Opinion ID: 414202
Heading Depth: 1
Heading Rank: 4

Heading: gbs's antitrust complaint

Text: A. Monopolization 22 The offense of monopolization rests upon the willful acquisition or maintenance of monopoly power in the relevant market, United States v. Grinnell Corp., 384 U.S. 563, 570-71, 86 S.Ct. 1698, 1703-04, 16 L.Ed.2d 778 (1966); Greyhound Computer Corp. v. IBM, 559 F.2d 488, 492 (9th Cir.1977), cert. denied, 434 U.S. 1040, 98 S.Ct. 782, 54 L.Ed.2d 790 (1978), and the existence of actual injury to competition in that market. See Betaseed, 681 F.2d at 1231-32; California Computer Products v. IBM, 613 F.2d 727, 735 (9th Cir.1979). The threshold consideration in establishing market power is the relevant market. See Grinnell, 384 U.S. at 571, 86 S.Ct. at 1704. A firm cannot impose monopoly prices if buyers are free to purchase a competitor's goods. Thus, all products that are reasonably interchangeable, and so can be said to compete with each other for the same buyers' dollars, are included in the market definition. United States v. E.I. du Pont & Co., 351 U.S. 377, 76 S.Ct. 994, 100 L.Ed. 1264 (1956). For purposes of antitrust analysis, the relevant market may also be a submarket delineated by: 23 industry or public recognition of the submarket as a separate economic entity, the product's peculiar characteristics and uses, unique production facilities, distinct customers, distinct prices, sensitivity to price changes, and specialized vendors. 24 Brown Shoe Co. v. United States, 370 U.S. 294, 325, 82 S.Ct. 1502, 1523, 8 L.Ed.2d 510 (1962); see, e.g., M.A.P. Oil Co. v. Texaco Inc., 691 F.2d 1303, 1307-08 (9th Cir.1982). 25 Nonetheless, the designation of the relevant market requires considerable judgment. Its dimensions include the product involved, the geographical limits within which it functions, and the appropriate time frame. The latter two pose no difficulty in this case. We can assume that the United States fixes the geographical limits and the years 1969 to 1978 the appropriate time frame. 26 The choice of the appropriate product is another matter. According to GBS, the appropriate product in this case is the Philips-compatible mlc when sold at wholesale. Its entire case is dependent on this choice of appropriate product. Only in this narrowly defined market did Philips possess a significant share. GBS relies on several factors to establish its market definition. It asserts that owners of Philips computers were locked-in to Philips-compatible mlcs. These owners could find few, if any, adequate substitutes for the JK and MD cards. As a result, GBS argues, Philips was able to raise its prices without facing competition from other mlc manufacturers. GBS also claims that the industry recognized a distinct Philips-compatible mlc market. The cards produced by JK and MD met Philips' stringent specifications and were not sold for use in other manufacturers' computers. The majority of these cards were handled by dealers who dealt only in Philips products. The foregoing allegedly gave Philips the ability to maintain premium prices in this distinct market. 27 The district court rejected as a matter of law GBS's market definition. It is this interpretation of the law that we must review. If the district court erred, we must reverse its judgment with respect to GBS's claims and remand for further proceedings. The primary source of the failure of GBS to establish its position is the district court's conclusion that the market for Philips-compatible mlcs was not insulated from the competitive struggle between computer systems. That is, in its view Philips had little or no power to raise the price of its mlcs without reducing its profits because any such increase would diminish sales of its computer system and very likely adversely affect aggregate profits. Were mlc prices significantly increased, computer system buyers quickly could shift to other sellers who, in turn, could profitably expand their output to meet the new demand. We agree with the district court that the undisputed facts permit only one conclusion, viz., that the market for mlcs cannot be separated from the general market for small business computer systems. 