Court Opinion

ID: 9429668
Source: CourtListenerOpinion
Date Created: 2023-08-02 23:27:34.489867+00
Date Added: 2024-06-11T17:23:20.799338
License: Public Domain

Justice Stevens,
with whom Justice Brennan and Justice Marshall join,
dissenting.
It is safe to assume that corporate affiliates do not vigorously compete with one another. A price-fixing or market-allocation agreement between two or more such corporate entities does not, therefore, eliminate any competition that would otherwise exist. It makes no difference whether such an agreement is labeled a “contract,” a “conspiracy,” or merely a policy decision, because it surely does not unreasonably restrain competition within the meaning of the Sherman Act. The Rule of Reason has always given the courts adequate latitude to examine the substance rather than the form of an arrangement when answering the question whether collective action has restrained competition within the meaning of § 1.
Today the Court announces a new per se rule: a wholly owned subsidiary is incapable of conspiring with its parent under §1 of the Sherman Act. Instead of redefining the word “conspiracy,” the Court would be better advised to continue to rely on the Rule of Reason. Precisely because they do not eliminate competition that would otherwise exist but rather enhance the ability to compete, restraints which enable effective integration between a corporate parent and its subsidiary — the type of arrangement the Court is properly concerned with protecting — are not prohibited by § 1. Thus, the Court’s desire to shield such arrangements from antitrust liability provides no justification for the Court’s new rule.
In contrast, the case before us today presents the type of restraint that has precious little to do with effective integration between parent and subsidiary corporations. Rather, the purpose of the challenged conduct was to exclude a potential competitor of the subsidiary from the market. The jury apparently concluded that the two defendant corporations— *779Copperweld and its subsidiary Regal — had successfully delayed Independence’s entry into the steel tubing business by applying a form of economic coercion to potential suppliers of financing and capital equipment, as well as to potential customers. Everyone seems to agree that this conduct was tortious as a matter of state law. This type of exclusionary conduct is plainly distinguishable from vertical integration designed to achieve competitive efficiencies. If, as seems to be the case, the challenged conduct was manifestly anti-competitive, it should not be immunized from scrutiny under § 1 of the Sherman Act.
h — I
Repudiation of prior cases is not a step that should be taken lightly. As the Court wrote only days ago: “[A]ny departure from the doctrine of stare decisis demands special justification.” Arizona v. Rumsey, ante, at 212. It is therefore appropriate to begin with an examination of the precedents.
In United States v. Yellow Cab Co., 332 U. S. 218 (1947), the Court explicitly stated that a corporate subsidiary could conspire with its parent:
“The fact that these restraints occur in a setting described by the appellees as a vertically integrated enterprise does not necessarily remove the ban of the Sherman Act. The test of illegality under the Act is the presence or absence of an unreasonable restraint on interstate commerce. Such a restraint may result as readily from a conspiracy among those who are affiliated or integrated under common ownership as from a conspiracy among those who are otherwise independent.” Id., at 227.
The majority attempts to explain Yellow Cab by suggesting that it dealt only with unlawful acquisition of subsidiaries. Ante, at 761-762. But the Court mentioned acquisitions only as an additional consideration separate from the passage *780quoted above,1 and more important, the Court explicitly held that restraints imposed by the corporate parent on the affiliates that it already owned in themselves violated § l.2
At least three cases involving the motion picture industry also recognize that affiliated corporations may combine or conspire within the meaning of §1. In United States v. Crescent Amusement Co., 323 U. S. 173 (1944), as the Court recognizes, ante, at 762, n. 6, the only conspirators were affiliated corporations. The majority’s claim that the case involved only unlawful acquisitions because of the Court’s comments concerning divestiture of the affiliates cannot be squared with the passage immediately following that cited by the majority, which states that there had been unlawful conduct going beyond the acquisition of subsidiaries:
“That principle is adequate here to justify divestiture of all interest in some of the affiliates since their acquisition was part of the fruits of the conspiracy. But the relief need not, and under these facts should not, be so restricted [to divestiture]. The fact that the companies were affiliated induced joint action and agreement. Common control was one of the instruments in bringing about unity of purpose and unity of action and in making the conspiracy effective. If that affiliation continues, *781there will be tempting opportunity for these exhibitors to continue to act in combination against the independents.” 323 U. S., at 189-190 (emphasis supplied).
Similarly, in Schine Chain Theatres, Inc. v. United States, 334 U. S. 110 (1948), the Court held that concerted action by parents and subsidiaries constituted an unlawful conspiracy.3 That was also the holding in United States v. Griffith, 334 U. S. 100, 109 (1948). The majority’s observation that in these cases there were alternative grounds that could have been used to reach the same result, ante, at 763, n. 8, disguises neither the fact that the holding that actually appears in these opinions rests on conspiracy between affiliated entities, nor that today’s holding is inconsistent with what was actually held in these cases.
