Antitrust Violation

Listen to this article

7^th Circuit Court of Appeals

Case Name: Kleen Products LLC, et al. v. Georgia-Pacific LLC, et al.

Case No.: 17-2808

Officials: WOOD, Chief Judge, and BAUER and ROVNER, Circuit Judges.  

Focus: Antitrust Violation

Oligopolies have always posed problems for conventional antitrust law: without something that can be called an agreement, they elude scrutiny under section 1 of the Sherman Act, 15 U.S.C. § 1, and yet no individual firm has enough market power to be subject to Sherman Act section 2, 15 U.S.C. § 2. Tacit collusion is easy in those markets, see In re Text Messaging Antitrust Litigation, 782 F.3d 867 (7^th Cir. 2015), and firms have little incentive to compete on the basis of price, “preferring to share the profits [rather] than to fight with each other.” Joe Sanfelippo Cabs, Inc. v. City of Milwaukee, 839 F.3d 613, 615 (7th Cir. 2016).

This appeal concerns the fine line between agreement and tacit collusion, or, put another way, conscious parallelism. Direct purchasers of containerboard (“the Purchasers”) charged multiple manufacturers with conspiring to increase prices and reduce output between 2004 and 2010. We affirmed the district court’s decision to certify a nationwide class of buyers. Kleen Prods. LLC v. Int’l Paper Co., 831 F.3d 919 (7th Cir. 2016). Before and after that ruling, most of the defendants settled with the Purchasers. But two companies—Georgia‐Pacific LLC and WestRock CP, LLC—decided to fight. They persuaded the district court that there was not enough evidence of a conspiracy to proceed to trial. We agree with that assessment and affirm the judgment dismissing the case.

Affirmed

Full Text

Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.