Friday, January 17, 2014

U.S. v. Container Corp. case brief

U.S. v. Container Corp. case brief summary

FACTS
Firms in the corrugated container industry were engaging in periodic price verification on demand, with the expectation that their rivals would reciprocate.

HOLDING
The Court ruled that while exchanging price information in some markets may have no effect upon a truly competitive price, in the oligopoly of the corrugated container industry with inelastic demand and a fungible product there is an irresistible inference of an anticompetitive effect (citing American Lumber). 

DISCUSSION
The fact that prices were merely stabilized instead of increased did not have much of an effect upon the analysis of the Court.
  • Justice Fortas concurred and concluded that the tacit agreement to exchange information about current prices to specific customers substantially limited price competition but there was no need to consider it a per se violation
  • During periods when they ceased exchanging prices there were sharp and vigorous price reductions.
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