In Kiefer-Stewart Co. v. Joseph E. Seagram & Sons, Inc., 340 U. S. 211 (1951), the Court’s holding was plain and unequivocal: *782This holding is so clear that even the Court, which is not wanting for inventiveness in its reading of the prior cases, cannot explain it away. The Court suggests only that today Kiefer-Stewart might be decided on alternative grounds, ante, at 764, ignoring the fact that today’s holding is inconsistent with the ground on which the case actually was decided.4
*781“Respondents next suggest that their status as ‘mere in-strumentalities of a single manufacturing-merchandizing unit’ makes it impossible for them to have conspired in a manner forbidden by the Sherman Act. But this suggestion runs counter to our past decisions that common ownership and control does not liberate corporations from the impact of the antitrust laws. E. g. United States v. Yellow Cab Co., 332 U. S. 218. The rule is especially applicable where, as here, respondents hold themselves out as competitors.” Id., at 215.
*782A construction of the statute that reaches agreements between corporate parents and subsidiaries was again embraced by the Court in Timken Roller Bearing Co. v. United States, 341 U. S. 598 (1951),5 and Perma Life Mufflers, Inc. v. International Parts Corp., 392 U. S. 134 (1968).6 The majority only notes that there might have been . other grounds for decision available in these cases, ante, at 764-766, but again it cannot deny that its new rule is inconsistent with what the Court actually did write in these cases.
*783Thus, the rule announced today is inconsistent with what this Court has held on at least seven previous occasions.7 Perhaps most illuminating is the fact that until today, whether they favored the doctrine or not, it had been the universal conclusion of both the lower courts8 and the commentators9 that this Court’s cases establish that a parent *784and a wholly owned subsidiary corporation are capable of conspiring in violation of § 1. In this very case the Court of Appeals observed:
“[T]he salient factor is that the Supreme Court’s decisions, while they need not be read with complete literalism, of course they cannot be ignored. It is no accident that every Court of Appeals to consider the question has concluded that a parent and its subsidiary have the same capacity to conspire, whether or not they can be found to have done so in a particular case.” 691 F. 2d 310, 317 (CA7 1982) (footnotes omitted).
Thus, we are not writing on a clean slate. “[W]e must bear in mind that considerations of stare decisis weigh heavily in the area of statutory construction, where Congress is free to change this Court’s interpretation of its legislation.” Illinois Brick Co. v. Illinois, 431 U. S. 720, 736 (1977).10 There can be no doubt that the Court today changes what has been taken to be the long-settled rule: a rule that Congress did not revise at any point in the last four decades. At a minimum there should be a strong presumption against the approach taken today by the Court. It is to the merits of that approach that I now turn.
II
The language of § 1 of the Sherman Act is sweeping m its breadth: “Every contract, combination in the form of trust or *785otherwise, or conspiracy, in restraint of trade or commerce among the several States, ... is declared to be illegal.” 15 U. S. C. § 1. This Court has long recognized that Congress intended this language to have a broad sweep, reaching any form of combination:
“[I]n view of the. many new forms of contracts and combinations which were being evolved from existing economic conditions, it was deemed essential by an all-embracing enumeration to make sure that no form of contract or combination by which an undue restraint of interstate or foreign commerce was brought about could save such restraint from condemnation. The statute under this view evidenced the intent not to restrain the right to make and enforce contracts, whether resulting from combination or otherwise, which did not unduly restrain interstate or foreign commerce, but to protect that commerce from being restrained by methods, whether old or new, which would constitute an interference that is an undue restraint.” Standard Oil Co. v. United States, 221 U. S. 1, 59-60 (1911).
This broad construction is illustrated by the Court’s refusal to limit the statute to actual agreements. Even mere acquiescence in an anticompetitive scheme has been held sufficient to satisfy the statutory language.11
Since the statute was written against the background of the common law,12 reference to the common law is particularly enlightening in construing the statutory requirement of a “contract, combination in the form of trust or otherwise, or conspiracy.” Under the common law, the question whether *786affiliated corporations constitute a plurality of actors within the meaning of the statute is easily answered. The well-settled rule is that a corporation is a separate legal entity; the separate corporate form cannot be disregarded.13 The Congress that passed the Sherman Act was well acquainted with this rule. See 21 Cong. Rec. 2571 (1890) (remarks of Sen. Teller) (“Each corporation is a creature by itself”). Thus it has long been the law of criminal conspiracy that the officers of even a single corporation are capable of conspiring with each other or the corporation.14 This Court has held that a corporation can conspire with its employee,15 and that a labor union can “combine” with its business agent within the meaning of § l.16 This concept explains the Timken Court’s statement that the affiliated corporations in that case made *787“agreements between legally separate persons,” 341 U. S., at 598. Thus, today’s holding that agreements between parent and subsidiary corporations involve merely unilateral conduct is at odds with the way that this Court has traditionally understood the concept of a combination or conspiracy, and also at odds with the way in which the Congress that enacted the Sherman Act surely understood it.
