supplier who sold the fit fittings. In Congress passed th infrastructure ed Star, a European-based Act that authorized S6 billion to the ture projects. The law createdsible for distributors to drop MeWane for the pipe fittings and that announced. The practical effect to enter the U.S. market and WORDS OF THE COURT to Star. forthcoming entry into the dealing arrangements are ne OF THE COURT: Exclusive Dealing Mc Wane implemented its "Full As we've observed, exclusive " among its existing distributors. The companies (such as Star) by threaten- from purchasing McWane's fittings for ing its rivals costs sufficiently to prevent them from Progranished distributors who bought fittir they can run afoul of the antitrust laws when used not per se unlawful, but firm to maintain its monopoly. Of particular relevance to this case, an exclusive ing arrangement can be harmful when it allows a monopolist to maintain its monopoly power by rais- halt their rebate program and cutting of ing 1 months. For example, when distribu - growing into effective competitors. Haot off sales of its domestic fittings to all posed a greater threat to competition tional exclusive dealing contract, as ca Corporation purchased Star fittings, the nature of the Full Support Program nches and withheld its rebates. Other arguably to competition than a conven- Hajtestified to abiding by the Full Support ditional procompetitive in order to avoid the devastating result of As we've noted, courts often take a permissive view cut off from all McWane fittings. Star was of such contracts on the grounds that firms compete d by some distributors even after offering a for exclusivity by offering procompetitive induce- nerou veal that McWane's express purpose was Star's costs and impede it from becoming imposed' by fiat upon all distributors benefits of such contracts s rebate than Mc Wane. Internal docu- ments (e.g.. lower prices, better service). But not here. The Full Support Program w ments upon all distributors, and the (trial T0 able competitor. The Federal Trade court] found that it resulted in 'no competition to found Commis- sion charged Mc Wane with a violation of the FTCA become the exclusive supplier and no discount. and ultimately the trial court found that McWane's rebate, or other consideration' offered in exchange actions constituted an illegal exclusive dealing pol- for exclusivity cy used to maintain its monopoly power in the pipe fitings market. Case Questions SYNOPSIS OF DECISION AND OPINION The U.S. Court of Appeals for the Eleventh Circuit 1. Why is the fact that McWane had a monopoly on pipe fittings important in the analysis of this affirmed the lower court decision in favor of the Federal Trade Commission. The court agreed that case 2. In what way did the McWane plan make it "eco- nomically infeasible" for a distributor to pur ful exclusive dealing arrangement that foreclosed Star's access to distributors for domestic fittings and h McWane's Full Support Program was an unlaw chase the fittings from a competitor? significantly to the maintenance of McWane's have avoided liability by designing the Full Sup- port Program in a different way? The court tells s that exclusive dealing arrangements are not 3. Focus on Critical Thinking: Could McWane armed competition, thereby contributing market. The court noted e two largest waterworks distributors in S.(with a combined 60 percent market monopoly power in the per se unlawful. How could this agreement be u re prohibited their branches from purchasing revised so it does not run afoul of antitrust laws