Private Enforcement
of Competition Law
Diane P. Wood
Chief Judge, U.S. Court of Appeals for
the 7th Circuit
Private enforcement in the United States:
long history
The role of the “private attorney general”
The role of the U.S. federal courts in
competition law
Overview of one circuit
Background
Who may sue?
◦ Damages cases
◦ Injunction cases
What must be shown
◦ Violation; Causation; “Antitrust Injury”
Effect of earlier government case
Remedies
Procedural Framework
Horizontal arrangement:
◦ Four companies, 90% of market
◦ Coordinated increases in price
◦ Circumstantial evidence of agreement
Why court ruled in plaintiffs’ favor
◦ Communications among defendants
◦ Exchange of pricing information
◦ Fast, identical changes
Text Messaging litigation
Key question: per se rule or rule of reason
Manufacturing problem: by-product of ore
smelting was sulfuric acid
Challenged agreements
◦ Output reductions, OR
◦ Efficient solution to disposal of waste product
Not a proper candidate for per se
treatment
Sulfuric Acid
Horizontal and vertical aspects
◦ Horizontal
TRU coordinates cartel of toy manufacturers
Cartel refuses to deal with warehouses
◦ Vertical
Each manufacturer is restricting which dealers it
will use; each manufacturer is favoring TRU
◦ Court focuses only on horizontal; affirms FTC
Toys “R” Us
Exclusionary Practices: Predatory Pricing
Definition of predatory pricing
◦ Below “cost”
◦ Drive others out
◦ Recoup “investment” later
In Wallace, no chance of later price
increase; thus no anticompetitive harm
Wallace v. IBM
Pure vertical case: Tying arrangement
Definition of a tie:
◦ Tying product (desirable, market power)\
◦ Tied product (add-on)
Critical fact: must show sufficient
economic power in tying product to
restrain significant amount of competition
in tied product
Reifert v. Multi
Multi--Listing
Service
Venue: Where the case is brought
◦ General venue: where claim arose; anywhere
for aliens
◦ Clayton Act venue: any district where
corporation is found or does business
Personal jurisdiction & service
◦ General rule: Minimum contacts with state; fair
◦ Clayton Act: Worldwide service
Held: Clayton Act is a package
KM Enterprises v. Global
Traffic Techs.
Foreign cases: Foreign Trade Antitrust
Improvements Act of 1982 (FTAIA)
Underlying case: worldwide potash cartel
Held: FTAIA governs whether claim is
stated, not jurisdiction of the court
Held: “Direct effect” means “reasonably
proximate causal nexus”
Held: This case could go forward
Minn--Chem v. Agrium
Minn