Nitro Distributing v. Alticor , 565 F.3d 417

Was Amway's involvement in the breakup of a business support materials company a horizontal restraint of trade?


The Court held that Amway’s actions did not involve a horizontal restraint of trade in violation of the anti-trust statutes. Nitro operated a "tool" business, selling support and motivational materials to Amway distributors. Several members of the company sought to break away from Nitro and form a competing business. They asked for and received guidance from Amway about the process of breaking away. After the separation, Nitro's business failed and they sued Amway alleging an anti-trust conspiracy and horizontal restraints of trade. The Circuit Court held that these claims were properly dismissed. A horizontal restraint of trade is collusion by competitors at the same level of business. Amway, despite having it's own tools business, was not at the same level as Nitro and its spin off, therefore it could not horizontally restrain trade. The court found that the tools produced by Amway were different from those produced by Nitro, and the two companies were not materially in competition with each other. Further, Amway's actions could not support a claim of conspiracy because their involvement in the spin-off was limited to protecting its products business not the tools business allegedly in competition with Nitro.

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Reference Info:Federal, 8th Circuit, Missouri | United States

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