Opinion ID: 76493
Heading Depth: 2
Heading Rank: 3

Heading: Valid Business Justification as a Defense

Text: 21 The Sherman Act is ... the `Magna Carta of free enterprise,' but it does not give judges carte blanche to insist that a monopolist alter its way of doing business whenever some other approach might yield greater competition. Verizon Communications, 124 S.Ct. at 883 (internal quotations omitted). To the contrary, Section 2 of the Sherman Act ... seeks merely to prevent unlawful monopolization and unlawful refusals to deal. Id. 22 Unlawful monopoly power requires anticompetitive conduct, which is conduct without a legitimate business purpose that makes sense only because it eliminates competition. Gen. Indus. Corp. v. Hartz Mountain Corp., 810 F.2d 795, 804 (8th Cir.1987); see also LePage's Inc. v. 3M, 324 F.3d 141, 153-54 (3rd Cir.2003) (discussing Conwood Co., L.P. v. United States Tobacco Co., 290 F.3d 768 (6th Cir.2002), cert. denied, 537 U.S. 1148, 123 S.Ct. 876, 154 L.Ed.2d 850 (2003)). Likewise, refusal to deal that is designed to protect or further the legitimate business purposes of a defendant does not violate the antitrust laws, even if that refusal injures competition. See Aspen Skiing, 472 U.S. at 604, 105 S.Ct. at 2858; see also NYNEX Corp. v. Discon, Inc., 525 U.S. 128, 137, 119 S.Ct. 493, 499, 142 L.Ed.2d 510 (1998) (citing Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 225, 113 S.Ct. 2578, 2589, 125 L.Ed.2d 168 (1993), for the proposition that [e]ven an act of pure malice by one business competitor against another does not, without more, state a claim under the federal antitrust laws); United States Football League v. National Football League, 842 F.2d 1335, 1360 (2d Cir.1988) (concluding that no § 2 liability existed where network's actions were based on desire to obtain $736 million in rights fees, not to exclude competitors). 23 Once the defendant has met its burden to show its valid business justification, the burden shifts to the plaintiff to show that the proffered business justification is pretextual. See U.S. Anchor Mfg., Inc. v. Rule Indus., Inc., 7 F.3d 986, 1002 (11th Cir.1993); see also Image Technical Servs., Inc. v. Eastman Kodak Co., 125 F.3d 1195, 1212 (9th Cir.1997). 24 In this case, PGA met its business justification burden by showing that it seeks to prevent Morris from free-riding on PGA's RTSS technology. See Cont'l T.V., Inc. v. GTE Sylvania Inc., 433 U.S. 36, 55, 97 S.Ct. 2549, 2560, 53 L.Ed.2d 568 (1977) (stating that prevention of free-riding by competitors is a legitimate business purpose); Consultants & Designers, 720 F.2d at 1559 (concluding that defendant had a legitimate interest in protecting from opportunistic appropriation its investment in acquiring the information necessary to carry on its business). To achieve its business purpose, PGA has refused to grant Morris access to PGA tournaments unless Morris agrees not to sell the product of PGA's proprietary RTSS — compiled real-time golf scores — to non-credentialed third-party Internet publishers. Morris responds that it has a right to sell such product notwithstanding that RTSS was developed and paid for, and is operated by, PGA. 13 We disagree with Morris. The compiled real-time golf scores acquired through RTSS are not a product that Morris has a right to sell because they are a derivative product of RTSS, which PGA owns exclusively. 14 We agree with the district court that PGA has a right to sell or license its product, championship golf, and its derivative product, [compiled] golf scores, on the Internet in the same way the [PGA] currently sells its rights to television broadcasting stations. Morris Communications Corp. v. PGA Tour, Inc., 235 F.Supp.2d 1269, 1282 (M.D.Fla.2002). 25 If Morris wishes to sell PGA's product, it must first purchase it from PGA. See Consultants & Designers, 720 F.2d at 1559 (explaining that plaintiff did not have the right to abrogate defendant's property interest). Section 2 of the Sherman Act does not require PGA to give its product freely to its competitors. See Seagood Trading Corp. v. Jerrico, Inc., 924 F.2d 1555, 1573 (11th Cir.1991) (stating that it is not a function of the antitrust laws to equip plaintiffs with defendants' competitive advantages). PGA is willing to sell its product to its competitors, including Morris, thereby allowing credentialed media organizations like Morris to syndicate compiled real-time golf scores after paying a licensing fee to PGA. Accordingly, we conclude from the record that PGA has satisfied its burden to show a valid business justification.