Common use of Anticompetitive Effects Clause in Contracts

Anticompetitive Effects. In support of its claim of anticompetitive effects caused by ▇▇▇▇▇▇’s RPM, PSKS alleged a few points, which were all rejected by the Fifth Circuit in the end. One of them was the high prices of Brighton products caused by the RPM. The court pointed out the deficiency of the claim in light of basic laws of economics, stating that an artificial price hike by ▇▇▇▇▇▇ would merely cause it to lose sales to its competitors in the absence of market power. Another point related to a limitation of intrabrand competition among retailers. According to PSKS’s allegation, ▇▇▇▇▇▇’s RPM policy deprived consumers of“free and open competition in the purchase of Brighton-brand product.”Regarding the argument, the Fifth Circuit pointed out the importance of interbrand competition, which forced Brighton retailers to offer a combination of price and service to attract consumers away from other competing brands’products.220） The court also cited Leegin, which stated that robust intrabrand competition on service could exist even in the absence of price competition, and that retailers could seek to attract customers with better service, more knowledgeable staff, more appealing stores, and other non-price-oriented strategies.221） After holding that the Leegin’s termination of PSKS as a retailer should not be viewed as an anticompetitive effect in light of Colgate,222）the Fifth Circuit found that PSKS had never alleged any relevant factors, especially those suggested in Leegin, that would indicate a plausible anticompetitive effect. In Leegin, the Supreme Court held that a dominant retailer and a retailer cartel could force a manufacturer to adopt RPM that it would not otherwise, and cause anticompetitive effects in the relevant market, in addition to a scenario where a manufacturer with market power could bring restriction on interbrand competition.223）Moreover, the Supreme Court suggested anticompetitive concerns if many competing manufacturers adopted RPMs broadly in the relevant market. The Fifth Circuit on remand held, as noted above, that none of those anticompetitive concerns were alleged in PSKS complaints.224）