Read the summary and the most important questions on Ch 6: Per Se Offenses (SA 1: Conspiracies in Restraint of Trade)

• 1 Ch 6: Per Se Offenses (SA 1: Conspiracies in Restraint of Trade)

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• Two requirements for all per se arrangements.

  1. Must be horizontal, not vertical.
  2. Must be naked, not ancillary. 

• Example of a "Naked" Restraint

  If two retail stores agree that they will not sell the same products, and there is no more to the agreement than that, then the arrangement is a naked horizontal market allocation and is per se illegal. On the other hand, if it is only one clause in a contract between them to set up a jointly owned shopping mall, then the restraint is "ancillary" to that larger agreement and is judged differently.

• "Ancillary" Restraint (CF "Naked")

  If a restraint is merely one part of a larger agreement that serves some purpose other than restraining trade, then the restraint is said to be "ancillary."

• When can a restraint be considered "ancillary"?

  IN order for a restraint to be ancillary, it must be REASONABLY NECESSARY as part of a larger, pro-competitive arrangement. Ancillary restraints receive more favorable treatment under AT law than naked restraints. See Doctrine of Ancillary Restraints.

• Criminal Enforcement and Per Se Restraints

  Note that per se illegal conduct is the only conduct that the DoJ prosecutes criminally.

• Second Vacuum (US 1940): 4 Key points on per se restraints

  1. No showing of MP or even ability to cause harm is required. 
  2. No showing of intent required. 
  3. No overt act toward carrying out the conspiracy is required; the agreement itself establishes the offense
  4. The size of the conspiracy or the commerce involved is irrelevant--that is, there is no de minims exception to per se illegality. 

• Structure of a Per Se Cause of Action

  Plaintiff must merely prove that the challenged conduct occurred, and then the Ds are liable.

• Category 1: Horizontal Price-Fixing - Defined

  A naked, horizontal price-fixing conspiracy is an agreement between head-to-head competitors setting the price at which they will sell their good or service.

• Category 1: Horizontal Price-Fixing - Enforcement

  Naked, horizontal price-fixing has long been considered the most serious AT offense, is the most harshly punished, and is considered the paradigmatic trade restraint.

• Category 1: Horizontal Price-Fixing - General Rules

  Whenever an agreement relates to price or output, in one way or another, and is otherwise "naked," the courts will not give the defendants the benefit of much doubt