Pennsylvania
| Pages | 2081-2115 |
Pennsylvania 41-1
PENNSYLVANIA
1. Introduction
1.a. Overview
Pennsylvania has no general antitrust statute. The Pennsylvania Unfair Trade
practices and Consumer Protection Law prohibits “unfair methods of competition,”
which are limited by definition to conduct involving misrepresentation, deception, or
fraud.1
Pennsylvania’s Antibid-Rigging Act applies to government contracts and
subcontracts and provides for civil and criminal penalties, governmental recovery of
treble damages, and suspension or debarment sanctions.2Its Unfair Sales Act
prohibits below-cost sales under certain circumstances.3Pennsylvania also has
specific antitrust statutes relating to practices involving gasoline and motor vehicle
accessories,4motion pictures,5and insurance.6
Other restraints of trade are governed by common law rules under which
agreements that unreasonably restrain trade are against public policy and therefore
are unenforceable.7Reasoning that the Sherman Act8is “merely the application of
the common law doctrine concerning the restraint of trade to the field of interstate
commerce,” courts applying Pennsylvania law have looked to federal antitrust
decisions for guidance in defining unreasonable restraints of trade.9
1. 73 PA. STAT. ANN. § 201-2(4).
2. 62 PA. CONS. STAT. ANN. §§ 4501-4509. This statute was a compromise resulting
from efforts to enact a general antitrust statute. See discussion in part 1.c of this
chapter.
3. 73 PA. STAT. ANN. §§ 211-17. The Unfair Sales Act is discussed in part 13 of this
chapter.
4. 73 PA. STAT. ANN. §§ 202-1 to -8 (prohibiting coercion and unfair termination).
5. 73 PA. STAT. ANN. §§ 203-1 to -11 (prohibiting blind bidding, minimum guarantee
payments, and advances; restricting exclusive first-run agreements; and setting
requirements for bidding procedures). Section 203-7, prohibiting exclusive first-run
licensing agreements for longer than 42 days, is preempted by the Federal Copyright
Act, 17 U.S.C. § 106. Orson, Inc. v. Miramax Film Corp., 189 F.3d 377, 386-87
(3d Cir. 1999) (en banc).
6. 40 PA. STAT. ANN. §§ 1171.11, .13-.15 (prohibiting unfair methods of competition).
7. See, e.g., Gulf Oil Corp. v. Mays, 164 A.2d 656 (Pa. 1960); Schwartz v. Laundry &
Linen Supply Drivers Union Local 187, 14 A.2d 438 (Pa. 1940); Phila. Cleaners &
Dyers Ass’n v. Dollar Cleaners & Dyers, Inc., 19 Pa. D. & C. 327 (C.P. 1933).
8. 15 U.S.C. §§ 1-7.
9. See Alvord-Polk, Inc. v. F. Schumacher & Co., 37 F.3d 996, 1014 (3d Cir. 1994);
Intervest Fin. Servs. v. S.G. Cowen Sec. Corp., 206 F. Supp. 2d 702, 711 n.13
Realtors, 304 A.2d 493, 496 (Pa. 1973) (opinion of Manderino, J.) (announcing the
judgment of the court) (applying Associated Press v. United States, 326 U.S. 1 (1945));
Schwartz, 14 A.2d at 440-41; Phila. Cleaners & Dyers Ass’n, 19 Pa. D. & C. at 330
(applying United States v. Trenton Potteries Co., 273 U.S. 392 (1927)).
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1.c. History
In the early 1990s, legislators in the Pennsylvania General Assembly made
several attempts to pass a state antitrust statute.10 None of their efforts was
successful, and the legislature has not considered a general antitrust statute since
1995.
1.d. Relation to Federal Law
Pennsylvania does not have any law analogous to the Clayton Act,11 the
Robinson-Patman Act,12 or Section 5 of the Federal Trade Commission Act.13
Pennsylvania courts look to federal antitrust law decisions for guidance in defining
unreasonable restraints of trade.14
1.e. Remedies
Pennsylvania has no statute providing a private right of action, as discussed in
part 16 of this chapter.
2. The Per Se Rule and the Rule of Reason
Pennsylvania courts have not expressly declared any particular restraints of trade
to be unlawful per se, but they have treated certain practices as essentially per se
unlawful. They have condemned horizontal and vertical price fixing, horizontal
customer allocation, and group boycotts by competitors without further inquiry into
the degree of commerce affected by the practice, the purported justification for the
conduct, or, in the case of price fixing, the reasonableness ofthe prices fixed.15
At the same time, the courts traditionally have upheld nonprice vertical restraints
and other ancillary restraints where supported by reasonable justifications.16 Given
10. See, e.g., S.B. 611, 1995-96 Gen. Assem., Reg. Sess. (Pa. 1995); H.B. 525, 1995-96
Gen. Assem., Reg. Sess. (Pa. 1995); S.B. 307, 1993-94 Gen. Assem., Reg. Sess. (Pa.
