New Jersey Antitrust Violations

A federal antitrust complaint by BanxCorp in the U.S. District Court for the District of New Jersey was filed against nine media firms, including Dow Jones & Co., The New York Times, CNBC, CNN, MSNBC for unlawful per se horizontal market division, customer allocation, and price fixing agreements with competitors for bank rate websites throughout the United States. A federal judge, on February 7, 2011, dropped many of the major media companies as defendants, but Judge Susan D. Wigenton of the U.S. District Court for the District of New Jersey refused to grant a motion to dismiss for LendingTree LLC. BanxCorp, which owns a bank rate website, may proceed with its lawsuit against LendingTree LLC that alleges LendingTree engaged in a customer allocation and price-fixing agreement with its competitors.

Price fixing like maximum resale price agreements are generally an antitrust violation. Executives who engage in antitrust violations may be prosecuted personally. Company representatives who want to beat competitors by engaging in antitrust violations may end up looking for an experienced New Jersey attorney to find exceptions to general antitrust laws for assisting in a criminal defense.

Not all price fixing is per se illegal. In State Oil Co. v. Khan, 522 U.S. 3 (1997), the U.S. Supreme Court overruled its decision in Albrecht v. Herald Co., 390 U.S. 145 (1968), holding that the per se rule of illegality did not apply to maximum resale prices. A manufacturer’s establishment and enforcement of maximum resale prices is to be judged by the rule of reason. Under the rule of reason, it can be shown that the price ceiling is established for legitimate business purposes and is necessary to compete against other suppliers’ brands. Market power and intent are factors under the rule of reason. Maximum resale price restrictions are likely to be imposed where the distributors might be tempted to exploit market power to raise prices and decrease sales volumes than where the products require extensive pre-sale or post-sale servicing. To demonstrate that the price ceiling is pro-competition and will likely benefit customers, it is important to document the legitimate business justification and competitive necessity for the maximum resale pricing at the outset.

Though the Khan decision has lowered the liability standard under federal law, Guam and 33 state statutes continue to target maximum resale price restrictions. These states may include Alaska, Arizona, Arkansas, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Iowa, Kansas, Maryland, Michigan, Minnesota, Mississippi, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Virginia, Washington, West Virginia, Wisconsin, Wyoming.

When charged with a crime, engage an experienced New Jersey criminal defense attorney to make the prosecution aware that there are exceptions to general rules, and a defendant is presumed innocent unless and until proven guilty.