Opinion ID: 2833669
Heading Depth: 2
Heading Rank: 1

Heading: Price Fixing

Text: In some markets in the Ark-La-Tex region, Coke required that retailers price all other soft drinks higher than its own. Indeed, Coke sometimes specified that competing products had to be priced at least 30 4 higher than Coke’s. Coke could lower its prices to beat the competition, but paying retailers to raise its competitors’ prices is price-fixing, pure and simple, and it has been illegal for a long time. For many years, all price-fixing agreements were deemed unlawful per se. [51] Indeed, they were the “archetypal example” of a practice without redeeming competitive value. [52] In 1997 the Supreme Court made an exception for vertical [53] agreements fixing maximum prices, subjecting them to a rule-of-reason analysis. [54] As the Court noted, a price ceiling keeps consumer prices low, and thus does not generally threaten competition. [55] But a price floor keeps prices artificially high, and so remains illegal per se. [56] Because Coke’s contracts fixed minimum prices, there is no question they fall in the latter category. Coke argues there was no evidence that all soft drink prices in the Ark-La-Tex region increased. But while the bottlers presented contrary evidence (which we must presume the jury credited), the main problem is that Coke’s agreements were illegal even if they lowered prices, as it is no defense to price-fixing that the prices fixed were reasonable. [57] Coke also argues that price-fixing is not illegal without a specified resale price. But agreement on a specific price is not required; an agreement that sets a floor on prices is illegal per se even if that floor sometimes varies. [58] It can be argued that fixing minimum prices is sometimes procompetitive, as when a supplier wants dealers to furnish services they could not afford without a guaranteed margin. [59] But there is no evidence this is the case with soft drinks; moreover, Coke’s agreements sought to control not its own prices but those of its competitors. As the sole purpose of these agreements was to keep the price of all competing soft drinks higher than they otherwise would have been, they were illegal per se.