Court Opinion

ID: 9432004
Source: CourtListenerOpinion
Date Created: 2023-08-02 23:33:53.679874+00
Date Added: 2024-06-11T17:23:31.516958
License: Public Domain

Justice Stevens,
with whom Justice White joins, dissenting.
The Court today purportedly defines only the contours of antitrust injury that can result from a vertical, nonpredatory, maximum-price-fixing scheme. But much, if not all, of its reasoning about what constitutes injury actionable by a competitor would apply even if the alleged conspiracy had been joined by other major oil companies doing business in California, as well as their retail outlets.1 The Court undermines the enforceability of a substantive price-fixing violation with a flawed construction of § 4, erroneously assuming that the level of a price fixed by a § 1 conspiracy is relevant to legality and that all vertical arrangements conform to a single model.
I
Because so much of the Court’s analysis turns on its characterization of USA’s cause of action, it is appropriate to *347begin with a more complete description of USA’s theory. As the case comes to us on review of summary judgment, we assume the truth of USA’s allegation that ARCO conspired with its retail dealers to fix the price of gas at specific ARCO stations that compete directly with USA stations. It is conceded that this price-fixing conspiracy is a per se violation of § 1 of the Sherman Act.
USA’s theory can be expressed in the following hypothetical example: In a free market ARCO’s advertised gas might command a price of $1 per gallon while USA’s unadvertised gas might sell for a penny less, with retailers of both brands making an adequate profit. If, however, the ARCO stations reduce their price by a penny or two, they might divert enough business from USA stations to force them gradually to withdraw from the market.2 The fixed price would be lower than the price that would obtain in a free market, but not so low as to be “predatory” in the sense that a single actor could not lawfully charge it under 15 U. S. C. § 2 or § 13a.3
This theory rests on the premise that the resources of the conspirators, combined and coordinated, are sufficient to sustain below-normal profits in selected localities long enough to force USA to shift its capital to markets where it can receive a normal return on its investment.4 Thus, during the initial *348period of competitive struggle between the conspirators and the independents, consumers will presumably benefit from artificially low prices. If the alleged campaign is successful, however — and as the case comes to us we must assume it will be — in the long run there will be less competition, or potential competition, from independents such as USA, and the character of the market will be different than if the conspiracy had never taken place. USA alleges that, in fact, the independent market already has suffered significant losses.5
II
ARCO’s alleged conspiracy is a naked price restraint in violation of § 1 of the Sherman Act, 15 U. S. C. § l.6 It is undisputed that ARCO’s price-fixing arrangement, as alleged, *349is illegal per se under the rule against maximum price fixing, which is “ ‘grounded on faith in price competition as a market force [and not] on a policy of low selling prices at the price of eliminating competition.’ Rahl, Price Competition and the Price Fixing Rule — Preface and Perspective, 57 Nw. U. L. Rev. 137, 142 (1962).” Arizona v. Maricopa County Medical Society, 457 U. S. 332, 348 (1982). At issue is only whether a maximum price, administered on a host of retail stations that are ostensibly competing with one another as well as with other retailers, may be challenged by the competitor targeted by the pricing scheme.
Section 4 of the Clayton Act allows private enforcement of the antitrust laws by “any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws.” 15 U. S. C. § 15. See Simpson v. Union Oil Co. of California, 377 U. S. 13, 16 (1964) (quoting Radovich v. National Football League, 352 U. S. 445, 454 (1957)) (laws allowing private enforcement of the antitrust laws by an aggrieved party “ ‘protect the victims of the forbidden practices as well as the public’ ”). In order to invoke § 4, a plaintiff must prove that it suffered an injury that (1) is “of the type the antitrust laws were intended to prevent” and (2) “flows from that which makes defendants’ acts unlawful.” Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U. S. 477, 489 (1977). In Brunswick, the plaintiff businesses claimed that they were deprived of the benefits of the increased concentration that would have resulted had failing businesses not been acquired by petitioner, allegedly in violation of § 7. In concluding that the plaintiffs had failed to prove “antitrust injury,” we found that neither condition of § 4 standing was satisfied: First, the plaintiffs sought to recover damages because the mergers had preserved businesses and competition, which is not the type of injury that the antitrust laws are designed to prevent; and second, the plaintiffs had not been harmed by any potential change in the market structure *350effected by the entry of the “‘deep pocket’ parent.” Id., at 487-488.
