I. ANTITRUST INJURY AND ANTITRUST STANDING
Text 92-107, 111-15, 122-32
Generally, there are 3 enforcement mechanisms: Justice Department, FTC, and Private Causes of Action.
Justice Dept.
Exclusive authority to enforce the criminal provisions of the antitrust laws. In addition, DOJ can obtain civil remedies, and may sue for damages in behalf of the US.
FTC
Express authority to enforce § 5 of the FTC Act (which forbids unfair methods of competition) as well as the Clayton Act. However, the scope of § 5 of the FTC Act covers any antitrust violation. FTC thus effectively has the authority to enforce all antitrust laws – only FTC may enforce § 5 of FTC Act.
Private Causes of Action
Private suits are met with general Skepticism; among other things:
They outnumber govt suits 10:1
Competitors have perverse incentives
Treble damages and vagueness of the rules leads to overdeterrence
Enforcement costs and procompetitive side effects from anticompetitive conduct must also be taken into account
Thus, for a private CoA, there are three limiting doctrines that serve as threshold requirements: the Antitrust Injury Requirement, Antitrust Standing Requirement, and Direct Purchaser Requirement.
Antitrust Injury Requirement:
Clayton Act § 4: Any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor…and shall recover threefold damages by him sustained, and the cost of suit, including reasonable attorney’s fee.
Plaintiff must show that it was injured by the anticompetitive consequences of antitrust violation. Thus, it is insufficient to show that Plaintiff was injured by an antitrust violation – it must show injury by anticompetitive consequences of that violation.
Brunswick v. Pueblo Bowl-o-Mat(US 1977) – Merger action brought by competitor of acquired firm. Before merger, P and acquired firm had been struggling small bowling alleys in a medium sized community. Brunswick purchased struggling bowling centers that it supplied (vertical integration) – P complains that Brunswick caused its competitors to thus stay in business, resulting in its harm. P would have become monopolist or had far larger market share had the merger not occurred – it sues for damages for loss of additional business.
SC observed that plaintiff was actually complaining that the market was more competitive. SC dismissed complaint because P had not suffered “antitrust injury,” even though it clearly had suffered some kind of injury.
Mere proof of antitrust violation not e
Atlantic Richfield Co. v. USA Petrolium (US 1990) – USA sells discount gas, ARCO agrees with its dealers to reduce price. ARCO determines maximum price – maximum retail price maintenance was illegal per se until 1997. Here, there was no allegation that the prices were preadatory.
SC held that competitor lacked antitrust injury to complain of maximum resale price maintenance imposed on its rival, even though the maximum RPM was illegal per se. Court noted that in this case, the P was complaining about competitor’s low price, that there was no evidence of predatory pricing, and as a result, granting P’s relief would result in a less competitive rather than more competitive market.
No antitrust injury to USA Petroleum – the conduct can simultaneously create pro-and anti-competitive effects. USA is complaining about pro-competitive effects
Maximum RPM is illegal to protect small ARCO dealers from being squeezed out
If ARCO dealers squeezed out, plan helps USA, if not plan benefits ARCO dealers.
