Pacific Bell Telephone Company, Dba AT&T California et al. v. Linkline Communications, Inc., et al. (555 U.S. 438)
U.S. Supreme Court · decided February 25, 2009 · Supreme Court Database (Spaeth)
- Citation
- 555 U.S. 438 · 129 S. Ct. 1109
- Decided
- February 25, 2009
- Term
- October Term 2008
- Vote
- 9–0
- Majority author
- Justice Roberts
- Issue area
- Economic Activity
- Disposition
- Reversed and remanded
- Outcome
- Petitioning party won
- Ideological direction
- Conservative
Opinion excerpt
Chief Justice Roberts delivered the opinion of the Court. The plaintiffs in this case, respondents here, allege that a competitor subjected them to a “price squeeze” in violation of §2 of the Sherman Act. They assert that such a claim can arise when a vertically integrated firm sells inputs at wholesale and also sells finished goods or services at retail. If that firm has power in the wholesale market, it can simultaneously raise the wholesale price of inputs and cut the retail price of the finished good. This will have the effect of “squeezing” the profit margins of any competitors in the retail market. Those firms will have to pay more for the inputs they need; at the same time, they will have to cut their retail prices to match the other firm’s prices. The question before us is whether such a price-squeeze claim may be brought under § 2 of the Sherman Act when the defendant is under no antitrust obligation to sell the inputs to the plaintiff in the first place. We hold that no such claim may be brought. I This case involves the market for digital subscriber line (DSL) service, which is a method of connecting to the Internet at high speeds over telephone lines. AT&T owns much of the infrastructure and facilities needed to provide DSL service in California. In particular, AT&T controls most of what is known as the “last mile” — the lines that connect homes and businesses to…
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