Antitrust — rule of reason

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United States Court of Appeals For the Seventh Circuit

Civil

Antitrust — rule of reason

“Shutdown agreements” are not per se illegal, but are subject to the rule of reason.

“The joint venture enabled substantial economies in transportation and marketing and after it was launched the price of sulfuric acid in the United States dropped significantly. Yet the plaintiffs argue that the joint venture was spurious. If two or more competing firms, wanting to fix prices, agreed to form a joint venture to sell their output at a price agreed on by the parties, the designation of the price-fixing agreement as a joint venture would not save it from being adjudged illegal per se. Texaco Inc. v. Dagher, supra, 547 U.S. at 5-6 and n. 1; Starr v. Sony BMG Music Entertainment, 592 F.3d 314, 326 (2d Cir. 2010); Addamax Corp. v. Open Software Foundation, Inc., 152 F.3d 48, 52 (1st Cir. 1998); 13 Hovenkamp, supra, ¶ 2132, pp. 187-200. But as also explained in the cases and treatise that we’ve just cited, if a joint venture has a legitimate business purpose, as the defendants’ joint venture with DuPont did, the fact that as part of the venture the prices of the venturers are coordinated does not condemn it out of hand, but instead subjects it to scrutiny under the rule of reason. If the coordination is ancillary to (that is, supportive of) the legitimate business purpose of the venture, it may be permissible—a rule of reason question.”

Affirmed.

12-1109 & 12-1224 In re Sulfuric Acid Antitrust Litigation

Appeals from the United States District Court for the Northern District of Illinois, Holderman, J., Posner, J.