Antitrust Supreme Court Cases

Sometimes known as the Gilded Age, the late 19th century saw the rise of big business in the United States. “Titans of industry” accumulated vast wealth as their companies threatened to monopolize key sectors of the economy. Responding to this concern, Congress enacted the Sherman Antitrust Act in 1890. The Sherman Act sought to preserve competition in the market by forbidding monopolies and other business practices that restrain trade. Some restraints are blatantly anti-competitive, such as price fixing and market allocation. These are considered “per se” violations of the Sherman Act. Other alleged restraints are analyzed under the “rule of reason” to determine whether they unreasonably restrict trade.

In 1914, Congress passed the Federal Trade Commission Act. This created the FTC, which is the main federal agency in this area. The law also generally banned unfair methods of competition and unfair or deceptive acts or practices. Any conduct that violates the Sherman Act violates the Federal Trade Commission Act as well. Thus, while the FTC enforces only the Federal Trade Commission Act, the agency secures the protections provided by both laws.

Another notable antitrust law, also passed in 1914, is the Clayton Antitrust Act. This built on the Sherman Act by prohibiting certain practices that were not clearly covered by the earlier law. For example, Section 7 of the Clayton Act forbids mergers and acquisitions that harm competition or create a monopoly. The law also provides a private right of action based on violations of the Sherman Act or the Clayton Act. Individuals and businesses affected by a violation can sue for triple damages and seek an order against the unlawful practice.

Below is a selection of Supreme Court cases involving antitrust law, arranged from newest to oldest.

NCAA v. Alston (2021)

The NCAA is not immune from the Sherman Act because its restrictions happen to fall at the intersection of higher education, sports, and money.

Ohio v. American Express Co. (2018)

Evidence of a price increase on one side of a two-sided transaction platform cannot by itself demonstrate an anti-competitive exercise of market power.

North Carolina Board of Dental Examiners v. FTC (2015)

A non-sovereign actor controlled by active market participants enjoys state action antitrust immunity only if the challenged restraint is clearly articulated and affirmatively expressed as state policy, and the policy is actively supervised by the state.

FTC v. Actavis, Inc. (2013)

Reverse payment settlement agreements should be reviewed under the rule of reason.

American Needle, Inc. v. NFL (2010)

Each NFL team is a substantial, independently owned, and independently managed business, and the teams' objectives are not common. When the teams formed an entity to develop, license, and market their intellectual property, that entity’s decisions about licensing the teams’ separately owned intellectual property were concerted activity and covered by Section 1 of the Sherman Act.

Pacific Bell Telephone Co. v. linkLine Communications, Inc. (2009)

When there is no duty to deal at the wholesale level and no predatory pricing at the retail level, a firm is not required to price both of these services in a manner that preserves its rivals’ profit margins.

Leegin Creative Leather Products, Inc. v. PSKS, Inc. (2007)

Vertical price restraints should be judged by the rule of reason.

Bell Atlantic Corp. v. Twombly (2007)

Stating a claim under Section 1 of the Sherman Act requires a complaint with enough factual matter (taken as true) to suggest that an agreement was made. Asking for plausible grounds to infer an agreement calls for enough fact to raise a reasonable expectation that discovery will reveal evidence of an illegal agreement.

Illinois Tool Works, Inc. v. Independent Ink, Inc. (2006)

A patent does not necessarily confer market power on the patentee. Therefore, in any case involving a tying arrangement, the plaintiff must prove that the defendant has market power in the tying product.

Texaco, Inc. v. Dagher (2006)

It is not per se illegal under Section 1 of the Sherman Act for a lawful, economically integrated joint venture to set the prices at which it sells its products.

Verizon Communications, Inc. v. Law Offices of Curtis V. Trinko, LLP (2003)

There are few exceptions from the proposition that there is no duty to aid competitors.

California Dental Ass’n v. FTC (1999)

An abbreviated or “quick look” analysis is appropriate when an observer with even a rudimentary understanding of economics could conclude that the arrangements in question have an anti-competitive effect on customers and markets.

Brown v. Pro Football, Inc. (1996)

When football team owners had bargained with the players’ union over a wage issue until they reached an impasse, and the owners then agreed among themselves (but not with the union) to implement the terms of their own last best bargaining offer, federal labor laws shielded such an agreement from antitrust attack.

