The opinion is available here. Yet another super-majority Roberts Court antitrust decision applying consensus economic theory. No more price squeeze claims. Alcoa is not overturned. The Court declares that the price-squeeze claim in the absence of a duty to deal can be handled jointly by a straightforward application of Trinko and Brooke Group to the wholesale and retail prices at issue, respectively. There is also an extended discussion of the common pitfalls of the application of antitrust as price regulation.
A few key excerpts for now:
“A straightforward application of our recent decision in Trinko forecloses any challenge to AT&T’s wholesale prices.”
“The nub of the complaint in both Trinko and this case is identical—the plaintiffs alleged that the defendants (upstream monopolists) abused their power in the wholesale market to prevent rival firms from competing effectively in the retail market. Trinko holds that such claims are not cognizable under the Sherman Act in the absence of an antitrust duty to deal”
“Plaintiffs’ price-squeeze claim, looking to the relation between retail and wholesale prices, is thus nothing more than an amalgamation of a meritless claim at the retaillevel and a meritless claim at the wholesale level. If there is no duty to deal at the wholesale level and no predatory pricing at the retail level, then a firm is certainly not required to price both of these services in a manner that preserves its rivals’ profit margins.3”
“It is difficult enough for courts to identify and remedy an alleged anticompetitive practice at one level, such aspredatory pricing in retail markets or a violation of the duty-to-deal doctrine at the wholesale level. See Brooke Group, supra, at 225 (predation claims “requir[e] an understanding of the extent and duration of the alleged predation, the relative financial strength of the predator and its intended victim, and their respective incentives and will”); Trinko, supra, at 408. Recognizing price squeeze claims would require courts simultaneously topolice both the wholesale and retail prices to ensure thatrival firms are not being squeezed. And courts would be aiming at a moving target, since it is the interaction between these two prices that may result in a squeeze”
And the wrap up in the last paragraph:
“Trinko holds that a defendant with no antitrust duty todeal with its rivals has no duty to deal under the terms and conditions preferred by those rivals. 540 U. S., at 409–410. Brooke Group holds that low prices are only actionable under the Sherman Act when the prices arebelow cost and there is a dangerous probability that thepredator will be able to recoup the profits it loses from the low prices. 509 U. S., at 222–224. In this case, plaintiffs have not stated a duty-to-deal claim under Trinko and have not stated a predatory pricing claim under Brooke Group. They have nonetheless tried to join a wholesale claim that cannot succeed with a retail claim that cannot succeed, and alchemize them into a new form of antitrust liability never before recognized by this Court. We decline the invitation to recognize such claims. Two wrong claims do not make one that is right.
The judgment of the Court of Appeals is reversed, andthe case is remanded for further proceedings consistent with this opinion.”