Busted Squeeze Play: U.S. Supreme Court Rules That "Price Squeeze" Claims Under Section 2 of the Sherman Act Are Not Viable in the Absence of a Duty to Deal or Predatory Pricing


For purposes of the antitrust laws, a “price squeeze” occurs when a vertically integrated firm with market power at the wholesale level attempts to “squeeze” the profits of its competitors at the retail level. The firm does so by simultaneously raising the price of its goods to its wholesale customers and lowering the price at which it sells the same goods at the retail level. The firm’s competitors at the retail level are thereby forced to pay more for the goods at issue and cut their retail prices for those goods. In Pacific Bell Telephone Co. v. linkLine Communications, Inc., 550 U.S. ___, No. 07-512 (Feb. 25, 2009), the United States Supreme Court addressed the viability of price squeeze claims made under Section 2 of the Sherman Act.

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