No. 337–TA-1002, Commission Opinion (Mar. 19, 2018).2 Atl. Richfield Co. v. USA Petroleum Co., 495 U.S. 328, 339 (1990) (“ARCO”).3 Certain Carbon and Alloy Steel Products at 17 (citing ARCO at 344).4 Id.5 Id.6 Id. at 18 (citing Brooke Grp., Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 222-24 (1993)).7 Id. at 37.
Such discounts are recognized as netting benefits for consumers unless the discount renders prices so low that they run afoul of the test outlined for predatory pricing. Courts evaluating loyalty discounts therefore typically use the framework set forth in the guiding U.S. Supreme Court case on predatory pricing, Brooke Group Ltd. v. Brown & Williamson Tobacco Corp, 509 U.S. 209 (1993). Under Brooke Group, a plaintiff must prove (1) “that the prices complained of are below an appropriate measure of its rival’s costs[,]” and (2) “that the competitor had a reasonable prospect...or dangerous probability of recouping its investment in below-cost prices.”
The value that index funds provide investors is low-cost diversification: a single index fund might invest in hundreds or even thousands of separate securities, depending on the index to which the fund adheres. And because the day-to-day management of an index fund can be handled by computers, index funds tend to have low management fees.32See S&P U.S. Indices Methodology (Feb. 2017), available at http://us.spindices.com/documents/methodologies/methodology-sp-us-indices.pdf?force_download=true.33But see Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 238 (1993) (oligopoly pricing is unlikely to succeed in an industry facing declining demand and excess capacity).34 Edward Dufner, American Airlines to Join S&P 500 in Comeback Sign for Industry, BLOOMBERG (Mar. 16, 2015).35Id.; United Continental Finally Makes its Way to the S&P 500, FORBES (Sept. 1, 2015).36 Maria Armental, Alaska Air to Replace SanDisk in S&P 500, WALL STREET JOURNAL (May 10, 2016).37 As of this writing, the Vanguard 500 Index Fund Investor Shares (ticker symbol: VFINX) has over $290 billion in assets under management, while State Street’s SPDR S&P 500 exchange traded fund (ticker symbol: SPY) has over $230 billion. See Vanguard 500 Index Fund Investor Shares, available at https://personal.vanguard.com/us/funds/snapshot?FundId=0040&FundIntExt=INT; State Street Global Advisors SPDR S&P 500 ETF, available at https://us.spdrs.com/en/product/fund.seam?ticker=SPY.38See JETS, U.S. Global Jets ETF, available at http://www.usglobaletfs.com/jets_fund.html.39See generally FTC Commissio
Soc’y, 457 U.S. 332, 346 (1982)). The antitrust laws encouraged vigorous price competition by Amazon (p. 97, citing Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209 (1993); cf. Cargill, Inc. v. Monfort of Colorado, Inc., 479 U.S.104, 116 (1986) (“[I]t is in the interest of competition to permit dominant firms to engage in vigorous competition, including price competition.” [Citation omitted]).
Meritor further alleged that the supply agreements provided for preferential pricing and product placement, requiring that Eaton’s transmissions be the truck manufacturer’s lowest priced transmission and/or its standard or default transmission.1 After a four-week trial, a jury found that Eaton’s conduct violated Section 1 and Section 2 of the Sherman Act, and Section 3 of the Clayton Act. Following the verdict, Eaton moved for judgment as a matter of law, arguing that the supply agreements were legal under the ‘price-cost’ test of Brook Group v. Brown & Williamson Tobacco Corp., 509 U.S. 209 (1993). Under Brooke Group, low prices are not unlawful unless they are below an appropriate measure of the defendant’s costs.
In addition, the majority rejected the defendant’s argument that its market-share discount contracts did not violate the antitrust laws because its prices were always above cost. In Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209 (1993), the Supreme Court held that a defendant’s pricing practices for a specific product cannot violate the antitrust laws if the prices are above cost. The Third Circuit held that this principle applies only when “price is the clearly predominant method of exclusion.”
Following the Court's grant of certiorari, LinkLine—perhaps sensing an unwinnable battle before the high court —took an unconventional approach by asking the Court to vacate the 9th Circuit Court of Appeals' decision (which held in its favor) and for permission to amend its complaint in order to assert a claim of “predatory pricing” apart from its price-squeeze theory claim. In Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209 (1993) (“Brooke Group”), the Supreme Court established two requirements for a predatory pricing claim: (1) below-cost retail pricing and (2) a “dangerous probability” that the defendant will recoup any lost profits. Before the Supreme Court, LinkLine took the position that its claims must meet the Brooke Group test.
In Pacific Bell Telephone Co. v. Linkline Communications Inc., 2009 U.S. Lexis 1635, 555 U.S. ______ (February 25, 2009) ("Linkline"), the U.S. Supreme Court, mostly following its decision in Verizon Communications, Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398 (2004) ("Trinko"), held that a plaintiff cannot bring a valid “price-squeeze” claim under Section 2 of the Sherman Act where (1) the monopolist owes no "antitrust duty" to deal with the plaintiff being “squeezed”, and (2) the monopolist’s sales into the downstream market at retail are not below an "appropriate measure of its rival’s cost," as defined by the Supreme Court in its decision in Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 222-224 (1993) ("Brooke Group").The unaddressed “elephant in the room” is the question of when a monopolist has a unilateral antitrust duty to deal in the upstream market.
Ed. 2002).Once the wholesale pricing issue is removed, then plaintiff does not have an antitrust claim unless it can show that the retail prices are predatory within the meaning of Brooke Group v. Brown & Williamson Corp., 509 U.S. 209 (1993).Since plaintiffs did not allege that defendant had market power in the retail DSL market, that its retail prices were below cost, or that defendant could recoup its losses after a period of predation, it could not satisfy the Brooke Group standards and the Complaint should be dismissed.The defendants did file a petition for certorari with the Supreme Court on October 17, 2007.
On appeal, 3M argued that its rebate structure was legal as a matter of law because it never priced below cost. 3M relied heavily on Brooke Group v. Brown & Williamson, 509 U.S. 209 (1993), which held that a predatory-pricing claim in a single-product case required below-cost pricing coupled with the likelihood of recoupment of its losses after the period of predation.The 3rd Circuit rejected the analogy to Brooke Group, stating that it did not involve the bundling issue and should not apply to cases in which the defendant had monopoly power and thus could recoup its losses readily. Instead, it permitted the jury to find an antitrust violation when a bundled rebate is offered by a monopolist and thus forecloses portions of the market to a competitor that does not offer the full range of products.Citing the recent report by the bipartisan Antitrust Modernization Commission, the court criticized the Le Page’s rule as protecting a less-efficient competitor at the expense of consumer welfare.The Supreme Court, according to the 9th Circuit, has emphasized repeatedly that antitrust law should protect competition, not competitors.