Date01 September 2017
Published date01 September 2017
Subject MatterArticles
A New Learning?
Robert F. Lanzillotti*
Ever since the U.S.Supreme Court opinion in Matsushita, various U.S.district courts have issued a series
of rulings that appear to constitutea new learning on the economics of collusive behavior andto elevate
the economic evidentiary bar for successfu l proof of price-fixi ng and bid-rigging. T he rulings use game
theory constructs expressed as pure, interdependent behavior that theoretically can result in supra-
competitive prices in the absence of any agreement. The most recent explanation of this learning is
contained in the 2016 titanium dioxide (TiO2) opinion Valspar v. E. I. DuPont, which raises the bar for
proving a Sherman Act Sec. 1 violation. This and earlier rulings appear counterintuitive when their
reasoning is tested against the context of Judge Richard Posner’s opinion on the value of circumstantial
evidence in High FructoseCorn Syrup and In re TextMessaging. This article identifies market structureand
behavioral features typically found in cartel arrangements, and tests theefficacy of what is perceived as a
new learning on collusion/competition with empirical data from twelve alleged price-fixing conspiracies
successfully litigated over the past two decades.
Economic characteristics of collusive behavior
For many years, the U.S. Supreme Court and federal district courts seemed undaunted in making
inferences regarding the existence of illegal price-fixing agreements from circumstantial economic
evidence. At least that was the case up until Matsushita,
which essentially adopted defense conten-
tions that circumstantial evidence was ambiguous—that is, was consistent with two or more inter-
pretations—and thus should not be taken at face value. The opinion has generally been regarded as an
artifact, unique to the unusual nature of the complaint (an alleged agreement among foreign companies
not to raise,but rather to sell, electronics products in the U.S. at low, predatory prices).
Nonetheless, over the past two decades the ambiguity language in Matsushita has been followed by
a series of opinions in Section 1 Sherman Act cases that appear to proclaim a new learning on the
University of Florida, Info Tech, Inc., Gainesville, FL, USA
Corresponding Author:
Robert F. Lanzillotti, Infotech, Inc., 2970 SW 50th Terrace, Gainesville, FL 32608, USA.
1. See Matsushita Elec. Indus Co. v. Zenith Radio Corp., 475 U.S. 574, 588–97 (1986).
The Antitrust Bulletin
2017, Vol. 62(3) 591-602
ªThe Author(s) 2017
Reprints and permission:
DOI: 10.1177/0003603X17719765

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