1. The Undisputed Facts 28 The performance of mlcs was a major concern for businesses contemplating purchase of a P300 or P350. At first this worked to Philips' advantage. The reliability of its mlcs, which reputedly worked better than those of its competitors, played an important role in the campaign to sell Philips computers. Businesses unwilling to risk processing delays or loss of information would find the Philips computers and their mlcs an attractive package. As other companies developed more modern disk computers, however, Philips' early advantage became a serious disadvantage. Its failure in the American market is attributable to its attempt to cling to mlc computers even after the newer disk computers had proven their greater productivity. Philips' sales of computers dropped as purchasers turned away from systems based on the outmoded mlc technology. 29 In spite of contrary allegations in GBS's brief, the facts before the district court demonstrate that prospective purchasers also viewed the cost of mlcs as a major barrier to purchase of a Philips computer. While Philips sold fewer than 3000 computers in the American market between 1974 and 1978, it sold more than 19 million mlcs in the same market in the shorter period from 1975 to October 1978. At between twenty and twenty-eight cents a card, the mlcs' cost was a substantial part of total cost for many users. It is hardly surprising, then, that Shasta included the high price of mlcs among the factors it used to convince customers to buy the more modern, disk-based Diablo. Even Philip Parise, GBS's vice-president, who maintained that he didn't know of any particular computer sale lost because of the cost of Philips mlcs, conceded that it could have been easier to sell Philips computers had mlc prices been lower. As we view the record, there is no genuine dispute concerning the fact that the high price of these mlcs, which cost as much as two or three times those of other manufacturers, reduced the competitiveness of the Philips computers. 30 GBS asserts that the viability of a separate market for mlcs is placed at issue by the price insensitivity of the market for Philips mlcs after Philips withdrew from the computer market. This is not the case. Philips adhered to high prices after its withdrawal because, as GBS's president, Lawrence Finch, stated in his Declaration in Opposition to Defendant's Summary Judgment Motion, it had higher overhead costs than its competitors. The period during which GBS alleges that these prices were successfully foisted on the market is the same period during which competitors forced Philips, laden with its expensive mlcs, out of the American small business computer market. In due course Philips abandoned its mlc operation as well. It would not have done so had that market been the separate, profitable market alleged by GBS. Philips was the victim, not the beneficiary, of its high prices in the mlc market. 31 The other factors cited in support of GBS's market definition merit little discussion. Mlcs were sold separately from computers because of the dynamics of use, not market differentiation. Users could hardly be expected to buy a supply of mlcs good for the product life of the computer when they made their initial purchase of a P300 or P350. The physical division of consumer behavior does not alone establish that it is directed at separate markets. Industry recognition is, of course, a valid indicator of relevant market. See, e.g., Greyhound Computer, 559 F.2d at 495. GBS, however, has failed to direct us to any significant probative evidence of such recognition. The only evidence to which it alludes is the unsupported statement of one witness that Philips-compatible mlcs constituted a market. This does not amount to substantial evidence of industry recognition, particularly when contrasted with the persuasive evidence already discussed of the interdependence of Philips computers and mlcs. 2. The Cases 32 GBS relies on two cases, Heatransfer Corp. v. Volkswagenwerk, A.G., 553 F.2d 964 (5th Cir.1977), cert. denied, 434 U.S. 1087, 98 S.Ct. 1282, 55 L.Ed.2d 792 (1978), and Greyhound Computer Corp. v. IBM, 559 F.2d 488 (9th Cir.1977), cert. denied, 434 U.S. 1040, 98 S.Ct. 782, 54 L.Ed.2d 790 (1978), to refute the district court's determination of the relevant market. The confidence of GBS is misplaced. In Heatransfer the jury recognized a separate market in air-conditioning units for Volkswagen automobiles. These units, designed to accommodate Volkswagens' air-cooled, rear-mounted engines, were not suitable for other types of engines. Several manufacturers competed in this special market, which was not quickly responsive to price changes in air conditioners suitable for other engine types. Thus, a jury could easily find a market limited to Volkswagen air conditioners. See 553 F.2d at 980-81. 