Holding that affiliated corporations cannot constitute a plurality of actors is also inconsistent with the objectives of the Sherman Act. Congress was particularly concerned with “trusts,” hence it named them in § 1 as a specific form of “combination” at which the statute was directed. Yet “trusts” consisted of affiliated corporations. As Senator Sherman explained:
“Because these combinations are always in many States and, as the Senator from Missouri says, it will be very easy for them to make a corporation within a State. So they can; but that is only one corporation of the combination. The combination is always of two or more, and in one case of forty-odd corporations, all bound together by a link which holds them under the name of trustees, who are themselves incorporated under the laws of one of the States.” 21 Cong. Rec. 2569 (1890).
The activities of these “combinations” of affiliated corporations were of special concern:
“[Associated enterprise and capital are not satisfied with partnerships and corporations competing with each other, and have invented a new form of combination commonly called trusts, that seeks to avoid competition by combining the controlling corporations, partnerships, and individuals engaged in the same business, and placing the power and property of the combination under the government of a few individuals, and often under the control of a single man called a trustee, a chairman, or a president.
*788“The sole object of such a combination is to make competition impossible. It can control the market, raise or lower prices, as will best promote its selfish interests, reduce prices in a particular locality and break down competition and advance prices at will where competition does not exist. Its governing motive is to increase the profits of the parties composing it. The law of selfishness, uncontrolled by competition, compels it to disregard the interest of the consumer. It dictates terms to transportation companies, it commands the price of labor without fear of strikes, for in its field it allows no competitors. ... It is this kind of a combination we have to deal with now.” Id., at 2457.17
Thus, the corporate subsidiary, when used as a device to eliminate competition, was one of the chief evils to which the Sherman Act was addressed.18 The anomaly in today’s holding is that the corporate devices most similar to the original “trusts” are now those which free an enterprise from antitrust scrutiny.
*789h — ( I — ( l-H
The Court s reason for rejecting the concept of a combination or conspiracy among a parent corporation and its wholly owned subsidiary is that it elevates form over substance— while in form the two corporations are separate legal entities, in substance they are a single integrated enterprise and hence cannot comprise the plurality of actors necessary to satisfy §1. Ante, at 771-774. In many situations the Court’s reasoning is perfectly sensible, for the affiliation of corporate entities often is procompetitive precisely because, as the Court explains, it enhances efficiency. A challenge to conduct that is merely an incident of the desirable integration that accompanies such affiliation should fail. However, the protection of such conduct provides no justification for the Court’s new rule, precisely because such conduct cannot be characterized as an unreasonable restraint of trade violative of § 1. Conversely, the problem with the Court’s new rule is that it leaves a significant gap in the enforcement of § 1 with respect to anticompetitive conduct that is entirely unrelated to the efficiencies associated with integration.
Since at least United States v. Colgate & Co., 250 U. S. 300 (1919), § 1 has been construed to require a plurality of actors. This requirement, however, is a consequence of the plain statutory language, not of any economic principle. As an economic matter, what is critical is the presence of market power, rather than a plurality of actors.19 From a competitive standpoint, a decision of a single firm possessing power to reduce output and raise prices above competitive levels has the same consequence as a decision by two firms acting together who have acquired an equivalent amount of market *790power through an agreement not to compete.20 Unilateral conduct by a firm with market power has no less anticompet-itive potential than conduct by a plurality of actors which generates or exploits the same power,21 and probably more, since the unilateral actor avoids the policing problems faced by cartels.
The rule of Yellow Cab thus has an economic justification. It addresses a gap in antitrust enforcement by reaching anti-competitive agreements between affiliated corporations which *791have sufficient market power to restrain marketwide competition, but not sufficient power to be considered monopolists within the ambit of §2 of the Act.22 The doctrine is also useful when a third party declines to join a conspiracy to restrain trade among affiliated corporations, and is harmed as a result through a boycott or similar tactics designed to penalize the refusal. In such cases, since there has been no agreement with the third party, only an agreement between the affiliated corporations can be the basis for § 1 inquiry.23 Finally, it must be remembered that not all persons who restrain trade wear grey flannel suits. Businesses controlled by organized crime often attempt to gain control of an industry through violence or intimidation of competitors; in such cases § 1 can be applied to separately incorporated businesses which benefit from such tactics, but which may be ultimately controlled by a single criminal enterprise.24