Brooke Group Ltd. v. Brown & Williamson Tobacco Corp. (1993)

A claim of primary-line competitive injury under the Robinson-Patman Act has the same general character as a predatory pricing claim under Section 2 of the Sherman Act. In either case, a plaintiff must prove that the prices at issue are below an appropriate measure of its rival’s costs, and the competitor had a reasonable prospect of recouping its investment in below-cost prices.

Eastman Kodak Co. v. Image Technical Services, Inc. (1992)

A defendant’s lack of market power in the primary equipment market did not preclude, as a matter of law, the possibility of market power in derivative aftermarkets.

Palmer v. BRG of Georgia, Inc. (1990)

Agreements between competitors to allocate territories to minimize competition are illegal, regardless of whether the parties split a market within which they both do business or merely reserve one market for one and another for the other.

FTC v. Superior Court Trial Lawyers Ass’n (1990)

An agreement was not outside the coverage of the antitrust laws simply because its objective was the enactment of favorable legislation.

FTC v. Indiana Federation of Dentists (1986)

Without a countervailing pro-competitive virtue, a horizontal agreement among members of a professional organization to withhold from their customers a particular service that they desire cannot be sustained under the rule of reason.

Matsushita Electrical Industrial Co., Ltd. v. Zenith Radio Corp. (1986)

To survive a motion for summary judgment, a plaintiff seeking damages for a violation of Section 1 of the Sherman Act must present evidence that tends to exclude the possibility that the alleged conspirators acted independently.

Aspen Skiing Co. v. Aspen Highlands Skiing Corp. (1985)

Although even a firm with monopoly power has no general duty to engage in a joint marketing program with a competitor, the absence of an unqualified duty to cooperate does not mean that every time that a firm declines to participate in a particular cooperative venture, that decision may not have evidentiary significance or may not give rise to liability in certain circumstances.

Northwest Wholesale Stationers, Inc. v. Pacific Stationery & Printing Co. (1985)

A plaintiff seeking the application of the per se rule must present a threshold case that the challenged activity falls into a category likely to have predominantly anti-competitive effects.

NCAA v. Board of Regents of University of Oklahoma (1984)

A per se rule was not applied to an NCAA television plan that constituted horizontal price-fixing and output limitation, even though these restraints normally would be illegal per se, since this case involved an industry in which horizontal restraints on competition are essential if the product is to be available at all. (However, the plan still violated Section 1 of the Sherman Act under the rule of reason.)

Jefferson Parish Hospital District No. 2. v. Hyde (1984)

Tying arrangements need only be condemned if they restrain competition on the merits by forcing purchases that would not otherwise be made. A lack of price or quality competition does not create this type of forcing.

Arizona v. Maricopa County Medical Society (1982)

Horizontal agreements to fix maximum prices are on the same legal footing as agreements to fix minimum or uniform prices.

Catalano, Inc. v. Target Sales, Inc. (1980)

An agreement among competing wholesalers to refuse to sell unless the retailer makes payment in cash in advance or upon delivery is a form of price fixing and is plainly anti-competitive. Thus, it is conclusively presumed illegal without further examination under the rule of reason.

Broadcast Music, Inc. v. CBS, Inc. (1979)

The issuance of blanket licenses by performance rights organizations does not constitute price fixing that is per se unlawful under the antitrust laws.

National Society of Professional Engineers v. U.S. (1978)

The rule of reason, under which the proper inquiry is whether the challenged agreement promotes or suppresses competition, does not support a defense based on the assumption that competition itself is unreasonable.

Continental T.V., Inc. v. GTE Sylvania, Inc. (1977)

When anti-competitive effects are shown to result from particular vertical restrictions, they can be adequately policed under the rule of reason. (This case concerned only non-price vertical restrictions.)

Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc. (1977)

For plaintiffs in an antitrust action to recover treble damages on account of violations of Section 7 of the Clayton Act, they must prove an injury of the type that the antitrust laws were intended to prevent and that flows from that which makes the defendants’ acts unlawful. The injury must reflect the anti-competitive effect of either the violation or anti-competitive acts made possible by the violation.

Flood v. Kuhn (1972)

The longstanding exemption of professional baseball from the antitrust laws is an established aberration in light of the Court’s holding that other interstate professional sports are not similarly exempt. However, Congress has acquiesced in the exemption, and it is entitled to the benefit of stare decisis.

U.S. v. Topco Associates, Inc. (1972)

A scheme of allocating territories to minimize competition at the retail level was found to be a horizontal restraint constituting a per se violation.

