Opinion ID: 775962
Heading Depth: 2
Heading Rank: 6

Heading: Effect on Competition and Antitrust Injury

Text: 68 An antitrust plaintiff must allege not only cognizable harm to herself, but an adverse effect on competition market-wide. See Elecs. Communications Corp. v. Toshiba Am. Consumer Prods., Inc., 129 F.3d 240, 242 (2d Cir. 1997). In the traditional oligopoly case, horizontal coordination may inflate prices to supracompetitive levels. In an oligopsony, the risk is that buyers will collude to depress prices, causing harm to sellers. However, information exchange is not always anticompetitive and can enhance competition by making competitors more sensitive to each other's price changes, enhancing rivalry among them. See Gypsum, 438 U.S. at 441 n.16; Maple Flooring, 268 U.S. at 582-83. 69 The complaint in this case, however, points to anticompetitive effects the exchanges have had on MPT salaries market-wide, most particularly with respect to Exxon. Plaintiff specifically alleges that salary levels across the integrated oil and petrochemical industry have been artificially depressed because the information exchange has reduced competitive incentives. Compl. ¶¶ 102-103. Moreover, Exxon has supposedly used the information to reduce its competitive factor from 6.5% in 1991 to 0% in 1995, id.¶ 109, to reduce its salaries 4.1% between 1987 and 1994 in comparison to the Six Majors, id. ¶ 75, and to reduce its salary index in relation to the competition from 110.7% in 1987 to 107.0% in 1993, id. ¶¶ 89, 113. In her claim for relief, plaintiff again alleges that she received compensation materially below what she would have received in an uncontaminated marketplace. Id. ¶¶ 128, 132. 70 The district court found that the pleadings support, if anything, an inference that each defendant oil company used the information exchanged to stake out an optimal competitive level for its MPT salaries. Todd, 126 F. Supp. 2d at 327. The district court interprets the decrease in the competitive factor as indicat[ing] that Exxon was raising its salaries to meet the competition. Id. The court concludes that [r]aising salary levels to meet the competition and attract highly qualified employees is certainly not evidence of a conspiracy to restrain trade. Id. We read the complaint differently. The fact that Exxon increased its salaries each year would not defeat an allegation that those increases were lower than they would have been but for a conspiracy to stabilize prices. We understand the complaint as alleging a market where Exxon's salaries and those of the Six Majors continue to increase, but where the difference grows gradually smaller - a portrait of market stabilization. 71 Plaintiff further claims that information exchanged at the meetings among defendants and in the Advancement Guides created by defendants were used by Exxon to `slow down' its employee advancement rates, reduce the payments made to the uppermost members of some of its employee classifications, and lower the top classification levels for most of its job families. Compl. ¶ 89. According to the complaint, [t]he result has slowed the advancement rate at Exxon by two to eight years. Id. ¶ 79. 72 In all, plaintiff alleges that with Exxon's total salary budget at $800 million, the conduct described in the complaint had the effect of lowering Exxon's MPT salaries by a total of $20 million per year. Id. ¶ 113. Whether this is so is a question of fact that cannot be resolved on this Rule 12(b)(6) motion. Plaintiff will have to make a substantial presentation of evidence to support her claim that salaries would have been higher without the information exchange. Furthermore, we agree with plaintiff that the economic effects of the arrangement with respect to the other defendants is an appropriate matter for discovery.