Vice President Shannon Seitz Coauthors CPI Antitrust Chronicle Article on Vertical Contracting Practices

August 01, 2013

The decisions in several recent antitrust cases involving exclusive dealing -- in particular, the ruling in ZF Meritor v. Eaton -- illustrate the piecemeal fashion in which the courts have dealt with vertical agreements up to this point, says Analysis Group Vice President Shannon Seitz in her coauthored article for CPI Antitrust Chronicle, "Vertical Practices and the Exclusion of Rivals Post Eaton" (July 2013).

Decisions such as that in Eaton, in theory, may move triers of fact away from broadly applying the price-cost test, and, in practice, may discourage suppliers from offering non-predatory loyalty or market share discounts, the authors write. There may be no safe harbor, "particularly when such discounts are part of a multidimensional vertical agreement," they say.

In the article, the authors explore the underlying economics of vertical agreements from the perspectives of upstream suppliers, downstream retailers, and their rivals in the marketplace. Additionally, the authors provide a series of screens through which to assess the pro- and anticompetitive effects of vertical agreements, including an analysis of changes in market power and access, and changes in profits generated and shared.

Read the article