33 The market for mlcs is quite different. Unlike an air conditioner, which is not an integral part of an automobile system, mlcs are an essential component of the Philips computer system. Not only is an mlc computer useless without cards, but also the quality of the mlcs determines the overall performance of the system. As already pointed out, the rational purchaser of a computer system must consider the cost, availability, and reliability of mlcs when deciding which system to purchase. Conversely, changes in the price, whether direct or indirect, of competing computer systems will quickly affect demand for the Philips computer systems and their mlcs. 34 GBS's reliance on Greyhound Computer is similarly misplaced. In that case the evidence sustained, though by no great margin, the jury's finding of a market consisting of leased computers. 559 F.2d at 494-95. Contrary to GBS's contention, we expressly declined to rule on the lock-in theory asserted by Greyhound. Id. at 495-96. Rather, we placed heavy reliance on industry recognition of the distinction between leases and sales. See id. at 495. 35 Standing against GBS's lock-in theory is a line of cases rejecting attempts to establish a relevant market with respect to a locked-in component. Telex Corp. v. IBM, 510 F.2d 894 (10th Cir.), cert. dismissed, 423 U.S. 802, 96 S.Ct. 8, 46 L.Ed.2d 244 (1975), and ILC Peripherals Leasing Corp. v. IBM, 458 F.Supp. 423 (N.D.Cal.1978), aff'd sub nom. Memorex Corp. v. IBM, 636 F.2d 1188 (9th Cir.1980), cert. denied, 452 U.S. 972, 101 S.Ct. 3126, 69 L.Ed.2d 983 (1981), both rejected claims that the relevant market was IBM-compatible peripheral equipment. In Telex, the Tenth Circuit reversed a district court's definition of the relevant market for peripherals as being that for devices compatible with IBM central processing units. The circuit court expanded the market definition to include non-IBM plug-compatible peripherals. The ease with which the incompatible could be made compatible established the reasonable substitutability of these peripheral products. 510 F.2d at 919. 36 We adopted a similar approach in ILC Peripherals, in which the district court's directed verdict rested in part on the plaintiff's failure to establish a submarket for IBM peripherals. The district court emphasized the potential competition from non-IBM plug-compatible manufacturers who could have converted to production of IBM-compatible equipment. 2 IBM had demonstrated that the costs and engineering barriers to conversion were not excessive. 458 F.Supp. at 429. It also relied heavily on competition between computer systems. Because peripherals formed a large part of total system cost, an increase in peripheral prices would increase the demand for competitive systems. Systems competition was therefore an important restraint on peripheral pricing. Id. 37 It is true that in Telex and ILC Peripherals the peripheral equipment represented a more substantial portion of the total system cost than do the mlcs. The same, however, cannot be said about Advance Business Systems & Supply Co. v. SCM, 287 F.Supp. 143 (D.Md.1968), modified on other grounds, 415 F.2d 55 (4th Cir.1969), cert. denied, 397 U.S. 920, 90 S.Ct. 928, 25 L.Ed.2d 101 (1970). In Advance Business Systems the plaintiff, a distributor of copying machine supplies, contended that the relevant market was paper that could be used in SCM copiers. SCM controlled this market, although a number of manufacturers produced paper that could be used with SCM's direct electrostatic process. Copying paper constituted a small portion of overall system cost. The court found the plaintiff's market definition to be unrealistically narrow after citing the competition among both paper suppliers and copier manufacturers. Id. at 153-54. It opted instead for a definition that included paper compatible with any copier operating on the direct electrostatic process used by SCM. 38 Advance Business Systems