After Forty Years of Antitrust Revision and Apple v. Pepper, What Now Illinois Brick?
46 Pages Posted: 2 Jul 2019 Last revised: 8 Jul 2019
Date Written: July 1, 2019
Nineteen seventy-seven was a paradigm sifting year in antitrust law. Decisions by the Supreme Court greatly limited the type of parties who could successfully bring antitrust actions and what types of activities would violate the antitrust laws. First, in January of that year, the Court, in Brunswick v. Pueblo Bowl-O-Mat, ruled that to mount a case the plaintiff had to have suffered an antitrust injury. In other words, even if the antitrust laws were violated, the party raising the issue had to have suffered the type of harm the laws were designed to avoid. Then in a 14 day span the Court decided Continental TV v. GTE Sylvania and Illinois v. Illinois Brick. In Sylvania, the Court held that vertical restraints on distribution were to be assessed under the rule of reason as opposed to the per se standard. In so doing the Court adopted reasoning that would carry over to vertical restraints on prices and applied in the context of some horizontal restraint cases. In Illinois Brick, in a six to three decision, it held that indirect purchases could not recover from price fixing firms even if the higher prices were passed onto those purchasers by those purchasing directly from the price fixers. Of these opinions, Illinois Brick has little, if any, continuing justification. This has been true for some time but now that matter is more critical in the aftermath of the Supreme Court decision in Apple v. Pepper, which exposed after 40 years, the indeterminacy of Illinois Brick.
Keywords: Antitrust, Apple, Pepper, Illinois Brick, Error Rates
JEL Classification: K21
Suggested Citation: Suggested Citation