Corporate & Securities Law

Supreme Court Decides linkLine

By David Fischer

The decision is available here.  The decision begins:

The plaintiffs in this case, respondents here, allege that a competitor subjected them to a “price squeeze” in violation of §2 of the Sherman Act. They assert that such a claim can arise when a vertically integrated firm sells inputs at wholesale and also sells finished goods or services at retail. If that firm has power in the wholesale market, it can simultaneously raise the wholesale price of inputs and cut the retail price of the finished good. This will have the effect of “squeezing” the profit margins of any competitors in the retail market. Those firms will have to pay more for the inputs they need; at the same time, they will have to cut their retail prices to match the other firm?s prices. The question before us is whether such a price-squeeze claim may be brought under §2 of the Sherman Act when the defendant is under no antitrust obligation to sell the inputs to the plaintiff in the first place. We hold that no such claim may be brought.

Previous AR coverage is here and here.

Full post as published by Antitrust Review on February 25, 2009 (boomark / email).