Friday, January 17, 2014

American Tobacco v. United States case brief

American Tobacco v. United States case brief summary

FACTS
American Tobacco, R. J. Reynolds, and Ligget were convicted by a jury of conspiring to monopolize the American Tobacco industry. Despite the lowest price of tobacco in 25 years, the three companies had raised prices during the depression and garnered enormous profits, even with falling sales.

HOLDING
The Court found that allegations that Reynolds had raised prices, followed by American and Ligget, on the same day, sufficed to create a meeting of the minds in an unlawful arrangement.

ANALYSIS

  • Although it was technically brought as a conspiracy to monopolize under Sherman § 2, it is generally considered a § 1 case.
  • Baker suggests that the initial increase in price can be viewed as an offer in this situation and the following increases are viewed as acceptances by the court.

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