*792The rule of Yellow Cab and its progeny is not one that condemns every parent-subsidiary relationship. A single firm, no matter what its corporate structure may be, is not expected to compete with itself.25 Functional integration by its very nature requires unified action; hence in itself it has never been sufficient to establish the existence of an unreasonable restraint of trade: “In discussing the charge in the Yellow Cab case, we said that the fact that the conspirators were integrated did not insulate them from the act, not that corporate integration violated the act.” United States v. Columbia Steel Co., 334 U. S. 495, 522 (1948). Restraints that act only on the parent or its subsidiary as a consequence of an otherwise lawful integration do not violate § 1 of the Sherman Act.26 But if the behavior at issue is unrelated to any functional integration between the affiliated corporations and *793imposes a restraint on third parties of sufficient magnitude to restrain marketwide competition, as a matter of economic substance, as well as form, it is appropriate to characterize the conduct as a “combination or conspiracy in restraint of trade.”27
For example, in Yellow Cab the Court read the complaint as alleging that integration had assisted the parent in excluding competing manufacturers from the marketplace, 332 U. S., at 226-227, leading the Court to conclude that “restraint of interstate trade was not only effected by the combination of the appellees but was the primary object of the combination.” Id., at 227. Similarly, in Crescent Amusement the Court noted that corporate affiliation between exhibitors enhanced their buying power and “was one of the instruments in . . . making the conspiracy effective” in excluding independents from the market. 323 U. S., at 189-190. Thus, in both cases the Court found that the affiliation enhanced the ability of the parent corporation to exclude the competition of third parties, and hence raised entry *794barriers faced by actual and potential competitors. When conduct restrains trade not merely by integrating affiliated corporations but rather by restraining the ability of others to compete, that conduct has competitive significance drastically different from procompetitive integration.28 In these cases, the affiliation assisted exclusionary conduct; it was not the competitive equivalent of unilateral integration but instead generated power to restrain marketwide competition.
There are other ways in which corporate affiliation can operate to restrain competition. A wholly owned subsidiary might market a “fighting brand” or engage in other predatory behavior that would be more effective if its ownership were concealed than if it was known that only one firm was involved. A predator might be willing to accept the risk of bankrupting a subsidiary when it could not afford to let a division incur similar risks. Affiliated corporations might enhance their power over suppliers by agreeing to refuse to deal with those who deal with an actual or potential com*795petitor of one of them; such a threat might be more potent coming from both corporations than from only one.29
In this case, it may be that notices to potential suppliers of respondent emanating from Copperweld carried more weight than would notices coming only from Regal. There was evidence suggesting that Regal and Copperweld were not integrated, and that the challenged agreement had little to do with achieving procompetitive efficiencies and much to do with protecting Regal’s market position. The Court does not even try to explain why their common ownership meant that Copperweld and Regal were merely obtaining benefits associated with the efficiencies of integration. Both the District Court and the Court of Appeals thought that their agreement had a very different result — that it raised barriers to entry and imposed an appreciable marketwide restraint. The Court’s discussion of the justifications for corporate affiliation is therefore entirely abstract — while it dutifully lists the procompetitive justifications for corporate affiliation, ante, at 772-774, it fails to explain how any of them relate to the conduct at issue in this case. What is challenged here is not the fact of integration between Regal and Copperweld, but their specific agreement with respect to Independence. That agreement concerned the exclusion of *796Independence from the market, and not any efficiency resulting from integration. The facts of this very case belie the conclusion that affiliated corporations are incapable of engaging in the kind of conduct that threatens marketwide competition. The Court does not even attempt to assess the competitive significance of the conduct under challenge here — it never tests its economic assumptions against the concrete facts before it. Use of economic theory without reference to the competitive impact of the particular economic arrangement at issue is properly criticized when it produces overly broad per se rules of antitrust liability;30 criticism is no less warranted when a per se rule of antitrust immunity is adopted in the same way.
In sum, the question that the Court should ask is not why a wholly owned subsidiary should be treated differently from a corporate division, since the immunity accorded that type of arrangement is a necessary consequence of Colgate. Rather the question should be why two corporations that engage in a predatory course of conduct which produces a marketwide restraint on competition and which, as separate legal entities, can be easily fit within the language of § 1, should be immunized from liability because they are controlled by the same godfather. That is a question the Court simply fails to confront. I respectfully dissent.