In this case, however, both conditions of standing are met. First, § 1 is intended to forbid price-fixing conspiracies that are designed to drive competitors out of the market. See Klor’s Inc. v. Broadway-Hale Stores, Inc., 359 U. S. 207, 213 (1959) (illegal coordination “is not to be tolerated merely because the victim is just one merchant whose business is so small that his destruction makes little difference to the economy”). USA alleges that ARCO’s pricing scheme aims at forcing independent refiners and marketers out of business and has created “an immediate and growing probability that the independent segment of the industry will be destroyed altogether.”7
In Brunswick, we recognized that requiring a competitor to show that its loss is “of the type” antitrust laws were intended to prevent
“does not necessarily mean . . . that §4 plaintiffs must prove an actual lessening of competition in order to recover. The short-term effect of certain anticompetitive behavior — predatory below-cost pricing, for example-may be to stimulate price competition. But competitors may be able to prove antitrust injury before they actu*351ally are driven from the market and competition is thereby lessened.” 429 U. S., at 489, n. 14.
The pricing behavior in the Court’s hypothetical example may cause actionable injury because it is “predatory.” This is so because the Court assumes that a predatory price is illegal. The direct relationship between the illegality and the harm is what makes the competitor’s short-term loss “antitrust injury.” The fact that the illegality in the case before us today stems from the illegal conspiracy, rather than the predatory character of the price, does not change the analysis of “that which makes defendants’ acts unlawful.”8 Thus, notwithstanding any temporary benefit to consumers, the unlawful pricing practice that is harmful in the long run to competition causes “antitrust injury” for which a competitor may seek damages.9
*352Second, USA is directly and immediately harmed by this price-fixing scheme, that is to say, by “that which makes defendants’ acts unlawful.” Id., at 489. In Brunswick, the allegedly illegal conduct at issue — the merger — itself did not harm the plaintiffs; similarly, in Cargill, Inc. v. Monfort of Colorado, Inc., 479 U. S. 104 (1986), the alleged injury arose not from the illegality of the proposed merger, but merely from possible postmerger behavior. Although the link between the illegal mergers and the alleged harms was insufficient to prove antitrust injury in either Brunswick or Cargill, both of those cases recognize that illegal pricing practices may cause competitors “antitrust injury.”10
The Court accepts that, as alleged, the vertical price-fixing scheme by ARCO is per se illegal under § 1. Nevertheless, it denies USA standing to challenge the arrangement because it is neither a consumer nor a dealer in the vertical arrangement, but only a competitor of ARCO: The “antitrust laws were enacted for ‘the protection of competition, not competitors.’” Ante, at 338 (quoting Brown Shoe Co. v. United States, 370 U. S. 294, 320 (1962)). This proposition — which is often used as a test of whether a violation of law occurred — cannot be read to deny all remedial actions by com*353petitors. When competitors are injured by illicit agreements among their rivals rather than by the free play of market forces, the antitrust laws protect competitors precisely for the purpose of protecting competition. The Court nevertheless interprets the proposition as categorically excluding actions by a competitor who suffers when others charge “nonpredatory prices pursuant to a vertical, maximum-price-fixing scheme.” Ante, at 331. In the context of a § 1 violation, however, the distinctions both of the price level and of the vertical nature of the conspiracy are unfounded. Each of these two analytical errors merits discussion.
Ill
The Court limits its holding to cases in which the noncompetitive price is not “predatory,” ante, at 331, 333, n. 3, 335, 339, 340, essentially assuming that any nonpredatory price set by an illegal conspiracy is lawful, see n. 1, supra. This is quite wrong. Unlike the prohibitions against monopolizing or underselling in violation of § 2 or § 13a, the gravamen of the price-fixing conspiracy condemned by § 1 is unrelated to the level of the administered price at any particular point in time. A price fixed by a single seller acting independently may be unlawful because it is predatory, but the reasonableness of the price set by an illegal conspiracy is wholly irrelevant to whether the conspirators’ work product is illegal.
