The US Court of Appeals for the 9th Circuit rules that bundled discounts will not support a claim under s. 2 of the Sherman Act unless the discounts are below an appropriate measure of costs (Cascade Health Solutions / PeaceHealth)

On September 4, 2007 the United States Court of Appeals for the Ninth Circuit issued its much-anticipated decision in Cascade Health Solutions (fka McKenzie- Williamette Hospital) v. PeaceHealth, et al., No. 05-35627, 2007 WL 2473229 (9th Cir. Sept. 4, 2007). The court held that bundled pricing will not satisfy the “predatory or anticompetitive conduct” prong of a violation of Section 2 of the Sherman Act unless the price discounts are below an appropriate measure of the defendant’s costs. The court adopted a “discount attribution standard,” under which the full amount of discounts provided for a bundle of products is allocated to the competitive product. The Ninth Circuit also held that the appropriate baseline for measuring cost in bundled discount cases is the defendant’s average

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  • Winston & Strawn (New York)
  • Haug Partners (New York)
  • Winston & Strawn (New York)
  • Robins Kaplan (New York)

Quotation

Jeffrey L. Kessler, John F. Collins, A. Paul Victor, Eamon O'Kelly, The US Court of Appeals for the 9th Circuit rules that bundled discounts will not support a claim under s. 2 of the Sherman Act unless the discounts are below an appropriate measure of costs (Cascade Health Solutions / PeaceHealth), 4 September 2007, e-Competitions September 2007, Art. N° 37368

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