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Re: Hey Terekhov: Wallace lost. Who'd guess.... ;)

From: Alexander Terekhov
Subject: Re: Hey Terekhov: Wallace lost. Who'd guess.... ;)
Date: Wed, 17 May 2006 00:02:30 +0200

Alexander Terekhov wrote:
> III. Analysis
> Wallace alleges that the Defendants’ “predatory price-fixing scheme

> prevents [him] from marketing his own computer operating system as a
> competitor.” His complaint fails because it fails to allege
> anticompetitive effects in an identifiable market. Car Carriers, Inc.
> v. Ford Motor Company, 745 F.2d 1101 (7th Cir. 1984) (affirming dismissal
> based on failure to allege an anticompetitive effect).
> Antitrust laws are for “the protection of competition, not competitors.”
> Brunswick Corp. v. Pueblo Bowl-o-Mat, Inc., 429 U.S. 477, 488 (1977). In
> this case, the GPL benefits consumers by allowing for the distribution of
> software at no cost, other than the cost of the media on which the
> software is distributed. (Ex. A at ¶ 1). “When the plaintiff is a poor
> champion of consumers, a court must be especially careful not to grant
> relief that may undercut the proper functions of antitrust.” Ball Mem’l
> Hosp., Inc. v. Mutual Hosp. Ins., Inc., 784 F.2d 1325, 1334 (7th Cir.
> 1986). Because he has not identified an anticompetitive effect, Wallace
> has failed to allege a cognizable antitrust injury.

"Although a vertical, maximum-price-fixing agreement is unlawful under 1 
of the Sherman Act, it does not cause a competitor antitrust injury unless 
it results in predatory pricing. 8 Antitrust injury does not arise for 
purposes of 4 of the Clayton Act, see n. 1, supra, until a private party 
is adversely affected by an anticompetitive aspect of the defendant's 
conduct, see Brunswick, 429 U.S., at 487 ; in the context of pricing 
practices, only predatory pricing has the requisite anticompetitive 
effect. 9 See Areeda & Turner, Predatory Pricing and Related [495 U.S. 
328, 340] Practices Under Section 2 of the Sherman Act, 88 Harv. L. Rev. 
697, 697-699 (1975); McGee, Predatory Pricing Revisited, 23 J. Law & Econ. 
289, 292-294 (1980). Low prices benefit consumers regardless of how those 
prices are set, and so long as they are above predatory levels, they do not 
threaten competition."

Go figure.


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