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Antitrust Law: Research Problem #1

A Guide to the Laws and Decisions which Restrict Restraint on Trade

Research Problem #1

You are an associate for a corporation trying to break its way into xylophone industry. The corporation's name is Tune Party. Tune Party is unable to match the prices that the other corporations in the xylophone industry are setting, and as such is having trouble staying in business. The price of these other corporations are more or less equivalent to each other, and Tune Party has a suspicion that they be colluding to fix them. To that end, Tune Party wants to sue these other corporations for an antitrust violation. It needs to know what it would need to show in order to make a prima facie claim, and want you to find out from them. How do you begin?

 

Research Strategy

1. Find out whether colluding with other corporations to fix-prices is an antitrust violation. Try looking at practice guides and reading summaries of the antitrust acts to begin. If you are very unfamiliar with antitrust jargon, you might even consider googling keywords just to uncover the basics.

2. If so, figure out what exactly Tune Party must allege in order to make a case for an antitrust violation. Use the information you've found in practice guides, to do specific case searches. Treatises which address in detail your specific antitrust violation might be helpful to you. Find parties that have plead similar violations and measure their success. 

Research Starting Points

1) Check of the Antitrust Law Handbook on Westlaw. There are similar handbooks on the other legal services. This will give you a broad overview of what it takes to make an antitrust claim. Find a violation that sounds similar to the one Tune Party is alleging, and read the elements.
 
2) Move from the Antitrust Law Handbook to something more in depth. Areeda and Hovenkamp's An Analysis of Antitrust Principles and their Applications  provides an thorough analysis of each of the antitrust violations. In addition, you'll find reference to case there that will help you get a better idea of what Tune Party needs to prove. 
 

Answer

You should find out pretty quickly that horizontal price fixing is a per se violation of the Sherman Act. If Tune Party can prove that's what its competitors are doing, it will be able to make a prima facie case of an antitrust violation. However, pleading standards are diverse. The case of Bell Atlantic Corp v. Twombly raised the pleading standard from that of 'possibility' to 'plausibility,' but the interpretation of that decision varies from circuit to circuit. Take time to find out where Tune Party plans to bring its claim and research cases in that circuit.