 The language I have quoted, most of which is overlooked by the majority, makes it clear that the Court’s adoption of the concept of conspiracy between affiliated corporations was unqualified. As the first word of the sentence indicates, the Court’s following statement: “Similarly, any affiliation or integration flowing from an illegal conspiracy cannot insulate the conspirators from the sanctions which Congress has imposed,” 332 U. S., at 227, expresses a separate if related point.

 “[B]y preventing the cab operating companies under their control from purchasing cabs from manufacturers other than CCM, the appellees deny those companies the opportunity to purchase cabs in a free, competitive market. The Sherman Act has never been thought to sanction such a conspiracy to restrain the free purchase of goods in interstate commerce.” Id., at 226-227 (footnote omitted).

 “[T]he combining of the open and closed towns for the negotiation of films for the circuit was a restraint of trade and the use of monopoly power in violation of § 1 and § 2 of the Act. The concerted action of the parent company, its subsidiaries, and the named officers and directors in that endeavor was a conspiracy which was not immunized by reason of the fact that the members were closely affiliated rather than independent. See United States v. Yellow Cab Co., 332 U. S. 218, 227; United States v. Crescent Amusement Co., 323 U. S. 173. 334 U. S., at 116.

 In Kiefer-Stewart, Seagram unsuccessfully argued that Yellow Cab was confined to cases concerning unlawful acquisitions, see Brief for Respondents, O. T. 1950, No. 297, p. 21. Thus the Kiefer-Stewart Court considered and rejected exactly the same argument embraced by today’s majority.

 “The fact that there is common ownership or control of the contracting corporations does not liberate them from the impact of the antitrust laws. E. g., Kiefer-Stewart Co. v. Seagram & Sons, [340 U. S.,] at 215. Nor do we find any support in reason or authority for the proposition that agreements between legally separate persons and companies to suppress competition among themselves and others can be justified by labeling the project a ‘joint venture.’ Perhaps every agreement and combination to restrain trade could be so labeled.” 341 U. S., at 598.

 “There remains for consideration only the Court of Appeals’ alternative holding that the Sherman Act claim should be dismissed because respondents were all part of a single business entity and were therefore entitled to cooperate without creating an illegal conspiracy. But since respondents Midas and International availed themselves of the privilege of doing business through separate corporations, the fact of common ownership could not save them from any of the obligations that the law imposes on separate entities. See Timken Co. v. United States, 341 U. S. 593, 598 (1951); United States v. Yellow Cab Co., 332 U. S. 218, 227 (1947).” 392 U. S., at 141-142.

 Also pertinent is United, States v. Citizens & Southern National Bank, 422 U. S. 86 (1975), in which the Court wrote:
“The central message of the Sherman Act is that a business entity must find new customers and higher profits through internal expansion — that is, by competing successfully rather than by arranging treaties with its competitors. This Court has held that even commonly owned firms must compete against each other, if they hold themselves out as distinct entities. ‘The corporate interrelationships of the conspirators . . . are not determinative of the applicability of the Sherman Act.’ United States v. Yellow Cab Co., 332 U. S. 218, 227. See also Kiefer-Stewart Co. v. Joseph E. Seagram & Sons, Inc., 340 U. S. 211, 215; Timken Roller Bearing Co. v. United States, 341 U. S. 593, 598; Perma Life Mufflers, Inc. v. International Parts Corp., 392 U. S. 134, 141-142.” Id., at 116-117.

 See, e. g., William Inglis & Sons Baking Co. v. ITT Continental Baking Co., 668 F. 2d 1014, 1054 (CA9), cert. denied, 459 U. S. 825 (1982); Ogilvie v. Fotomat Corp., 641 F. 2d 581, 587-588 (CA8 1981); Las Vegas Sun, Inc. v. Summa Corp., 610 F. 2d 614, 617-618 (CA9 1979), cert. denied, 447 U. S. 906 (1980); Photovest Corp. v. Fotomat Corp., 606 F. 2d 704, 726 (CA7 1979), cert. denied, 445 U. S. 917 (1980); Columbia Metal Culvert Co. v. Kaiser Aluminum & Chemical Corp., 579 F. 2d 20, 33-35, and n. 49 (CA3), cert. denied, 439 U. S. 876 (1978); H & B Equipment Co. v. International Harvester Co., 577 F. 2d 239, 244-245 (CA5 1978); George R. Whitten, Jr., Inc. v. Paddock Pool Builders, Inc., 508 F. 2d 547, 557 (CA1 1974), cert. denied, 421 U. S. 1004 (1975).

