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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The US Court of Appeals for the Ninth 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)
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