The US Court of Appeals for the 9th Circuit applies a cost-based test to attempted monopolization claim premised on multiproduct discounting (Cascade Health Solutions / PeaceHealth)

The Ninth Circuit evaluated the antitrust implications of multiproduct or “bundled” discounts in Cascade Health Solutions v. PeaceHealth, CV-02-06032 (Sept. 4, 2007). In doing so, the Ninth Circuit rejected the controversial Third Circuit rule of LePage’s Inc. v. 3M, 324 F.3d 141 (3d Cir. 2003), reasoning that LePage’s was inconsistent with the longstanding practice of protecting businesses that engage in legitimate price competition from unwarranted legal risk. Expressly “part[ing] ways with” its sister circuit, the Ninth Circuit held that bundled discounts violate Section 2 of the Sherman Act only when they are below an appropriate measure of the defendant’s costs. The PeaceHealth opinion authored by Judge Ronald M. Gould establishes a clear point of disagreement between the circuits as

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Authors

  • Skadden, Arps, Slate, Meagher & Flom (Washington DC)
  • Skadden, Arps, Slate, Meagher & Flom (New York)
  • Skadden, Arps, Slate, Meagher & Flom (New York)

Quotation

Gary A. MacDonald, Neal R. Stoll, Jessica Biggio, The US Court of Appeals for the 9th Circuit applies a cost-based test to attempted monopolization claim premised on multiproduct discounting (Cascade Health Solutions / PeaceHealth), 4 September 2007, e-Competitions Bulletin September 2007, Art. N° 45595

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