 See, e. g., Report of the Attorney General’s National Committee to Study the Antitrust Laws 30-36 (1955) (hereinafter cited as Attorney General’s Committee Report); L. Sullivan, Law of Antitrust § 114 (1977); Areeda, Intraenterprise Conspiracy in Decline, 97 Harv. L. Rev. 451 (1983); Handler, Through the Antitrust Looking Glass — Twenty-First Annual Antitrust Review, 57 Calif. L. Rev. 182, 182-193 (1969); Handler & Smart, The Present Status of the Intracorporate Conspiracy Doctrine, 3 Cardozo L. Rev. 23, 26-61 (1981); McQuade, Conspiracy, Multicorporate Enterprises, and Section 1 of the Sherman Act, 41 Va. L. Rev. 183, 188-212 (1955); Willis & Pitofsky, Antitrust Consequences of Using Corporate Subsidiaries, 43 N. Y. U. L. Rev. 20, 22-24 (1968); Comment, *784Intraenterprise Antitrust Conspiracy: A Decisionmaking Approach, 71 Calif. L. Rev. 1732,1739-1745 (1983) (hereinafter cited as Comment, Deci-sionmaking); Comment, All in the Family: When Will Internal Discussions Be Labeled Intra-Enterprise Conspiracy?, 14 Duquesne L. Rev. 63 (1975); Note, “Conspiring Entities” Under Section 1 of the Sherman Act, 95 Harv. L. Rev. 661 (1982); Note, Intra-Enterprise Conspiracy Under Section 1 of the Sherman Act: A Suggested Standard, 75 Mich. L. Rev. 717, 718-727 (1977) (hereinafter cited as Note, Suggested Standard).

 See also Monsanto Co. v. Spray-Rite Service Co., 465 U. S. 752, 769 (1984) (BRENNAN, J., concurring).

 See Albrecht v. Herald Co., 390 U. S. 145, 149 (1968); United States v. Parke, Davis & Co., 362 U. S. 29, 44 (1960). See also Monsanto Co. v. Spray-Rite Service Co., 465 U. S., at 764, n. 9.

 E. g., Associated General Contractors of California, Inc. v. Carpenters, 459 U. S. 519, 531-532 (1983); National Society of Professional Engineers v. United States, 435 U. S. 679, 687-688 (1978); Standard Oil, 221 U. S. at 59.

 See, e. g., Schenley Corp. v. United States, 326 U. S. 432, 437 (1946) (per curiam); New Colonial Ice Co. v. Helvering, 292 U. S. 435, 440-442 (1934); Burnet v. Clark, 287 U. S. 410 (1932); Louisville, C. & C. R. Co. v. Letson, 2 How. 497, 558-559 (1844); Bank of the United States v. Deveaux, 5 Cranch 61 (1809).

 Attorney General’s Committee Report, supra n. 9, at 30-31 (citing Barron v. United States, 5 F. 2d 799 (CA1 1925); Mininsohn v. United States, 101 F. 2d 477 (CA3 1939); Egan v. United States, 137 F. 2d 369 (CA8), cert. denied, 320 U. S. 788 (1943)). See also, e. g., United States v. Hartley, 678 F. 2d 961, 971-972 (CA11 1982), cert. denied, 459 U. S. 1170 (1983); Alamo Fence Co. of Houston v. United States, 240 F. 2d 179 (CA5 1957); Patterson v. United States, 222 F. 599, 618-619 (CA6), cert. denied, 238 U. S. 635 (1915); Union Pacific Coal Co. v. United States, 173 F. 737 (CA8 1909); United States v. Consolidated Coal Co., 424 F. Supp. 577, 579-581 (SD Ohio 1976); United States v. Griffin, 401 F. Supp. 1222, 1224-1225 (SD Ind. 1975), aff’d mem. sub nom. United States v. Metro Management Corp., 541 F. 2d 284 (CA7 1976); United States v. Bridell, 180 F. Supp. 268, 273 (ND Ill. 1960); United States v. Kemmel, 160 F. Supp. 718 (MD Pa. 1958); Welling, Intracorporate Plurality in Criminal Conspiracy Law, 33 Hastings L. J. 1155, 1191-1199 (1982).

 See Hyde v. United States, 225 U. S. 347, 367-368 (1912). See also United States v. Sampson, 371 U. S. 75 (1962); Fong Foo v. United States, 369 U. S. 141 (1962) (per curiam); Lott v. United States, 367 U. S. 421 (1961); Nye & Nissen v. United States, 336 U. S. 613 (1949).

