Sunday, June 1, 2014

United States v. Socony-Vacuum Oil Co. case brief summary

United States v. Socony-Vacuum Oil Co. case brief summary

Facts: dealing w/ major oil companies (11). There was a spot market of oil, where you get the oil immediately after you paid for it. If spot market price increased, then price sold to outlets will also be increased. In the interest of the oil companies to get a high spot market. Distressed price in the spot market affected the price of gasoline sold. Agmt btwn the companies where they will buy the excess gas from the dancing company i.e., independent refineries reducing available gas. This would increase the price of gas. The independent refineries were flooding the market with excess gas.
a.       Issue: Whether the act together to raise prices to be charged for a commodity which they manufactured where they controlled a substantial part of the interstate trade and commerce in the commodity was a violation of the Sherman Act.
b.      Holding/Rationale: YES
                                                                                                         i.            Oil company argued that they were doing it to get rid of the evils in the industry à argument shot down by the Court b/c you can’t get rid of evils through anti-competitive behavior.
                                                                                                       ii.            Price fixing is not jus an agreement to fix price, but also an agmt to increase/decrease price, calculate a formula, credit terms. See definition on bottom of 220.

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