is consistent with the relevant market cases decided in this circuit. In Kaplan v. Burroughs Corp., 611 F.2d 286 (9th Cir.1979), cert. denied, 447 U.S. 924, 100 S.Ct. 3016, 65 L.Ed.2d 1116 (1980), the plaintiff alleged that the initial cost of programming equipment locked-in customers to bulk processing centers using Burroughs equipment and, thus, that such centers composed the relevant market. Similarly, in In re Data General Corp. Antitrust Litigation, 529 F.Supp. 801 (N.D.Cal.1981), commitment to certain software programs had allegedly locked-in customers to the central processing units that executed the programs. In both cases, definitions of the relevant market that were limited to a single company's systems were rejected. Such definitions did not describe economically significant markets. In Kaplan we stressed the high cross-elasticity of demand as between data processing systems. 611 F.2d at 295. Data General also turned on the widespread competition in the market for computer services. See 529 F.Supp. at 813-14. 39 GBS's lock-in theory must also be rejected. Philips has amply established that intense systems competition drove it from the market for small business computers and for mlcs. Had there been a demand for substitute mlcs, other manufacturers would have experienced no technological or financial barriers in responding to it. Taken to its logical conclusion, GBS's approach would dictate that a manufacturer, facing competition against which it cannot prevail in the sale of its end product, could be found to monopolize the market for each unique component that goes into the product. This is surely to lose sight of the forest because of fascination with the trees. 40 We conclude, therefore, that the district court did not err in rejecting a market definition limited to Philips-compatible mlcs. B. Attempted Monopolization 41 Three elements are necessary to prove an attempted monopolization claim in this circuit: (1) specific intent to control prices or destroy competition in some part of commerce; (2) predatory or anticompetitive conduct directed to accomplishing the unlawful purpose; and (3) a dangerous probability of success. William Inglis & Sons Baking Co. v. ITT Continental Baking Co., 668 F.2d 1014, 1027 (9th Cir.1981), cert. denied, --- U.S. ----, 103 S.Ct. 57, 74 L.Ed.2d 61 (1982). In establishing the presence of these elements we permit a dangerous probability of success to be inferred from proof of specific intent which, in turn, can be inferred from conduct that forms the basis of a substantial claim of restraint of trade, or conduct that is exclusionary or threatening to competition. Id. at 1029 & n. 11. 42 GBS's attempt at direct proof of probability of success is unavailing because of its failure to establish a relevant market limited to Philips-compatible mlcs. See generally M.A.P. Oil Co. v. Texaco Inc., 691 F.2d 1303, 1308-10 (9th Cir.1982) (explaining role of relevant market in attempt to monopolize claims). Philips' diminishing share of the market for small business computers cannot support a finding of probable success in that market. Nor can we infer specific intent because, as the district court found, GBS has failed to show anticompetitive conduct sufficient to survive the grant of summary judgment. It is true, as GBS argues, that direct evidence of specific intent may lessen the burden of the conduct requirement if it clarifies the purpose of otherwise ambiguous conduct. See Inglis, 668 F.2d at 1030. However, here GBS has made no showing of predatory conduct whatsoever. Philips competed ineffectually in the market for small business computers and their accessory products. To hold that such conduct supports a charge of attempted monopolization is to suggest that the antitrust law punishes losers in the competitive struggle rather than protecting them from the avarice of winners. The district court properly rejected this claim. C. Price Fixing 43 GBS's price fixing claim rests on the complex arrangement Philips created to market its products in the United States. JK and MD manufactured mlcs for the American market under contract with NVP. American suppliers could not deal directly with either manufacturer; NVP designated distributors for the mlcs and renegotiated prices annually with JK and MD. NVP set up a two-tier distribution