Molly Donovan: Before you get into the latest developments in cartels and abuse of dominance, could you give us a quick overview of what vertical restrictions are? Susannah Torpey: Sure. Overall, antitrust legislation includes two types of agreements, agreements or other anti-competitive measures that could restrict trade. These are vertical and horizontal restraints. A vertical restriction is an agreement reached at different levels of production, distribution or delivery. For example, if you have an anti-competitive agreement between a producer and a distributor, that would be a vertical restriction. This is different from a horizontal restriction, which is an agreement between competitors at the same stage of production, distribution or supply. For example, one producer entered into an anti-competitive agreement with another producer. The imposed pricing system has long been considered illegal in itself and not as a justification under federal cartel law. However, in Leegin, the U.S. Supreme Court itself repealed the rule against minimum support agreements and decided that these restrictions are subject to an analysis of the reason rule. The Tribunal stated that agreements should only fall into the „illegal” category if they always or almost always harm competition; z.B. horizontal pricing between competitors. On the other hand, the minimum sustainability of resale prices can often have competitive advantages that predominate over their anti-competitive harm.
The court stated that resale price maintenance agreements are not in themselves legal and suggested that such agreements could be contrary to federal cartel legislation if a producer or retailer participating in such an agreement had market power (see question 16). Yes, in the modern application and jurisprudence of the federal state, the sole purpose of antitrust legislation is to maximize the well-being of consumers. The issue of „platform dominance” is an emerging and unresolved issue in U.S. law regarding cartels and abuse of dominance. The question of how to reconcile the effectiveness and benefits of platforms with the power of their creators over their competitors within the platform is a subject that evolves in antitrust jurisprudence.
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