If any proposition is firmly settled in the law of antitrust, it is the rule that the reasonableness of the particular price agreed upon by defendants does not constitute a defense to a price-fixing charge.11 In United States v. Trenton Potteries *354Co., 273 U. S. 392 (1927), the Court explained that “[t]he reasonable price fixed today may through economic and business changes become the unreasonable price of tomorrow,” id., at 397, and cautioned that
“in the absence of express legislation requiring it, we should hesitate to adopt a construction making the difference between legal and illegal conduct in the field of business relations depend upon so uncertain a test as whether prices are reasonable — a determination which can be satisfactorily made only after a complete survey of our economic organization and a choice between rival philosophies.” Id., at 398.
See also United States v. Masonite Corp., 316 U. S. 265, 281-282 (1942). This reasoning applies with equal force to a rule that provides conspirators with a defense if their agreed upon prices are nonpredatory, but no defense if their prices fall below the elusive line that defines predatory pricing.12 By assuming that the level of a price is relevant to the inquiry in a § 1 conspiracy case, the Court sets sail on the “sea of doubt” that Judge Taft condemned in his classic opinion in the Addyston Pipe & Steel case:
“It is true that there are some cases in which the courts, mistaking, as we conceive, the proper limits of the relaxation of the rules for determining the unreasonableness of restraints of trade, have set sail on a sea of *355doubt, and have assumed the power to say, in respect to contracts which have no other purpose and no other consideration on either side than the mutual restraint of the parties, how much restraint of competition is in the public interest, and how much is not.” United States v. Addyston Pipe & Steel Co., 85 F. 271, 283-284 (CA6 1898).
IV
The Court is also careful to limit its holding to cases involving “vertical” price-fixing agreements. In a thinly veiled circumscription of the substantive reach of § 1, the Court simply interprets “antitrust injury” under § 4 so that it excludes challenges by any competitor alleging a vertical conspiracy: “[A] vertical price-fixing scheme may facilitate predatory pricing . . . [b]ut because a firm always is able to challenge directly a rival’s pricing as predatory, there is no reason to dispense with the antitrust injury requirement in an action by a competitor against a vertical agreement.” Ante, at 339, n. 9.13 This focus on the vertical character of the agreement is misleading because it incorrectly assumes that there is a sharp distinction between vertical and horizontal arrangements, and because it assumes that all vertical arrangements affect competition in the same way.
The characterization of ARCO’s price-fixing arrangement as “vertical” does not limit its potential consequences to a neat category of injuries. A horizontal conspiracy among ARCO retailers administered by, for example, trade association executives instead of executives of their common supplier would generate exactly the same anticompetitive consequences. ARCO and its retail dealers all share an interest in excluding independents like USA from the market. The fact *356that each member of a group of price fixers may have made a separate, individual agreement with their common agent does not destroy the horizontal character of the agreement. We so held in the Masonite case:
“[T]here can be no doubt that this is a price-fixing combination which is illegal per se under the Sherman Act. United States v. Trenton Potteries Co., 273 U. S. 392 [(1927)]; Ethyl Gasoline Corp. v. United States, 309 U. S. 436 [(1940)]; United States v. Socony-Vacuum Oil Co., 310 U. S. 150 [(1940)]. That is true though the District Court found that, in negotiating and entering into the first agreements, each appellee, other than Masonite, acted independently of the others, negotiated only with Masonite, desired the agreement regardless of the action that might be taken by any of the others, did not require as a condition of its acceptance that Masonite make such an agreement with any of the others, and had no discussions with any of the others. . . . Prices are fixed when they are agreed upon. United States v. Socony-Vacuum Oil Co., supra, p. 222. The fixing of prices by one member of a group, pursuant to express delegation, acquiescence, or understanding, is just as illegal as the fixing of prices by direct, joint action. Id.”14
