looking to the circumstances, details, and logic of a restraint.”[1] If the Agencies conclude that a restraint has no likely anticompetitive effects, they will treat it as reasonable, without an elaborate analysis of market power or the justifications for the restraint. Similarly, if a restraint facially appears to be of a kind that would always or almost always tend to reduce output or increase prices, and the restraint is not reasonably related to efficiencies, the Agencies will likely challenge the restraint without an elaborate analysis of particular industry circumstances.[2]
Example 6
Situation: Gamma, which manufactures Product X using its patented process, offers a license for its process technology to every other manufacturer of Product X, each of which competes worldwide with Gamma in the manufacture and sale of X. The process technology does not represent an economic improvement over the available existing technologies. Indeed, although most manufacturers accept licenses from Gamma, none of the licensees actually uses the licensed technology. The licenses provide that each manufacturer has an exclusive right to sell Product X manufactured using the licensed technology in a designated geographic area and that no manufacturer may sell Product X, however manufactured, outside the designated territory.
Discussion: The manufacturers of Product X are in a horizontal relationship in the goods market for Product X. Any manufacturers of Product X that control technologies that are substitutable at comparable cost for Gamma’s process are also horizontal competitors of Gamma in the relevant technology market. The licensees of Gamma’s process technology are formally in a vertical relationship with Gamma, although that is not significant in this example because they do not actually use Gamma’s technology.
The licensing arrangement restricts competition in the relevant goods market among manufacturers of Product X by requiring each manufacturer to limit its sales to an exclusive territory. Thus, competition among entities that would be actual competitors in the absence of the licensing arrangement is restricted. Based on the facts set forth above, the licensing
- ↑ Cal. Dental, 526 U.S. at 781.
- ↑ See FTC v. Ind. Fed’n of Dentists, 476 U.S. 447, 459-62 (1986); NCAA v. Bd. of Regents of the Univ. of Okla., 468 U.S. 85, 109-10 (1984); see also Cal. Dental, 526 U.S. at 779 (“Although we have said that a challenge to a ‘naked restraint on price and output’ need not be supported by ‘a detailed market analysis’ in order to ‘requir[e] some competitive justification,’ it does not follow that every case attacking a less obviously anticompetitive restraint … is a candidate for plenary market examination.” (alteration in original) (citation omitted) (quoting NCAA, 468 U.S. at 110)).
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