E & L alleged that Doman had violated Sherman § 1 by dropping its distributor arrangement for green hem-fir lumber and giving Sherwood an exclusive distributorship arrangement.
The Court held that exclusive dealership agreements are presumptively legal and that E & L had failed to allege a violation.
- A vertically structured monopoly can take only one monopoly product, thus allegations of a price increase do not allege harm to competition, because Doman could achieve monopolistic price increases without the aid of a distributor.
- In the wake of GTE Sylvania, the court does not really worry about intrabrand competition; if it does not harm interbrand competition, it is not a cognizable complaint under the Sherman Act.
- There was only a single monopolistic seller and the exclusive distributor arrangement did create or engender any new monopolies.
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