Differences between vertical and horizontal agreements may support an argument that the former are more reasonable, and therefore more likely to be upheld as lawful, than the latter. But such differences provide no support for the Court’s contradictory reasoning that the direct and intended consequences of one form of conspiracy do not constitute “antitrust injury,” while precisely the same consequences of the other form do.
*357Finally, the Court’s treatment of vertical maximum-price-fixing arrangements necessarily assumes that all such conspiracies have the same competitive consequences. Ante, at 337, 339-340, 345. The Court is again quite wrong.15 For example, a price agreement that is ancillary to an exclusive distributorship might protect consumers from an attempt by the distributor to exploit its limited monopoly. However, a conclusion that such an agreement would not cause any antitrust injury lends no support to the Court’s holding that an illegal price arrangement designed to drive a competitor out of business is immune from challenge by its intended victim.16
*358V
In a conspiracy case we should always ask ourselves why the defendants have elected to act in concert rather than independently.17 Although in certain situations collective action may actually foster competition, see, e. g., National Collegiate Athletic Assn. v. Board of Regents of University of Oklahoma, 468 U. S. 85 (1984), we normally presume that the free market functions most effectively when individual entrepreneurs act independently. This is true with respect to both maximum and minimum pricing arrangements.
Professor Sullivan recognized that producers fixing maximum prices “are not acting from undiluted altruism,” but *359from self-interested goals such as prevention of new entries into the market. L. Sullivan, Law of Antitrust 211 (1977). He described the broad policy reasons to prohibit collusive pricing:
“The policy which insists on individual decisions about price thus has at its source more than a preference for the independence of the small businessman (though that is surely there) and more than a preference for the lower prices which such a policy will usually yield to consumers (though that too is strongly present). Also at work is the theoretical conviction that the most general function of the competitive process, the allocation and reallocation of resources in a rational yet automatic manner, can be carried out only if independence by each trader is scrupulously required. Created out of the confluence of these parallel strivings, the policy has a breadth which makes it as forbidding to maximum price arrangements as to the more common ones which forestall price decreases.” Id., at 212.
In carving out this exception to the enforcement of § 1, the Court has chosen to second-guess the wisdom of our per se rules and to embark on the questionable enterprise of parsing illegal conspiracies. This approach fails to heed the prudence urged in United States v. Topco Associates, Inc., 405 U. S. 596 (1972):
“The fact is that courts are of limited utility in examining difficult economic problems. Our inability to weigh, in any meaningful sense, destruction of competition in one sector of the economy against promotion of competition in another sector is one important reason we have formulated per se rules.
“In applying these rigid rules, the Court has consistently rejected the notion that naked restraints of trade are to be tolerated because they are well intended or because they are allegedly developed to increase compe*360tition. E. g., United States v. General Motors Corp., 384 U. S. 127, 146-147 (1966); United States v. Masonite Corp., 316 U. S. 265 (1942); Fashion Originators’ Guild v. FTC, 312 U. S. 457 (1941).” Id., at 609-610.
The Court, in its haste to excuse illegal behavior in the name of efficiency,18 has cast aside a century of understanding that our antitrust laws are designed to safeguard more than efficiency and consumer welfare,19 and that private actions not only compensate the injured, but also deter wrongdoers.20 •
*361As we explained in United States v. American Tobacco Co., 221 U. S. 106, 183 (1911): “[I]t was the danger which it was deemed would arise to individual liberty and. the public well-being from acts like those which this record exhibits, which led the legislative mind to conceive and to enact the Anti-trust Act.” The conspiracy alleged in this complaint poses the kind of threat to individual liberty and the free market that the Sherman Act was enacted to prevent. In holding such a conspiracy immune from challenge by its intended victim, the Court is unfaithful to its history of respect for this “charter of freedom.”21
I respectfully dissent.

