![]() In that case, a cigarette manufacturer brought an antitrust action against a competitor, alleging violation of the Robinson-Patman Act because of its below-cost sales of generic cigarettes through discriminatory volume rebates. at 542.Īlmost 40 years after the Theatre Enterprises decision, the Supreme Court returned to the topic of tacit collusion in Brooke Group. The Court then held that the “crucial question” related to the factual issue of whether there was a conspiracy and that the question had been properly submitted to the jury by the trial court. but conscious parallelism has not yet read conspiracy out of the Sherman Act entirely.” Id. In dicta, the Supreme Court found that it “has never held that proof of parallel business behavior conclusively establishes agreement, or, phrased differently, that such behavior itself constitutes a Sherman Act offense. The Court determined the “crucial question” was whether the conduct “stemmed from independent decision” by Paramount or “from an agreement, tacit or express” among Paramount and the other movie producers and distributors. Paramount Film Distribution Corp., a suburban theater owner brought an action against Paramount, alleging violations of Sections 4 and 16 of the Clayton Act based on claims that Paramount conspired with Twentieth Century-Fox, Warner Brothers, and other movie producers and distributors to restrict “first run” movie pictures to downtown Baltimore and leave suburban theaters with only “subsequent runs.” 346 U.S. In the 1954 Supreme Court case addressing conscious parallelism in relation to Sherman Act claims, Theatre Enterprises v. And amid increased interest in aggressive antitrust enforcement and nontraditional theories of harm, there are open questions as to how legislators, enforcers, and courts will consider and treat claims of tacit collusion and conscious parallelism in the future. Technological advances, such as algorithmic pricing, have facilitated new forms of tacit collusion. That Text Messaging opinion is now one of the most widely cited cases on tacit collusion in U.S. Particularly illustrative of this is famed antitrust jurist Richard Posner’s opinion in 2015 holding that tacit collusion is not a violation of the Sherman Act and “probably shouldn’t be.” In re Text Messaging Antitrust Litigation, 782 F.3d 867, 874 (7th Cir. Today’s treatment of tacit collusion follows decades of evolving debate in academia and courts. Brown & Williamson Tobacco Corp., 509 U.S. Indeed, the Supreme Court has defined “tacit collusion, sometimes called oligopolistic price coordination or conscious parallelism” as “the process, not in itself unlawful, by which firms in a concentrated market might in effect share monopoly power, setting their prices at a profit-maximizing, supracompetitive level by recognizing their shared economic interests and their interdependence with respect to price and output decisions.” Brooke Grp. law, tacit collusion does not give rise to an antitrust violation without additional conduct evidencing an agreement between competitors. Whether tacit collusion-where firms effectively behave as though they are colluding without any direct communication expressing agreement-should give rise to an antitrust violation has long been a contested issue in the United States, with legal opinions varying and evolving over time.
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