Opinion ID: 2833669
Heading Depth: 2
Heading Rank: 2

Heading: Boycott

Text: In a number of its agreements with convenience stores, Coke gave retailers a discount on best-selling drinks if retailers promised not to carry competitors to its new root beer, orange, and grape drinks. This is a boycott. [60] There was evidence a jury could credit (and we must presume they did) that once Coke obtained an exclusive‑flavor agreement, it typically raised its prices. This is anticompetitive. Some boycotts are illegal per se, while others are subject to a rule-of-reason analysis. Generally, when boycotts (1) cut off access to “a market necessary to enable the boycotted firm to compete,” (2) are orchestrated by a firm with “[a] dominant position in the relevant market,” and (3) “are not justified by plausible arguments” of efficiency or competition, then a per se rule applies. [61] On the evidence introduced at trial, reasonable jurors could have concluded that Coke met all three requirements. Generally, only horizontal boycotts are illegal per se, as a single customer may always choose to change suppliers (or vice versa). [62] But horizontal agreements need not be instigated by competitors; they can be imposed by dominant firms above or below them. Thus, for example, when a retailer persuaded its 10 manufacturers not to sell to the retailer’s small competitor, the Supreme Court used a per se analysis, rejecting as a matter of law a defense that the boycott did not hurt competition but only one competitor. [63] Similarly, when a group of stores persuaded dress designers and manufacturers not to deal with stores carrying competing designs, the Supreme Court used a per se analysis, refusing to consider evidence that the boycott was reasonable and procompetitive. [64] Even if Coke’s conduct were considered a vertical boycott and the rule of reason applied, no elaborate industry analysis would be required to demonstrate the anticompetitive nature of these agreements. “Absent some countervailing procompetitive virtue . . . an agreement limiting consumer choice by impeding the ‘ordinary give and take of the market place,’ cannot be sustained under the Rule of Reason.” [65] There may be good business reasons to limit soft drink brands in airplane cabins or fast-food franchises, but there is no evidence that is true of the supermarkets and convenience stores here. While businesses may generally make vertical agreements about whose products to carry without proferring a business reason, a monopolist like Coke cannot impose such a regime when it makes “an important change in a pattern of distribution that had originated in a competitive market and had persisted for several years.” [66] Coke advances no credible argument for the proposition that giving consumers fewer choices enhanced competition. [67]