 For example, the Court reasons:
“Low prices benefit consumers regardless of how those prices are set, and so long as they are above predatory levels, they do not threaten competition. Hence, they cannot give rise to antitrust injury.” Ante, at 340.
“When prices are not predatory, any losses flowing from them cannot be said to stem from an anticompetitive aspect of the defendant’s conduct.” Ante, at 340-341.

 “31. Arco and its co-conspirators have engaged in limit pricing practices in which prices are deliberately set on gasoline at a level below their competitors’ cost with the purpose and effect of making it impossible for plaintiff and other independents to compete. For example, Arco and its co-conspirators have sold gasoline, ex tax, at the retail pump for less than independents, such as plaintiff, can purchase gasoline at wholesale.” Amended Complaint, App. 18.

 “27. Arco and its co-conspirators have organized a resale price maintenance scheme, as a direct result of which competition that would otherwise exist among Arco-branded dealers has been eliminated by agreement, and the retail price of Arco-branded gasoline has been fixed, stabilized and maintained at artificially low and uncompetitive levels. ...” Amended Complaint, App. 17.

 It may be that ARCO could have accomplished its objectives independently, merely by reducing its own prices sufficiently to induce its retail cus*348tomers to charge abnormally low prices and divert business from USA stations. See, e. g., Amended Complaint ¶ 30, App. 18. Such independent action by ARCO, followed by independent action by its retail customers, of course would be lawful, even if it produced the same consequences as the alleged conspiratorial program. See United States v. Parke, Davis & Co., 362 U. S. 29, 44 (1960). Indeed, a full trial might establish that that is what happened. Nevertheless, as the case comes to us, we assume that ARCO is the architect of an illegal conspiracy.

 “18. For the last few years, there has been, and still is, a steady and continuous reduction in the competitive effectiveness of independent refiners and marketers selling in California and the western United States. During this time period, more than a dozen large independents have sold out, liquidated or drastically curtailed their operations, and many independent retail stations have been closed. The barriers to entry into this market have been high, and today such barriers are effectively insurmountable; once an independent is eliminated, it is highly unlikely that it will be replaced.” Amended Complaint, App. 15.

 We have long held under the Sherman Act that “a combination for the purpose and with the effect of raising, depressing, fixing, pegging, or stabilizing the price of a commodity in interstate or foreign commerce is illegal per se.” United States v. Socony-Vacuum Oil Co., 310 U. S. 150, 222-223 (1940). See also Kiefer-Stewart Co. v. Joseph E. Seagram & Sons, Inc., 340 U. S. 211, 213 (1951) (maximum resale prices); Monsanto Co. v. Spray-Rite Service Corp., 465 U. S. 752, 761 (1984) (vertical resale prices); Albrecht v. Herald Co., 390 U. S. 145 (1968) (vertical maximum resale prices).

 USA’s Amended Complaint specifically alleges:
“39. As a direct and proximate result of the above-described combinations and conspiracy and of the acts taken in furtherance thereof:
“(a) the price of gasoline has been artificially fixed, maintained and stabilized;
“(b) independent refiners and marketers have suffered substantial losses of sales and profits and their ability to compete has been seriously impaired;
“(c) independent refiners and marketers have gone out of business or been taken over by Arco;
“(d) there is an immediate and growing probability that the independent segment of the industry will be destroyed altogether and that control of the discount market will be acquired by Arco.” App. 20.

 Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U. S. 477, 489 (1977). The analysis in Cargill, Inc. v. Monfort of Colorado, Inc., 479 U. S. 104 (1986), also supports this conclusion. There, the respondent alleged “antitrust injury” on alternative theories: first, that after the challenged merger petitioners’ company would be able to lower its prices because it would be more efficient; and second, that it might attempt to drive respondent out of business by engaging in sustained predatory pricing. We rejected the first theory because independent decisions to reduce prices based on efficiencies are legal and precisely what the antitrust laws are intended to encourage. Id., at 116-117. We rejected the second theory because respondent “neither raised nor proved any claim of predatory pricing before the District Court.” Id., at 119. However, in discussing the second theory, we recognized that predatory pricing “is a practice that harms both competitors and competition,” and because it aims at “the elimination of competition. ... is thus a practice ‘inimical to the purposes of [the antitrust] laws,’ Brunswick, 429 U. S., at 488, and one capable of inflicting antitrust injury.” Id., at 117-118 (footnote omitted). Again, a competitor suffers the same “antitrust injury” from an illegal conspiracy setting prices designed to eliminate it as it would suffer from a single firm setting predatory prices.

 See also Blair & Harrison, Rethinking Antitrust Injury, 42 Vand. L. Rev. 1539, 1561-1565 (1989) (unsuccessful predatory efforts cause “antitrust injury” even though consumers have not suffered).

