Tuesday, January 17, 2017
Antitrust or corporate speech?
Is this supposed plan among San Diego-area (and possibly Los Angeles-based) moving companies not to take any jobs related to the Chargers move to L.A. an antitrust violation? I know consumer boycotts are protected free-speech. But isn't an agreement among members of an industry not to engage in certain business behavior the anti-competitive collusion the antitrust laws prohibit? Is it different if the collusion is for expressive purposes? And if so, wouldn't that swallow the antitrust laws, because companies always would argue that their business decisions were driven by political concerns?
Besides what better captures the sadness of a franchise relocation?
In NAACP v. Claiborne Hardware Co., 458 U.S. 886 (1982) the Supreme Court held that the First Amendment protected civil rights activists who boycotted white-owned businesses because of their race discrimination. But in Superior Court Trial Lawyers, 493 U.S. 411 (1990) the Court distinguished Claiborne. In Superior Court the trial lawyers were boycotting representation of indigent criminal defendants until the city agreed to pay more. This self-interest motivation served to make the boycott "commercial," and the antitrust laws applicable. Unless the facts indicate otherwise, the moving company boycotts seems to resemble Claiborne more than Trial Lawyers. I don't know how the boycotters stand to gain financially from their boycott, which is costly to the extent that at least some of them could have had this business. I think the First Amendment case is fairly strong.
Posted by: Herbert Hovenkamp | Jan 17, 2017 9:28:35 AM
Thank you for this. I am curious: Is financial gain always required? What about a situation in which competitors agree not to compete but to each accept their own piece of the pie (I'm thinking of the Baby Bells not entering one another's territories)? Does that get a different analysis? Or is the point here that no one is getting any business?
Posted by: Howard Wasserman | Jan 17, 2017 9:55:11 AM
One assumes that IF the Baby Bells agreed to stay out of one another's territories (The Supreme Court found this not to be sufficiently alleged in Twombly), then the motive would be profit -- that is, each company would earn more by retaining a dominant position in its originally assigned territory than by both competing and facing competition from others across the country. That is the way naked geographic market division ordinarily works.
Posted by: Herbert Hovenkamp | Jan 17, 2017 10:36:38 AM