Concerted Actions

An agreement or conspiracy between or among co mpetitors with the
sole or principal effect of limiting competition among them along any
parameteron price, terms, output, or product quality, either generally
or with respect to a specific customeris subject to antitrust liability
under Section 1 of the Sherman Act.
Conspiracies among competitors to
fix prices, bids, output, or markets are considered “the supreme evil of
antitrust” and subject to both civil and criminal prosecution under
Section 1 of the Sherman Act.
This chapter provides an overview of
antitrust treatment of these types of agreements among competitors.
A. Agreements among Competitors Affecting Price
Section 1 of the Sherman Act
prohibits “[e]very contract,
combination in t he form of trust or otherwise, or conspiracy, in restraint
of trade or commerce among the several States, or with foreign nations.”
In other words, Section 1 prohibits agreements that unreasonably restrain
competition. Section 5 of the Federal T rade Commission Act
al so
prohibits these agreements as “unfair methods of competition.”
The Sherman Act prohibits not only explicit agreements, but also
informal agreements among competitors. However, mere parallel
conduct does not constitute an unlawful conspiracy.
“[T]here must be
direct or circumstantial evidence that reasonably tends to prove that [the
. 15 U.S.C. § 1.
. Verizon Comm. v. Law Offices of Curtis V. Trinko, LLP , 540 U.S. 398,
408 (2004); T homas O. Barnett, Ass’t Att’y Gen., Criminal Enforcement
of Antitrust Laws: The U.S. Model, Presented at the Fordham
Competition Law Institute’s Annual Conference on International
Antitrust Law & Policy (Sept. 14, 2006), available at
. 15 U.S.C. § 1.
. 15 U.S.C. § 45.
. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 554 ( 2007) (citing Theatre
Enters. v. Paramount Film Distrib. Corp., 346 U.S. 537, 540-41 (1954)).
52 Energy Antitrust Handbook
parties] had a conscious commitment to a common scheme designed to
achieve an unlawful objective.”
Illegality Assessed under the Per Se Rule
Although some agreements require a detailed economic analysis to
determine their competitive consequences, naked agreements among
competitors to restrain price competition have long been illegal per se
that is, these agreements are deemed illegal without an assessment of the
economic consequences of the agreement.
The Supreme Court has emphasized that restrictions on free and
open price competition pose an “actual or potential threat to the central
nervous system of the economy.”
Therefore, agreements among
competitors to raise, lower, stabilize, or otherwise set or determine prices
are per se unlawful.
Under this per se rule, agreements between
competitors to fix prices are conclusively presumed to be unlawful
without any inquiry into their competitive effects, the agreeing parties’
intent (except in criminal cases), or whether the prices agreed to were
“reasonable” or otherwise set at allegedly appropriate levels.
In its most blatant and obvious form, price fixing is an agreement
setting the price of a product t hat two or more independent companies
otherwise would sell in competition with each other. Price fixing has
long been broadly defined, however, to include any agreement that has
the effect of “raising, depressing, fixing, pegging, or stabilizing the
With deregulation of the energy industry, price fixing and other
forms of collusion can occur: “[w]hile firms under regulation may be
used to coordinated pricing and tactics that restrict entry, such practices
may be illegal under competition. Firms in recently deregulated
industries may be especially susceptible to relapses into problematic
. Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 768 (1984); see
also Borough of Lansdale v. PP&L, Inc., 426 F. Supp. 2d 264, 276 (E.D.
Pa. 2 006) (hold ing that unlawful horizontal agreements require a “unity
of purpose or a common design and understanding or a meeting of minds
or a conscious commitment to a common scheme”) (internal quotation
marks omitted).
. United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 224-26 n.59
. Id.
. Id. at 223.

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