Issues Related to Nonprice Agreements

• Pages: 173-187

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CHAPTER VIII

ISSUES RELATED TO NONPRICE AGREEMENTS

Antitrust concerns may arise even with respect to agreements that do

not specifically relate to price. For instance, when competitors agree

with each other to exclude competition, such as by agreeing not to deal

with third parties or to establish industry standards that act to deprive

third parties of the ability to compete, antitrust laws may be i mplicated.

Similar concerns arise if competitors agree to divide or allocate markets.

Exclusive dealing agreements and tying arrangements between entities at

different levels of the manufacturing chain also attract antitrust scrutiny.

This chapter examines each of these types of nonprice agreements and

the manner in which they have been analyzed in the energy industry.

A. Joint Conduct to Exclude Competition

1. Refusals to Deal

Agreements among competitors to refrain from dealing with other

competitors, customers, or suppliers—referred to as “concerted refusals

to deal” or “group boycotts”—historically were prohibited as per se

violations of Section 1 of the Sherman Act.

1

More recently, however,

courts have been more receptive to arguments that certain concerted

refusals to deal should be analyzed under the rule of reason.

In Northwest Wholesale Stationers v. Pacific Stationery & Printing

Co.,

2

the Supreme Court declined to apply the per se rule to the expulsion

of a member by a wholesale purchasing cooperative, noting that “‘there

1. For example, in Klor’s, Inc. v. Broadway-Hale Stores, 359 U.S. 207

(1959), the Supreme Court held that an alleged conspiracy between a

retail appliance store (Broadway-Hale) and appliance manufacturers not

to sell products to the plaintiff (a competing retail store) at competitive

prices warranted condemnation regardless of any effect on c ompetition.

The Court reasoned that “[g]roup boycotts, or concerted refusals by

traders to deal with other traders, have long been held to be in the

forbidden category. They have not been saved b y allegations that they

were reasonable in the spec ific circumstances . . . .” Id. at 212 (footnote

omitted).

2. 472 U.S. 284 (1985).