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could Sherman atitrust laws be as applicable if the customer/business

relationship happen to be reverse...
could Sherman atitrust laws be as applicable if the customer/business relationship happen to be reverse? ie if the business bought from the customer.
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Answered in 2 hours by:
1/2/2013
Irwin Law
Irwin Law, Attorney
Category: Business Law
Satisfied Customers: 7,480
Experience: 30+ yrs. representing small business, real estate, probate
Verified
Thanks for contacting Pearl.com/Just Answer. Your question concerning the Sherman Anti Trust Act is extremely general. It would require hours of research and writing and would probably not cover what you want to know. Therefore, please provide specific details of the situation that you are inquiring about and we will be better able to assist you.
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Customer reply replied 5 years ago

bare with me my spelling and grammer are poor. But I have a metals recycling yard. We buy and seperate scrap metal from the public then sell the material on down the line for further processing. The one of the companies that well sell to began construction on a yard in very close proximity to ours several years ago (they do the low scale like us and a mill ready version). We were informed by this company that if we sold our ferrous products exclusivly to them that they would halt construction. Being a small company we didnt have alot of options so we complied and they halted construction. As time went on (over the course of 3 years) the prices they were paying us vs what we could get elsewhere got smaller and smaller.It got to the point that we simply just couldnt be exclusive to their strongarm bargain so we sold to other companies. Now the big company is moving in (to business) on top of us again. I have heard from others that this company has used this tactic numerous times. Free enterprise is one thing, I believe this is something different.

Thanks for the additional information. This is somewhat outside of my area of practice so I will open up the question for other experts to assist you. Please do not Reply to this since it might delay a response.
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LawHelpNow
LawHelpNow, Attorney/Lawyer
Category: Business Law
Satisfied Customers: 7,639
Experience: Relax. Let's work together. Practical solutions.
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Hello,


My name isXXXXX'm a licensed attorney. Glad to try and help out.

Sorry for your circumstances, truly. My heart goes out to you.

You pose a very logical question and I can absolutely understand your concerns. Unfortunately, however, the Sherman Antitrust Act, ch. 647, 26 Stat. 209, 15 U.S.C. §§ 1–7, is not helpful to one in your shoes. Here's why. In the words of Senator John Sherman, here's the purpose of the law: "To protect the consumers by preventing arrangements designed, or which tend, to advance the cost of goods to the consumer" (emphasis added by me). In other words, it doesn't work "in reverse", so to speak.

I am sorry.

Now, having said all of that, there could potentially be a state law tort cause of action to explore. If you want to find out for certain, you should schedule a consultation with a local business litigation attorney. Here's an economical and trustworthy resource for doing so:

Alabama State Bar Lawyer Referral Service


If you have a follow-up question or need clarification, please just say the word by using "reply" to reach me.


I hope all works out for you.

Happy New Year!


Take care,

Ben, J.D.

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Customer reply replied 5 years ago

 


 



  • price discrimination between different purchasers if such a discrimination substantially lessens competition or tends to create a monopoly in any line of commerce (Act Section 2, codified at 15 U.S.C. § 13;

  • sales on the condition that (A) the buyer or lessee not deal with the competitors of the seller or lessor ("exclusive dealings") or (B) the buyer also purchase another different product ("tying") but only when these acts substantially lessen competition (Act Section 3, codified at 15 U.S.C. § 14);

  • mergers and acquisitions where the effect may substantially lessen competition (Act Section 7, codified at 15 U.S.C. § 18) or where the voting securities and assets threshold is met (Act Section 7a, codified at 15 U.S.C. § 18a);

  • any person from being a director of two or more competing corporations, if those corporations would violate the anti-trust criteria by merging (Act Section 8; codified at 15 U.S.C. § 19).


 


 


 


 


one of the companies that well sell to began construction on a yard in very close proximity to ours several years ago (they do the low scale like us and a mill ready version). We were informed by this company that if we sold our ferrous products exclusivly to them that they would halt construction. Being a small company we didnt have alot of options so we complied and they halted construction. As time went on (over the course of 3 years) the prices they were paying us vs what we could get elsewhere got smaller and smaller. (compared to fair market value)


 


Wouldnt there be something there as to the "tying" and "price discrimination" leading to a monopoly?


 


Elements


A Section 1 violation has three elements:[17]



  1. An agreement

  2. which unreasonably restrains competition

  3. and which affects interstate commerce.


A Section 2 violation has two elements:[18]


(1) the possession of monopoly power in the relevant market and
(2) the willful acquisition or maintenance of that power "as distinguished from" growth or development as a consequence of a superior product, business acumen, or historic accident.
"To protect the consumers by preventing arrangements designed, or which tend, to advance the cost of goods to the consumer" (emphasis added by me--you). In other words, it doesn't work "in reverse", so to speak.
If you really look at, the consumer/customers in the end are harmed. They are not spending several million dollars and taking on tons of extra liability, employees, equipment etc. just so thay can pay MORE for scrap metal that they were already recieving. A not so egzagerated example would be lets say you buy a car and you drive that car to the end of its usefull life and you decide to sell it to a recycling yard because thats the only option left. If you are forced to take less money because the market has been monopolized, your total cost of ownership for the life of that car is higher. Therefore you are harmed. I know thats sounds silly, but when you take into consideration the infinite scalability of that notion, the numbers grow exponentially..
Hello again,
Thanks for writing back.
Great to hear from you!
I apologize for the delay in getting back to you. I don't think you sound a bit silly, to use your word. Rather, I think you have a logical mind and a nice analytically way of thinking. I read everything you said and it makes much sense. Regrettably, my opinion remains unchanged on account of the manner in which the cases have interpreted the statutory language. In other words, we're stuck with the doctrine of stare decisis or judicial precedent. Frankly, I like your way of looking at things better than many of the holdings, but then again it's not my opinion but that of the Courts which are controlling here.

I do hope you see justice accomplished in the end result.
Thanks again!
Ben, J.D.
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