 I agree that not every loss that is causally related to an antitrust violation is “antitrust injury,” ante, at 339, n. 8, but a scheme that prices the services of conspirators below those of competitors may cause injury for which the competitor may recover damages under § 4. In Blue Shield of Virginia v. McCready, 457 U. S. 465 (1982), the presumed injury to competitors was strong enough to support even an indirect action by a patient of the competitor. Petitioners, a medical insurance company and an organization of psychiatrists, conspired in violation of § 1 to compensate patients for the services of psychiatrists, but not those of psychologists. We recognized that if patients had chosen to go to psychiatrists, the “antitrust injury would have been borne in the first instance by the [psychologist] competitors of the conspirators.” Id., at 483. Instead, patient MeCready went to a psychologist at her own expense. We held that “[although MeCready was not a competitor of the conspirators, the injury she suffered was inextricably intertwined with the injury the conspirators sought to inflict on the psychologists and the psychotherapy market. ” Id., at 483-484.

 See United States v. Trenton Potteries Co., 273 U. S. 392, 398 (1927); see also United States v. Trans-Missouri Freight Assn., 166 U. S. 290 (1897); United States v. Addyston Pipe & Steel Co., 85 F. 271, 291 (CA6 1898) (“[T]he association of the defendants, however reasonable the prices they fixed, however great the competition they had to encounter, and however great the necessity for curbing themselves by joint agreement from *354committing financial suicide by ill-advised competition, was void at common law, because in restraint of trade, and tending to a monopoly”).

 Like the determination of a “reasonable” price, determination of what is a “predatory price” is far from certain. The Court declines to define predatory pricing for the purpose of the § 4 inquiry it creates today, ante, at 341, n. 10. Predatory pricing by a conspiracy, rather than a single actor, may result from more than pricing below an appropriate measure of cost. See Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U. S. 574, 585, n. 8 (1986). See also A. A. Poultry Farms, Inc. v. Rose Acre Farms, Inc., 881 F. 2d 1396, 1400 (CA7 1989) (describing the many considerations in a single firm ease that make it difficult to infer predatory conduct from the relation of price to cost).

 Thus, a victim of a vertical maximum-price-fixing conspiracy that is successfully driving it from the market cannot bring an action under § 1 as long as the conspirators take care to fix their prices at “nonpredatory” levels.

 United States v. Masonite Corp., 316 U. S. 265, 274-276 (1942). See also ante, at 336, n. 6 (suggesting a horizontal component of the maximum-price-fixing arrangement in Kiefer-Stewart); Business Electronics Corp. v. Sharp Electronics Corp., 485 U. S. 717, 744-748 (1988) (Stevens, J., dissenting).

 Indeed, the-Court elsewhere acknowledges that "'[mjaximum and minimum price fixing may have different consequences in many situations.’ ” Ante, at 343, n. 13 (quoting Albrecht, 390 U. S., at 152). This is quite true. See, e. g., Arizona v. Maricopa County Medical Society, 457 U. S. 332, 348 (1982) (the per se rule against maximum prices guards against the elimination of competition, discouraging entry into the market, deterring experimentation, and allowing hidden price setting); Continental T. V., Inc. v. GTE Sylvania Inc., 433 U. S. 36, 51, n. 18 (1977) (vertical price fixing reduces interbrand and intrabrand competition and may facilitate cartelizing). In Sylvania, the Court also recognized that “Congress recently has expressed its approval of a per se analysis of vertical price restrictions by repealing those provisions of the Miller-Tydings and McGuire Acts allowing fair-trade pricing at the option of the individual States.” Ibid. See also White Motor Co. v. United States, 372 U. S. 253, 268 (1963) (Brennan, J., concurring) (“Resale price maintenence is not only designed to, but almost invariably does in fact, reduce price competition not only among sellers of the affected product, but quite as much between that product and competing brands”).

 The Court grudgingly “assume[s], arguendo, that Albrecht correctly held that vertical, maximum price fixing is subject to the per se rule,” ante, at 335, n. 5, but seeks to limit that holding to “potential effects on dealers and consumers, not. . . competitors,” ante, at 336. However, in its zeal to narrow antitrust injury, the Court assumes that all vertical maximumpriee-fixing arrangements mimic the circumstances present or discussed in Albrecht, in which there was monopoly power at both the production and exclusive distributorship stages. This approach is incorrect. For example, in Albrecht itself the Court identified possible injury to consumers as one basis for its per se rule, even though there was no evidence of actual consumer injury in that case. 390 U. S., at 152-153. Furthermore, the *358Albrecht Court did not treat Albrecht himself as a “dealer” in the conspiracy, but essentially as a “competitor” targeted by the price-fixing conspiracy between Herald Company and the new dealers that were hired “to force petitioner to conform to the advertised retail price” by selling newspapers in his territory at lower, fixed prices. Id., at 149-150, and n. 6. Although Albrecht was a potential Herald dealer — and thus not strictly a “dealer” or a “competitor” in the Court’s use of those terms — what is critical is that he had standing to bring a § 1 action as the victim of a vertical conspiracy to underprice his sales. Finally, the Court contradicts its own contrived model when it admits that vertical maximum-price-fixing schemes may facilitate predatory pricing for which a competitor could suffer “antitrust injury” in violation of § 2. Ante, at 339, n. 9.

