Dentsply International manufactures artificial teeth for use in dentures and other restorative appliances and sells them to
Question:
Dentsply International manufactures artificial teeth for use in dentures and other restorative appliances and sells them to dental products dealers. The dealers, in turn, supply the teeth and various other materials to dental laboratories, which fabricate dentures for sale to dentists. The relevant market is the sale of prefabricated artificial teeth in the United States. Because of advances in dental medicine, artificial tooth manufacturing is marked by a low- or no-growth potential.
Dentsply has long dominated the industry consisting of 12–13 manufacturers and enjoys a 75 to 80 percent market share on a revenue basis, 67 percent on a unit basis, and is about 15 times larger than its next closest competitor. For more than 15 years, Dentsply has operated under a policy that discouraged its dealers from adding competitors’ teeth to their lines of products. Dentsply adopted “Dealer Criterion 6.” It provides that in order to effectively promote Dentsply-York products, authorized dealers “may not add further tooth lines to their product offering.” Did the exclusivity policy imposed on the dealers violate Section 2 of the Sherman Act?
Step by Step Answer:
Law for Business
ISBN: 978-1259722325
13th edition
Authors: A. James Barnes, Terry M. Dworkin, Eric L. Richards