why did fifth circuit reverse? How does case compare to Sylvania? Was price the central issue? What was Hartwell’s free riding claim? Law 552 - Antitrust - Instructor: Dwight Drake

5. State Oil Company v. Khan (Sup. Ct. 1997) Basic Facts: State Oil, gas distributor, demanded station owner remit any profits realized by selling gas above level of 3.25 cents over cost per gallon. Effect was to impose maximum price constraint. Dist. Ct, applied “rule of reason” and dismissed because no market definition evidence. Ct. of Appeals (Posner) reversed on basis of Albrecht. What did Posner think of vertical price restraints? What are the different impacts of minimum and maximum vertical price restraints? How is interbrand competition, the darling of antitrust, impacted by minimum and maximum vertical price constraints? Law 552 - Antitrust - Instructor: Dwight Drake

6. NYNEX Corp. v. Discon, Inc (Sup. Ct. 1998) Basic Facts: AT&T Tech contracted telephone removal services with NYNEX at fraudulently high prices that were passed onto consumers. Discon, former supplier to AT&T Tech, went out of business and sued, alleging illegal boycott in violation of Sherman 1 and 2. Any question conduct was fraudulent? Why die Plaintiff rely so heavily on Klor’s case? How did Court distinguish Klor’s? Why did the Court refuse to find a per se illegal boycott? What did Court say about the freedom of companies to switch suppliers? Law 552 - Antitrust - Instructor: Dwight Drake