Friday, January 17, 2014

JTC Petroleum Co. v Piasa Motor Fuels case brief (7th Cir. 1999)

JTC Petroleum Co. v Piasa Motor Fuels case brief summary
  • JTC was an asphalt applicator rejected by a supplier because a cartel of asphalt applicators (who rigged bids in local government contracts) paid supra-competitive prices  to the supplier in order to discipline JTC. This does not necessarily even require the producer to collude, merely demand the same price that other applicators are offering to pay.
  • Since JTC is a rival and a cartel raising prices would be generally benefit JTC as well, JTC must tell a story of both harm to competition and harm to JTC.
  • Posner suggests that JTC is a maverick and a threat to the cartel, because it can undercut the cartels bid-rigging strategy. However, the cartel can prevent JTC by denying it access to asphalt producers.
  • Technically this is a market division case, because that is the rule Posner invokes and the cartel rigs bids by dividing the areas into exclusive zones and competitive zones.

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