Brown Shoe Co., Inc. v. U.S. (1962)

A merger must be functionally viewed in the context of its particular industry. Factors to consider include whether the consolidation will take place in an industry that is fragmented rather than concentrated, whether the industry has seen a recent trend toward domination by a few leaders or has remained consistent in its distribution of market shares, whether the industry has experienced easy access to markets by suppliers and easy access to suppliers by buyers or has witnessed foreclosure of business, and whether the industry has witnessed the ready entry of new competition or the erection of barriers to prospective entrants.

Klor’s, Inc. v. Broadway-Hale Stores, Inc. (1959)

A group boycott is not to be tolerated merely because the victim is only one merchant, whose business is so small that their destruction makes little difference to the economy.

International Boxing Club v. U.S. (1959)

Championship boxing is the “cream” of the boxing business and is a sufficiently separate part of the trade or commerce to constitute the relevant market for Sherman Act purposes.

U.S. v. E.I. du Pont de Nemours & Co. (1956)

The ultimate consideration in determining whether an alleged monopolist violates Section 2 of the Sherman Act is whether it controls prices and competition in the market for such part of trade or commerce as it is charged with monopolizing.

Lorain Journal Co. v. U.S. (1951)

A single newspaper, already enjoying a substantial monopoly in its area, violates the “attempt to monopolize” clause of Section 2 of the Sherman Act when it uses its monopoly to destroy threatened competition.

U.S. v. Paramount Pictures, Inc. (1948)

Vertical integration of producing, distributing, and exhibiting motion pictures is not illegal per se. Its legality depends on the purpose or intent with which it was conceived, or the power that it creates and the attendant purpose or intent.

Fashion Originators’ Guild of America v. FTC (1941)

A practice short of a complete monopoly that tends to create a monopoly and deprive the public of the advantages from free competition in interstate trade offends the policy of the Sherman Act.

U.S. v. Socony-Vacuum Oil Co., Inc. (1940)

Agreements to fix prices in interstate commerce are unlawful per se under the Sherman Act, and no showing of so-called competitive abuses or evils that the agreements were designed to eliminate or alleviate may be interposed as a defense.

Interstate Circuit, Inc. v. U.S. (1939)

To establish an unlawful agreement to restrain commerce, the government can rely on inferences drawn from the course of conduct of the alleged conspirators.

Federal Baseball Club of Baltimore, Inc. v. National League of Professional Baseball Clubs (1922)

The business of providing public baseball games for profit between clubs of professional baseball players is not within the scope of the federal antitrust laws.

Chicago Board of Trade v. U.S. (1918)

The true test of legality is whether a restraint merely regulates and perhaps thereby promotes competition, or whether it may suppress or even destroy competition. To determine that question, a court must consider the facts peculiar to the business, its condition before and after the restraint was imposed, the nature of the restraint, and its effect, actual or probable. The history of the restraint, the evil believed to exist, the reason for adopting the particular remedy, and the purpose or end sought to be attained are all relevant facts.

Eastern States Retail Lumber Ass’n v. U.S. (1914)

When, in this case, by concerted action, the names of wholesalers who were reported as having made sales to consumers were periodically reported to the other members of the associations, the conspiracy to accomplish that which was the natural consequence of such action could be readily inferred.

U.S. v. American Tobacco Co. (1911)

The public policy manifested by the Sherman Antitrust Act is expressed in such general language that it embraces every conceivable act that can possibly come within the spirit of its prohibitions, and that policy cannot be frustrated by resort to disguise or subterfuge.

Standard Oil Co. of New Jersey v. U.S. (1911)

The Sherman Antitrust Act should be construed in the light of reason. As so construed, it prohibits all contracts and combinations that amount to an unreasonable or undue restraint of trade in interstate commerce.

Loewe v. Lawlor (1908)

A combination may be in restraint of interstate trade and within the meaning of the Sherman Antitrust Act even when the persons exercising the restraint are not engaged in interstate trade, and some of the means employed are acts within a state and individually beyond the scope of federal authority.

Swift & Co. v. U.S. (1905)

Even if the separate elements of a scheme are lawful, when they are bound together by a common intent as parts of an unlawful scheme to monopolize interstate commerce, the plan may make the parts unlawful.

U.S. v. E.C. Knight Co. (1895)

The monopoly and restraint denounced by the Sherman Antitrust Act are a monopoly in interstate and international trade or commerce, but not a monopoly in the manufacture of a necessity of life.