United States v. Colgate & Co. - 250 U.S. 300, 39 S. Ct. 465 (1919)

Rule:

In the absence of any purpose to create or maintain a monopoly, the Sherman Act does not restrict the long-recognized right of trader or manufacturer engaged in an entirely private business, freely to exercise his own independent discretion as to parties with whom he will deal. And, of course, he may announce in advance the circumstances under which he will refuse to sell. The trader or manufacturer carries on an entirely private business, and can sell to whom he pleases. A retail dealer has the unquestioned right to stop dealing with a wholesaler for reasons sufficient to himself, and may do so because he thinks such dealer is acting unfairly in trying to undermine his trade.

Facts:

Petitioner government's indictment against respondent Colgate & Company alleged that respondent engaged in an unlawful combination with wholesale and retail dealers for the purpose of fixing prices and thus restrained trade and commerce. The district court sustained respondent's objection to the indictment. Petitioner appealed.

Issue:

Did the district court err in sustaining respondent’s objection to the petitioner’s indictment?

Answer:

No.

Conclusion:

The United States Supreme Court affirmed the judgment, holding that the indictment did not charge respondent with price-fixing in violation of the antitrust laws; rather, the indictment merely recognized respondent's right to specify resale prices and to refuse to sell goods to wholesale and retail dealers who failed to resell the goods at those prices. According to the Court, a retail dealer has the unquestioned right to stop dealing with a wholesaler for reasons sufficient to himself, and may do so because he thought such dealer was acting unfairly in trying to undermine his trade.