 See Duplex Printing Press Co. v. Deering, 254 U. S. 443, 465 (1921).

 See also 21 Cong. Rec. 2562 (1890) (remarks of Sen. Teller); id., at 2570 (remarks of Sen. Sherman); id., at 2609 (remarks of Sen. Morgan).

 This legislative history thus demonstrates the error in the majority’s conclusion that only acquisitions of corporate affiliates fall within § 1. See ante, at 761-762. The conduct of the trusts that Senator Sherman and others objected to went much further than mere acquisitions. Indeed, the irony of the Court’s approach is that, had it been adopted in 1890, it would have meant that § 1 would have no application to trust combinations which had already been formed — the very trusts to which Senator Sherman was referring.
I cannot believe that the Court really intends to express doubt as to whether the Congress that passed the Sherman Act thought conspiracy doctrine could apply to corporations. Ante, at 775-776, n. 24. If that were not the case, then the Sherman Act would have no application to corporations. Since, as is clear and as the Court concedes, the Sherman Act does apply to corporations, there can be no doubt that Congress intended to apply the law of conspiracy to agreements between corporations.

 Market power is the ability to raise prices above those that would be charged in a competitive market. See Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U. S. 2, 27, n. 46 (1984); United States Steel Corp. v. Fortner Enterprises, Inc., 429 U. S. 610, 620 (1977); United States v. E. I. du Pont de Nemours & Co., 351 U. S. 377, 391 (1956).

 Significantly, the Court never suggests that the plurality-of-actors requirement has any intrinsic economic significance. Rather, it suggests that the requirement has evidentiary significance: combinations are more likely to signal anticompetitive conduct than is unilateral activity: “In any conspiracy, two or more entities that previously pursued their own interests separately are combining to act as one for their common benefit. This not only reduces the diverse directions in which economic power is aimed but suddenly increases the economic power moving in one particular direction.” Ante, at 769. That is true, but it is also true of any ordinary commercial contract between separate entities, as can be seen if one substitutes the word “contract” for “conspiracy” in the passage I have quoted. The language of the Sherman Act indicates that it treats “contracts” and “conspiracies” as equivalent concepts — both satisfy the multiplicity-of-aetors requirement — and yet one of the most fundamental points in antitrust jurisprudence, dating at least to Standard Oil, is that there is nothing inherently anticompetitive about a contract. Similarly, an agreement to act “for common benefit” in itself is unremarkable — all agreements are in some sense a restraint of trade be they contracts or conspiracies. It is only when trade is unreasonably restrained that § 1 is implicated. The Court’s evidentiary concern lacks merit.

 We made this point in the context of resale price maintenance in United States v. Parke, Davis & Co., 362 U. S. 29 (1960):
“The Sherman Act forbids combinations of traders to suppress competition. True, there results the same economic effect as is accomplished by a prohibited combination to suppress price competition if each customer, although induced to do so solely by a manufacturer’s announced policy, independently decides to observe specified resale prices. So long as Colgate is not overruled, this result is tolerated but only when it is the consequence of a mere refusal to sell in the exercise of a manufacturer’s right ‘freely to exercise his own independent discretion as to parties with whom he will deal.’” Id., at 44 (quoting Colgate, 250 U. S., at 307).

 “[lit is the potential which this conspiracy concept holds for the development of a rational enforcement policy which, if anything, will ultimately attract the courts. If conduct of a single corporation which restrains trade were to violate Section 1, a forceful weapon would be available to the government with which to challenge conduct which in oligopolistic industries creates or reinforces entry barriers. Excessive advertising in the cereal, drug, or detergent industries, annual style changes in the auto industry, and other such practices could be reached as soon as they threatened to inhibit competition; there would be no need to wait until a ‘dangerous probability’ of monopoly had been reached, the requirement under Section 2 ‘attempt’ doctrine. Nor would a single firm restraint of trade rule be overbroad. It would in no way threaten single firm activity — setting a price, deciding what market it would deal in, or the like — which did not threaten competitive conditions.” L. Sullivan, swpra n. 9, § 114, at 324 (footnotes omitted).

 This was the case in Kiefer-Stewart, for example. Seagram had refused to sell liquor to Kiefer-Stewart unless it agreed to an illegal resale price maintenance scheme. Kiefer-Stewart refused to agree, and as a result was injured by losing access to Seagram’s products. See 340 U. S., at 213.

