Difference between revisions of "Colgate doctrine"

Revision as of 13:16, March 13, 2007

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-Colgate doctrine is a conservative principle in antitrust law that allows a company to decide, on its own, with whom to do business.  Any company may unilaterally terminate business with any other company without triggering a violation of the antitrust laws.
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-The Colgate doctrine is essential to the rights of businesses in a free market economy.  This important doctrine was established by the U.S. Supreme Court decision in ''United States v. Colgate Co.'', 250 U.S. 300 (1919).
-The Model Jury Instruction on this issue is as follows (ABA 2005):
-A supplier may go beyond announcing its suggested resale prices.  It may announce that it will stop dealing with any distributors that do not follow its suggestions.  Announcing such a policy, and then terminating distributors that do not follow the suggested prices, does not by itself constitute a resale price-fixing agreement.  This is so because simply announcing and enforcing such a policy does not constitute an agreement between the supplier and anyone else.
-This is so even if distributors follow the suggested resale prices because they fear they will be terminated if they do not follow the suggestions. ...  To establish [unlawful] resale price-fixing in such a situation, the plaintiff must show that the distributor reached an agreement on price with the supplier, rather than merely followed the supplier's suggestion.