Antitrust
Butterfield v. Bonafide, 987 F.3d 123 (9th Cir. 2023)
Study notes for Butterfield v. Bonafide: professor notes, cold call prep, exam angles, and memory aids.
Agreements between competitors to allocate markets geographically are per se violations of Section 1 of the Sherman Act.
This case reaffirms the strict antipathy towards market allocation agreements as per se violations of the Sherman Act. The court clearly delineates that geographic market division undermines the competitive process by reducing choices for consumers and stifling competition. It serves as a critical reminder for students to understand not just the letter of antitrust law but also the intent behind it: to preserve competition and prevent monopolistic behaviors.
In this case, the court emphasizes that even without direct evidence of market harm, the very nature of the agreement itself poses a significant threat to competition. This precedent helps clarify the judiciary's stance on collusion among competitors and sets a benchmark for future cases that may examine similar agreements under antitrust scrutiny.
BAST: Butterfield Allocated, Sherman Troubled.
| Case | Distinction |
|---|---|
| United States v. Paramount Pictures, Inc. | In Paramount, the court focused on vertical restraints whereas Butterfield concerns horizontal agreements. |
| NCAA v. Board of Regents | NCAA involved restrictions on business conduct affecting competition, unlike the clear market allocation in Butterfield. |
Market allocation agreements inherently reduce competition, harming consumers by limiting choices and maintaining higher prices.
Some argue that not all market agreements are harmful and may sometimes enhance efficiency and resource allocation.
This case is essential for analyzing the scope of the Sherman Act and understanding per se violations. Expect questions that probe the rationale behind the court's decision and how it shapes antitrust enforcement.