 See United States v. Turkette, 452 U. S. 576, 588-593 (1981) (discussing congressional findings underlying the Organized Crime Control Act of 1970). Section 1 of the Sherman Act has on occasion been used against *792various types of racketeering activity. See Hartwell, Criminal RICO and Antitrust, 52 Antitrust L. J. 311, 312-313 (1983); McLaren, Antitrust and Competition — Review of the Past Year and Suggestions for the Future, in New York State Bar Assn., 1971 Antitrust Law Symposium 1, 3 (1971).

 See Comment, Decisionmaking, supra n. 9, at 1753-1757; Note, Suggested Standard, supra n. 9, at 735-738. Professor Sullivan elaborates:
“Picture, at one end of the spectrum, a family business which operates one retail store in each of three or four adjacent communities. All of the stores are managed as a unit by one individual, the founder of the business who sets policy, does all the buying, decides on all the advertising, sets prices, and hires and fires all employees other than family members. The fact that each store is operated by a separate corporation should not convert a family business into a cartel.... If there is, as a practical matter, an integrated ownership and management, this small business is a single firm. And a single firm cannot compete with itself. Hence it cannot restrain price competition with itself, or divide markets with itself, or act as a common purchasing agent for itself or otherwise restrain competition with itself, regardless of how many separate corporations the single firm may, for reasons unrelated to the act, be divided into.” L. Sullivan, supra n. 9, § 114, at 326-327.

 Thus, the Court is wrong to suggest, ante, at 771-772, 774-776, and n. 24, that Yellow Cab could reach truly unilateral conduct involving only the employees of a single firm.

 If the rule of Yellow Cab and its progeny could be easily circumvented through, for example, use of unincorporated divisions instead of subsidiaries, then there would be reason to question its efficacy as a tool for rational antitrust enforcement. However, the Court is incorrect when it asserts, ante, at 770-771, 772-774, that there is no economic substance in a distinction between unincorporated divisions, which cannot provide a plurality of actors, and wholly owned subsidiaries, which under Yellow Cab can. If that were the ease, incorporated subsidiaries would never be used to achieve integration — the ready availability of an unincorporated alternative would always be employed in order to avoid antitrust liability. The answer is provided by the Court itself — the use of subsidiaries often makes possible operating efficiencies that are unavailable through the use of unincorporated divisions. Ante, at 772-774. We may confidently assume that any corporate parent whose contingent antitrust liability exceeds the savings it realizes through the use of subsidiaries already utilizes unincorporated divisions instead of corporate subsidiaries. Thus, it is more than merely a question of form when a decision is made to use corporate subsidiaries instead of unincorporated divisions, and the rule is not that easily circumvented.

 See L. Sullivan, supra n. 9, § 114, at 328 (“To have two competitors acting concertedly two separate firms, not just persons, are needed. Thus ‘concerted action’ by two ‘legal persons’ which is limited solely to the internal management of a single firm does not restrain competition; but ‘concerted action’ by two ‘legal persons’ which erects barriers to entry by another separate firm, a competitor or potential competitor, can be a restraint of trade”); see also Willis & Pitofsky, supra n. 9, at 38-41. The Attorney General’s National Committee to Study the Antitrust Laws made the same point in 1955:
“The substance of the Supreme Court decisions is that concerted action between a parent and subsidiary or between subsidiaries which has for its purpose or effect coercion or unreasonable restraint on the trade of strangers to those acting in concert is prohibited by Section 1. Nothing in these opinions should be interpreted as justifying the conclusion that concerted action solely between a parent and subsidiary or subsidiaries, the purpose and effect of which is not coercive restraint of the trade of strangers to the corporate family, violates Section 1. Where such concerted action restrains no trade and is designed to restrain no trade other than that of the parent and its subsidiaries, Section 1 is not violated.” Attorney General’s Committee Report, supra n. 9, at 34.

 Professor Sullivan provides another example:
“[P]icture a parent corporation and its wholly owned subsidiary (or two corporations wholly owned by the same parent or stockholder group) which operate, respectively, a newspaper and a radio station in the same city. If the radio station, which has no local competitors, were to deny advertising to a local business because the latter advertised in a rival newspaper, the integration between the two corporations, however close in terms of ownership or management or both, would not protect them from a charge of conspiracy to restrain trade. . . . [T]he concerted action here involved is not merely carrying on the business of a single integrated firm, it is action which is aimed at restraining trade by utilizing such market power as is possessed by the firm because of its radio station in order to erect a competitive barrier in front of a competitor of the firm’s newspaper.” L. Sullivan, swpra n. 9, § 114, at 327 (footnote omitted).

 E. g., Continental T.V., Inc. v. GTE Sylvania Inc., 433 U. S. 36 (1977).