Pacific Bell Telephone Co. v. linkLine Communications, Inc.: The Supreme Court Provides Clarity Sort Of

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David Olsky, Apr 15, 2009

Much of the commentary published since thelinkLine decision has focused on the first part of the Court’s ruling. Specifically the Court held that, per its earlier ruling in Verizon Communications Inc. v. Law Offices of Curtis V. Trinko, LLP, AT&T had no antitrust duty to deal with linkLine at the wholesale level. More far reaching, however, is likely the second part of the Court’s ruling that any claim that AT&T undercut linkLine’s pricing at the retail level must meet the strictures of the Brooke Group test. In so holding, the Court provided the clearest statement yet that Brooke Group was intended to apply to any suit brought by a competitor in which the crux of the claim is that the defendant caused harm through its pricing. Moreover, the Court expounded on the virtues of providing clear rules to firms, rather than having the judiciary determine what constitutes a “fair” price a task better left to a government agency, or, better yet, the market. So, is the law now clear for firms considering whether to provide price discounts, and the manner in which to provide those discounts? The answer: sort of. The Supreme Court’s unabashed affirmation of Brooke Group is reassuring, but at least two major complications remain.