Antitrust enforcement dilemma

  • Section 1 of the Sherman Act forbids “contracts, combinations, or conspiracies in restraint of trade”
    • Evidence is required, which makes prosecution difficult
  • Tacit collusion is also termed conscious parallelism
    • The Supreme Court explicitly states that conscious parallelism is “not in itself illegal”

“Oligopolies have always posed problems for conventional antitrust law: without something that can be called an agreement, they elude scrutiny under section 1 of the Sherman Act, and yet no individual firm has enough market power to be subject to Sherman Act section 2. Tacit collusion is easy in those markets, and firms have little incentive to compete on the basis of price, preferring to share the profits rather than to fight with each other. This appeal concerns the fine line between agreement and tacit collusion, or, put another way, conscious parallelism” Kleen Products LLC v. Georgia Pacific LLC (2018)