Opinion ID: 775962
Heading Depth: 3
Heading Rank: 1

Heading: Concentration

Text: 43 Generally speaking, the possibility of anticompetitive collusive practices is most realistic in concentrated industries. If the relevant market in this case is defined as the plaintiff contends, the defendants would control collectively a 80-90% market share. Todd, 126 F. Supp. 2d at 323. While this is an extremely high market share by any measure, see Tops Mkts., 142 F.3d at 99, the district court contends that the alleged market is not, as plaintiff contends, so clearly oligopolistic, Todd, 126 F. Supp. 2d at 327. The district court points out that there are fourteen defendants in this case, and that this is not a concentrated market under the Department of Justice Merger Guidelines. Id. That the market would not be deemed highly concentrated by this measure, however, does not preclude the possibility of collusive activity. See In re Coordinated Pretrial Proceedings in Petroleum Prods. Antitrust Litig., 906 F.2d 432, 444 (9th Cir. 1990). The Merger Guidelines index cannot capture the full range of factors bearing upon the existence or strength of recognized interdependence. Id. (quoting VI Phillip E. Areeda, Antitrust Law: An Analysis of Antitrust Principles and Their Application ¶ 1431a, at 183 (1986)). 44 The Supreme Court has found that data exchange can be unlawful despite a relatively large number of sellers. In Container Corp., the Court used the oft-cited language that the industry was dominated by relatively few sellers. 393 U.S. at 337. But in fact, the defendants in Container Corp. were eighteen firms controlling 90% of the market, defined as the sale of cardboard cartons in the Southeast. Id. at 342, 89 S. Ct. 510 (Marshall, J., dissenting). The Court nonetheless found the market sufficiently concentrated to support the finding of a violation. Id. at 334-38, 89 S. Ct. 510. 10 It is fairly clear that the reason the Court reached its holding despite the multiplicity of sellers was the specific anticompetitive characteristics of the information exchange. Given that the market concentration in this case is not radically different from that in Container Corp., 11 and given that concentration is part of a rule of reason inquiry that also emphasizes the nature of the information exchanged, we do not think that fourteen companies sharing an 80-90% market share is so unconcentrated as to warrant a Rule 12(b)(6) dismissal where the nature of the exchanges appears anticompetitive. 12 We also find it unsurprising that data exchange cases may involve a number of participants that begins to push the boundaries of oligopoly. These players are most in need of such data exchange arrangements in order to facilitate price coordination; a very small handful of firms in a more highly concentrated market may be less likely to require the kind of sophisticated data dissemination alleged in this case.