Unilateral facilitating practices

Unilateral facilitating practice: actions taken by a single firm without agreement with other parties that produces anticompetitive harm (basically one firm trying to initiate parallel conduct)

• The Sherman Act doesn't address these practices well:
  • Section 1 doesn't apply: there is no agreement
  • Section 2 rarely applies: requires exclusionary action, which isn't present in many cases
  • Section 5 of FTC Act rarely applies: courts have limited application of the unfair and deceptive acts and practices to claims where there is an agreement - even when it does apply, remedies are limited to enjoining parties from partaking in activity
• In general, these practices have been left alone by courts

Examples:

• Information disclosure (price, sales, or cost information)
• Price matching for customers and competitors

Caselaw:

U.S. v. American Airlines (1984)

• Holding: unilateral facilitating practice in violation of Section 2
  • This is a unilateral invitation to collude (no Section 1 violation since no agreement)
  • Section 2 violation: court finds that there was an intent to monopolize that had a dangerous probability of success
• Facts: president of defendant airline asks president of another airline to raise fares on DFW route in a recorded conversation, which is presented to the government
• Note: this Section 2 claim could not be brought in many situations, although it happened to be effective here