Antitrust and Unfair Competition Law

Competition: Spring 2014 Vol. 23, No. 1



By Ara Jabagchourian*

I. Introduction

The courts have long recognized that horizontal collusion in the marketplace creates a significant risk of harm to competition. Anticompetitive conduct in the form of price collusion, market division, bid-rigging, or output restriction is treated under the per se rule because of the likelihood such conduct will result in higher prices or diminished product quality. Despite these harmful consequences on the economy and consumer welfare, proof of collusion under antitrust law faces a number of hurdles. Some of those hurdles have been created by appellate decisions that have wrongly interpreted Matsushita as raising the standard to prove that an economically sensible and anticompetitive conspiracy took place.

Courts have held that direct evidence alone, such as admissions by a defendant or a document, may establish an agreement.1 Without either a confession or a Federal Bureau of Investigation hidden camera videotaping a meeting where the rivals agree to set prices or divide the market, however, plaintiffs must rely on circumstantial evidence to prove an agreement.2 Courts have recognized that "[o]nly rarely will there be direct evidence of an express agreement" in a conspiracy case,3 and have found that circumstantial evidence of informal and even tacit understandings may suffice to establish a violation of Section 1.4 A reliance on circumstantial evidence complicates the question of how much circumstantial evidence and of what nature is necessary to overcome a defendant’s motion for summary judgment.

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