system for its American market. Mlcs were first funneled through PBSI, its wholly owned subsidiary. In some areas PBSI then sold these mlcs directly to retail customers; in other markets designated agents like GBS distributed the mlcs. 44 GBS, in support of its price fixing claim, points out that between 1975 and 1978 the prices charged for JK and MD mlcs were nearly identical. Although GBS is ambiguous on this point, it apparently is complaining about the prices JK and MD negotiated with NVP, not the prices charged by PBSI. GBS relies on the rather vague testimony of a GBS officer who fails to differentiate between sales by PBSI and sales by JK and MD. In addition, it relies on a series of letters from NVP to PBSI which detail NVP's price agreements with JK and MD. GBS argues that negotiations with NVP provided the opportunity for JK and MD to set prices. 45 We hold that GBS, as an indirect purchaser, lacks standing to complain about prices JK and MD charged PBSI. See Illinois Brick Co. v. Illinois, 431 U.S. 720, 97 S.Ct. 2061, 52 L.Ed.2d 707 (1977). The cases cited by GBS, United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 60 S.Ct. 811, 84 L.Ed. 1129 (1940), and Ambook Enterprises v. Time Inc., 612 F.2d 604 (2d Cir.1979), cert. dismissed, 448 U.S. 914, 101 S.Ct. 35, 65 L.Ed.2d 1179 (1980), do not involve similar indirect purchasing arrangements. Even were GBS to have standing our result very likely would not be different because we find no evidence of any illicit agreement between JK and MD. Price parallelism alone generally will not establish price fixing. Other circumstantial evidence is required. Id. at 615; see, e.g., Zoslaw v. MCA Distributing Corp., 693 F.2d 870, 885 (9th Cir.1982). No such evidence has been shown to exist here. Thus, summary judgment on the price fixing claim was proper. D. Market Allocation 46 GBS's per se attack on Philips' agreement to divide purchases evenly between JK and MD is also without merit. GBS asserts that this constitutes an illegal horizontal restraint. Numerous cases have condemned such restraints. In United States v. Topco Association, 405 U.S. 596, 92 S.Ct. 1126, 31 L.Ed.2d 515 (1972), for instance, potential competitors in the grocery industry combined to allocate markets and compete with larger retailers. Timken Roller Bearing Co. v. United States, 341 U.S. 593, 71 S.Ct. 971, 95 L.Ed. 1199 (1951), involved a horizontal restraint among manufacturers of antifriction bearings. Here JK and MD did not combine or agree to allocate markets. The Third Circuit in American Motor Inns, Inc. v. Holiday Inns, Inc., 521 F.2d 1230 (3d Cir.1975), it is true, did treat a vertical allocative scheme as a horizontal agreement where Holiday Inns, in response to pressure from its franchisees, distributed new franchises in a manner that achieved the same ends as would have a horizontal agreement between the franchisees. Pitchford v. PEPI, Inc., 531 F.2d 92 (3d Cir.1975), cert. denied, 426 U.S. 935, 96 S.Ct. 2649, 49 L.Ed.2d 387 (1976), also cited by GBS, presented an analogous arrangement between an electronics manufacturer and its dealers. No such joint pressure was exerted here and Philips was responding to none such in dividing purchases between JK and MD. In fact, it was responding to the unilateral pressure of JK which GBS was assisting to some extent. 47 A direct challenge to PBSI's contract as an illegal vertical restraint would be no more successful. In Continental T.V., Inc. v. GTE Sylvania Inc., 433 U.S. 36, 97 S.Ct. 2549, 53 L.Ed.2d 568 (1977), the Supreme Court perhaps left open the possibility that per se standards would apply to vertical restraints where a plaintiff could show pernicious economic effect or lack of any redeeming virtue. First Beverages, Inc. v. Royal Crown Cola Co., 612 F.2d 1164, 1170 (9th Cir.), cert. denied, 447 U.S. 924, 100 S.Ct. 3016, 65 L.Ed.2d 1116 (1980). GBS, however, has not attempted to provide the factual evidence necessary to meet its burden even under the rule of reason. See Continental T.V., Inc. v. G.T.E. Sylvania Inc., 694 F.2d 1132, 1136 (9th Cir.1982); see also Chicago Board of Trade v. United States, 246 U.S. 231, 238, 38 S.Ct. 242, 243, 62 L.Ed. 683 (1918); cf. First Beverages, 612 F.2d at 1168 n. 3 (reproducing district court's jury instruction, drawn from Chicago Board of Trade, on