 Until today, the Court has clearly understood why § 1 fundamentally differs from other antitrust violations:
“The reason Congress treated concerted behavior more strictly than unilateral behavior is readily appreciated. Concerted activity inherently is fraught with anticompetitive risk. It deprives the marketplace of the independent centers of decisionmaking that competition assumes and demands. 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. Of course, such mergings of resources may well lead to efficiencies that benefit consumers, but their anticompetitive potential is sufficient to warrant scrutiny even in the absence of incipient monopoly.” Copperweld Corp. v. Independence Tube Corp., 467 U. S. 752, 768-769 (1984).

 See, e. g., ante, at 337-338, n. 7 (“Rivals cannot be excluded in the long run by a nonpredatory maximum-price scheme unless they are relatively inefficient”); ante, at 344 (“[I]nsofar as the per se rule permits the prohibition of efficient practices in the name of simplicity, the need for the antitrust injury requirement is underscored”). Firms may properly go out of business because they are inefficient; market inefficiencies may also create imperfections leading to some firms’ demise. The Court sanctions a new force — the super-efficiency of an illegally combined group of firms who target their resources to drive an otherwise competitive firm out of business. Cf. Note, Below-Cost Sales and the Buying of Market Share, 42 Stan. L. Rev. 695, 741 (1990) (discussing long-term displacement of “otherwise efficient producers” by pricing to buy out a market share in a geographic area).

 Chief Justice Hughes regarded the Sherman Act as a “charter of freedom,” Appalachian Coals, Inc. v. United States, 288 U. S. 344, 359 (1933). Judge Learned Hand recognized Congress’ desire to strengthen small business concerns and to “put an end to great aggregations of capital because of the helplessness of the individual before them,” United States v. Aluminum Co. of America, 148 F. 2d 416, 428-429 (CA2 1945), and we recently reaffirmed that the Sherman Act is “the Magna Carta of free enterprise,” United States v. Topco Associates, Inc., 405 U. S. 596, 610 (1972). See also, e. g., Handler, Is Antitrust’s Centennial a Time for Obsequies or for Renewed Faith in its National Policy? 10 Cardozo L. Rev. 1933 (1989); Hovenkamp, Distributive Justice and the Antitrust Laws, 51 Geo. Wash. L. Rev. 1 (1982); Flynn & Ponsoldt, Legal Reasoning and the Jurisprudence of Vertical Restraints: The Limitations of Neoclassical Economic Analysis in the Resolution of Antitrust Disputes, 62 N. Y. U. L. Rev. 1125, 1137-1141 (1987) (discussing the political, social, and moral — as well as economic — goals motivating Congress in enacting antitrust legislation).

 See, e. g., Simpson v. Union Oil Co. of California, 377 U. S. 13 (1964); see also Polden, Antitrust Standing and the Rule Against Resale Price *361Maintenance, 37 Clev. St. L. Rev. 179, 208-209, 220-221 (1989) (§4 furthers congressional objectives of deterrence and compensation by allowing private suits by injured competitors); Blair & Harrison, 42 Vand. L. Rev., at 1564-1565 (treating losses of firms that are targeted by unsuccessful predatory efforts as “antitrust injury” furthers private enforcement of antitrust laws and avoids “suboptimal levels of deterrence”).
The Court of Appeals below observed that barring competitor standing leaves enforcement of the “vast majority of unlawful maximum resale price agreements” in the hands of “an unenthusiastic Department of Justice and, under certain circumstances, the dealers who are parties to the resale price maintenance agreement.” 859 F. 2d 687, 694, n. 5 (CA9 1988).

 Appalachian Coals, Inc., 288 U. S., at 359.