Friday, May 30, 2008

Dismissal of Antitrust Challenge to Booksellers' Online Marketing Agreement Upheld

This posting was written by Jeffrey May, Editor of CCH Trade Regulation Reporter.

A consumer lacked standing to proceed with antitrust claims challenging a marketing agreement between online bookseller and brick-and-mortar bookseller Borders Group, Inc., the U.S. Court of Appeals in San Francisco has decided. Dismissal of the antitrust claims with prejudice (2005-2 Trade Cases ¶75,004) was affirmed.

Market Allocation Agreement

Under the 2001 agreement, Borders agreed to abandon its efforts in the online market, which had proven to be unsuccessful. Amazon and Borders agreed to jointly relaunch as a co-branded Web site, hosted by Amazon. The complaining consumer contended that the agreement was a per se illegal market allocation agreement, and that, as a result of the agreement, he was forced to pay supracompetitive prices.

The consumer failed to show, however, that he personally purchased an item for a higher price than he would have paid had there been no marketing agreement. Academic articles submitted to the court by the consumer could not establish that the consumer paid higher prices.

Moreover, the consumer did not even allege that he himself experienced any reduced selection of titles, poorer service, or any other potentially conceivable form of injury. The online bookseller, on the other hand, offered declarations showing that prices for books declined after the defendants entered into the agreement. Thus, the consumer suffered no injury-in-fact, according to the court.


Because the consumer failed to establish Article III standing, there was no reason to consider the consumer's antitrust standing, which limits the availability of antitrust damages to those plaintiffs who suffered the type of harm resulting from the kind of conduct that the antitrust laws were intended to eliminate.

The May 27 decision is Gerlinger v., Inc. It will be reported at 2008-1 Trade Cases ¶76,161.

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