reasonableness of territorial restraint). Accordingly, its market allocation claim must fail. E. Tying 48 GBS rests its tying claim on an alleged attempt by Philips to expand sales of JK and MD mlcs, the tied product, by denying service and warranty protection, the tying service, to computer owners who did not use these mlcs. The elements necessary to establish such a claim are: (1) Two distinct products or services are in fact tied such that the products are offered as a single package; (2) The defendant has sufficient economic power in the tying market to impose restrictions in the tied product market; (3) The amount of commerce in the tied product is not insubstantial. Portland Retail Druggists Association v. Kaiser Foundation Health Plan, 662 F.2d 641, 648 (9th Cir.1981); Moore v. Jas. H. Matthews & Co., 550 F.2d 1207, 1212 (9th Cir.1977). GBS has not presented facts from which the second element could be inferred. To possess substantial power in the tying market, a firm must be able to raise prices or to require purchasers to accept burdensome terms that could not be enacted in a completely competitive market. U.S. Steel Corp. v. Fortner Enterprises, 429 U.S. 610, 620, 97 S.Ct. 861, 867, 51 L.Ed.2d 80 (1977) (Fortner II ). Under the facts before the district court, Philips possessed no such power with respect to the tying service. To have attempted to impose significant pressure to buy JK and MD mlcs by use of the tying service only would have hastened the date on which Philips surrendered to its competitors in the small business computer market. 49 It is true that Philips mlcs had a higher price than other similar cards. This could be under proper circumstances the result of being tied. See Fortner Enterprises v. U.S. Steel Corp., 394 U.S. 495, 504-05, 89 S.Ct. 1252, 1259, 22 L.Ed.2d 495 (1969) (Fortner I ); Moore, 550 F.2d at 1216 & n. 8. That, however, is not the case here. The higher prices of Philips mlcs were incident to their greater reliability. Their prices did not depend on Philips' involvement in the tying service. The cost of Philips-compatible mlcs did not drop after Philips withdrew from the market for small business computers in 1978 and sold its interest in the tied product to a third party. GBS itself sought to sell more expensive mlcs from another manufacturer in this period. The Philips mlc was hardly a product whose prices were inflated by the vigor of its producer's strength in a tying market. The tying claim also fails. F. Refusal to Deal 50 GBS, in pressing its section 1 claims, argues that the Philips companies' exclusive dealing arrangements with JK and MD constituted violations under either a per se or rule of reason analysis. 51 To establish a per se violation of section 1, a plaintiff generally must show that the defendant engaged in concerted anticompetitive activity with others at the same level of market organization. Exclusive dealerships usually escape the proscriptions of section 1 because, as already indicated, they establish a vertical relationship among firms that do not compete with each other. See A.H. Cox & Co. v. Star Machinery Co., 653 F.2d 1302, 1306 (9th Cir.1981); Gough v. Rossmoor Corp., 585 F.2d 381, 387 (9th Cir.1978), cert. denied, 440 U.S. 936, 99 S.Ct. 1280, 59 L.Ed.2d 494 (1979). 52 Restraints solicited by a distributor but implemented by a manufacturer are not automatically per se violations. A.H. Cox, 653 F.2d at 1306. Restraints of this type come within the per se rule only if they clearly had, or [were] likely to have, a pernicious effect on competition and lacked any redeeming virtue. Ron Tonkin Gran Turismo, Inc. v. Fiat Distributors, 637 F.2d 1376, 1386-87 (9th Cir.), cert. denied, 454 U.S. 831, 102 S.Ct. 128, 70 L.Ed.2d 109 (1981); see, e.g., Betaseed, Inc. v. U & I Inc., 681 F.2d 1201, 1235 (9th Cir.1982). 53 GBS invokes Ron Tonkin's per se standard as applied in Cernuto, Inc. v. United Cabinet Corp., 595 F.2d 164 (3d Cir.1979). In Cernuto, the Third Circuit implied an anticompetitive effect to reverse a grant of summary judgment where a distributor allegedly had convinced its supplier, a cabinet manufacturer, to cease dealing with a competing distributor. Id. at 170. GBS appears to read Cernuto to hold that all a plaintiff need show to establish a per se violation is that a purchaser requested a common supplier to cut off a price-cutting competitor and that the request was honored. The Third Circuit, however, placed equal reliance on evidence of the defendants' concerted activity to restrain price movement. See id. at 168-70; Edward J. Sweeney & Sons, Inc. v. Texaco, Inc., 637 F.2d 105, 115 (3d Cir.1980), cert. denied, 451 U.S. 911, 101 S.Ct. 1981, 68 L.Ed.2d 300 (1981). This GBS has not shown. 