1993); H.B. 1981, 1993-94 Gen. Assem., Reg. Sess. (Pa. 1993); S.B. 1470, 1990-91
Gen. Assem., Reg. Sess. (Pa. 1990); H.B. 2376, 1990-91 Gen. Assem., Reg. Sess. (Pa.
1990).
11. 15 U.S.C. §§ 12-27.
12. 15 U.S.C. §§ 13(a)-(f).
13. 15 U.S.C. § 45.
14. See Alvord-Polk, Inc., 37 F.3d at 1014; Intervest Fin. Servs., 206 F. Supp. 2d at 711
n.13; Collins, 304 A.2d at 496 (opinion of Manderino, J.); Schwartz, 14 A.2d at
440-41; Phila. Cleaners & Dyers Ass’n, 19 Pa. D. & C. at 330.
15. See Gulf Oil Corp. v. Mays, 164 A.2d 656 (Pa. 1960) (vertical price fixing); Schwartz,
14 A.2d at 438 (vertical price fixing, customer allocation, and group boycott); Nester
v. Cont’l Brewing Co., 29 A. 102 (Pa. 1894) (horizontal price fixing); Morris Run Coal
Co. v. Barclay Coal Co., 68 Pa. 173 (1871) (horizontal price fixing); Phila. Cleaners &
Dyers Ass’n, 19 Pa. D. & C. at 330 (horizontal price fixing).
16. See Maxwell v. Schaefer, 112 A.2d 69 (Pa. 1955) (exclusive dealing contracts judged
under rule of reason); Bald Eagle Valley R.R. v. Nittany Valley R.R., 33 A. 239 (Pa.
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the precedent of looking to federal law for guidance,17 Pennsylvania courts are likely
to follow the per se rules developed under federal antitrust decisions.
3. Horizontal Agreements Other Than Group Boycotts
3.a. Price Fixing
Horizontal agreements to fix prices are considered unreasonable restraints of
trade under Pennsylvania common law.18 The issue generally has arisen in the
context of suits to enforce contractual obligations among participants to a
price-fixing or bid-rigging arrangement.19 The courts uniformly have denied relief in
these suits on the ground that agreements unreasonably restraining trade are against
public policy and therefore are unenforceable.20
3.b. Market Allocation
None of the reported cases in Pennsylvania deals solely with market allocation,
although one court has condemned a division of markets in conjunction with a
price-fixing arrangement as an unreasonable restraint of trade.21
3.c. Customer Allocation
The Pennsylvania Supreme Court has declared that “the apportioning of
customers to specified dealers is not permitted” under the common law.22 Although
the court’s statement was made in connection with a market-wide price-fixing
combination, Pennsylvania courts are likely to applythe equivalent of a per se rule to
1895) (exclusive dealing agreement upheld as reasonable); Arons v. Kopf, 21 Pa.
Super. 123 (1902) (dictum); Morris v. School Dist., 32 Pa. D. & C.3d 335 (C.P. 1984)
(exclusive dealing agreement upheld as reasonable); Harbison-Walker Refractories Co.
v. Stanton, 75 A. 988 (Pa. 1910) (covenant not to compete ancillary to sale of business
upheld as reasonable); Monongahela River Consol. Coal & Coke Co. v. Jutte,
59 A. 1088 (Pa. 1904) (covenant not to compete ancillary to sale of business upheld as
reasonable).
17. See Collins, 304 A.2d at 496.
18. See Nester, 29 A. at 105; Morris Run Coal Co., 68 Pa. at 188; Phila.Cleaners & Dyers
Ass’n, 19 Pa. D. & C. at 330.
19. Pennsylvania has no statute providing a private right of action.
20. E.g., Ford Motor Co. v. Sweeten Auto. Co., 178 A. 48 (Pa. 1935) (agreement not to bid
at auction); Kuhn v. Buhl, 96 A. 977 (Pa. 1916) (agreement to withdraw bid); Nester,
Constructors Ass’n v. Seeds, 15 A.2d 467 (Pa. Super. Ct. 1940) (agreement to add
trade association fees to all bid quotations); Phila. Cleaners & Dyers Ass’n, 19 Pa.
D. & C. at 330 (price fixing).
21. Morris Run Coal Co., 68 Pa. 173.
22. Schwartz v. Laundry & Linen Supply Drivers’ Union, Local 187, 14 A.2d 438, 441
(Pa. 1940).
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