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Article: The Supreme Court Puts The Squeeze On "Price Squeeze" Claims.
- Article from:
- Mondaq Business Briefing
- Article date:
- February 27, 2009
CopyrightCOPYRIGHT 2009 Mondaq Ltd. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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This morning, in Pacific Bell Telephone Co. v. linkLine Communications, Inc., Case No. 07-512,1 the Supreme Court wove together multiple strands of recent antitrust precedent, and announced a clear rule relating to "price squeeze" claims. A price squeeze occurs when a vertically integrated firm that possesses monopoly power in a wholesale market simultaneously raises the wholesale price of inputs and cuts the retail price of its products, thus "squeezing" the profit margins of its retail rivals. In linkLine, the Court held that where a firm has no antitrust duty to deal with its rivals at the wholesale level and does not engage in predatory pricing at the retail level, ...