Court Cases

The Trans-Missouri Freight Association was a group of 18 railroads
- Every month, they met to decide rates, rules and regulations on shipping
- Firms who undercut the agreed upon price were charged $100
Trans-Missouri claimed the collusion was to avoid “ruinous competition” and that they agreed upon “reasonable” rates
- The courts ruled that this was a violation of the Sherman Act as it was a restraint of trade

This involved 23 producers of pottery fixtures for bathrooms to fix prices
Trenton admitted that they fixed prices but the question of the reasonableness of the fixed prices was brought up
- Up until this point, the reasonableness of price fixing was unclear
This case set precedent that price fixing is a per se violation
- Thus, all price fixing is deemed illegal!

Gasoline and oil were sold in three separate markets
- The main market where most oil and gas went
- The “hot oil” and “hot gas” market, where illegally produced (oil and gasoline produced in violation of state prorationing laws) oil and gas were sold at a discount
- “Distress sales” where gasoline sold at low prices due to inadequate storage of independent refiners
The distress market caused prices to fall for major oil companies, so the major companies colluded to buy off all of the distress market oil with goals of raising prices
- Each major oil company was paired with a “dance partner” and the pair would agree on a price
- The major oil companies did not agree on a uniform price to charge
  - They claimed that the Trenton Potteries case did not apply
- The courts disagreed and ruled that any conspiracy to set prices counts as a per se violation