Bus. Elecs. Corp. v. Sharp Elecs. Corp. - 485 U.S. 717, 108 S. Ct. 1515 (1988)

Rule:

A vertical restraint is not illegal per se unless it includes some agreement on price or price levels.

Facts:

Petitioner brought suit against respondents, alleging that they conspired to terminate petitioner as a dealer of respondent company's products because he sold for a lower price than respondent dealer and such action was illegal per se under the Sherman Act, 15 U.S.C.S. § 1. A jury found that respondents conspired against petitioner and judgment was entered for petitioner. On appeal, the court reversed, holding the jury was improperly instructed as to vertical price fixing and remanded for a new trial. Certiorari was granted to resolve a conflict in the circuits regarding the per se illegal rule for vertical price restraints and the rule of reason for non-price restraints.

Issue:

Were vertical restraints per se illegal under the Sherman Act? 

Answer:

No.

Conclusion:

The court affirmed the appellate court and held, relying on the GTE Sylvania doctrine, that vertical restraints were not per se illegal unless they include some agreement on price or price levels and there was a presumption in reviewing vertical restraints in favor of a rule-or-reason standard.