54 GBS would use Philips' allegedly premium prices to prove its price maintenance motivation. We have already rejected GBS's claim that it demonstrated an artificial price premium. According to GBS's own testimony, the Philips companies had high overhead costs which explain, at least partially, their high prices. Moreover, Philips mlcs were more reliable than the competition's; this explains the market's acceptance of higher prices. GBS's only direct evidence of price motivation is the testimony of a Philips employee that Philips was aware of GBS's lower prices during the period it bought mlcs directly from JK. The employee denied any concern about those prices apart from his general concern about GBS's interference with the Philips companies' exclusive relations with JK and MD. Equally damaging to GBS's Cernuto theory is the absence of evidence that Philips communicated its price concerns to JK or MD. Ron Tonkin and Cernuto each revealed much stronger evidence of complicity between manufacturer and distributor than exists in this case. 55 GBS claims that even if the Philips companies' exclusive dealerships were not invalid under Cernuto, the use of pressure against JK and MD to maintain the exclusive distributorship constituted an unreasonable restraint of trade. For support GBS cites a PBSI employee's testimony that JK was threatening its business relations with Philips by dealing with GBS. The threat here, however, is little different than the one in Determined Productions, Inc. v. R. Dakin & Co., 514 F.Supp. 645 (N.D.Cal.1979), aff'd mem., 649 F.2d 866 (9th Cir.1981). In Determined Productions, the defendant contracted with a third party to produce stuffed toy animals, which the defendant, in turn, supplied to the plaintiff. The third party was the largest but by no means the only such manufacturer in Korea. As in this case, the plaintiff tried to sidestep the middle man and deal directly with the Korean toy producer. The defendant responded with a threat to break relations with the Korean toy producer unless it returned to an exclusive dealing relationship. The Korean acquiesced. The district court, having first rejected the plaintiff's per se claim, discarded the rule of reason challenge because of the plaintiff's failure to give evidence of a relevant market and because of the ready availability of alternative sources of supply. Id. at 648. 56 GBS attempts to distinguish Determined Productions on the ground that GBS did not have alternative sources of mlcs. This is not so. Alternatives did exist. It is true that substitute mlcs might not have been available on the same terms from other suppliers; this, however, does not indicate economic injustice. As the court noted in Determined Productions, a defendant, having succeeded in legitimately controlling the best, most efficient and cheapest source of supply in Korea, does not have to share the fruits of its superior acumen and industry. Id. In trying to secure direct access to mlcs jointly developed by Philips and JK, GBS was attempting to accomplish just that. 57 Finally, GBS condemns the refusal to deal as a section 2 violation. Our rejection of GBS's notions of the relevant market foreshadows our response. The relevant market was small business computers. The Philips mlcs were not such unique resources as the railroad terminals in United States v. Terminal Railroad Association, 224 U.S. 383, 32 S.Ct. 507, 56 L.Ed. 810 (1912), or the power grid in Otter Tail Power Co. v. United States, 410 U.S. 366, 93 S.Ct. 1022, 35 L.Ed.2d 359 (1973). Nor does the evidence support allegations that Philips used its worldwide market position to coerce JK to refuse to deal with GBS. The only passage GBS cites when referring to Philips' pressure on JK deals explicitly with the United States market. In sum, GBS's section 2 claim is no more supported than its various claims under section 1. We affirm the district court's decision.