The Antitrust Review of the Americas 2014

US: Vertical Restraints

27 August 2013

The overall outlines of vertical restraint law are settled. Within a few years of the Supreme Court’s 1977 decision in GTE Sylvania,1standards for evaluation of territorial restraints and dealer terminations were definitively formulated, and, except for price restraints, all vertical restraints were subject to the rule of reason. The Court approved rule of reason treatment for maximum resale price maintenance in State Oil Co2 in 1997 and for minimum resale price maintenance in 2007 in Leegin.3 Applying a market power screen similar in most respects to the European Commission’s Block Exemption Regulation for vertical restraints,4 the federal courts make no inquiry into the competitive effects of a restraint unless a manufacturer has economic power in a relevant market, either at the manufacturing level or downstream at the distributor or dealer level.

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