Antitrust Laws. Great Western Directories, Inc (GW), is an independent publisher of tel-ephone directory Yellow Pages. GW buys information for its listings from Southwestern Bell Telephone Co (SBT). Southwestern Bell Corp owns SBT, as well as

Question

Southwestern Bell Yellow Pages (SBYP), which publishes a directory in competition with GW. In June 1988, in some markets, SBT raised the price for its listing information, and SBYP lowered the price for advertising in its Yellow Pages. GW feared that these companies would do the same thing in other local markets, making it too expensive for GW to compete in those markets. Because of this fear, GW left one market and declined to compete in another. Consequently, SBYP had a monopoly in those markets. GW and another independent publisher filed a suit in a federal district court against Southwestern Bell Corp What antitrust law, if any, did Southwestern Bell Corp violate? Should the independent companies be entitled to damages?

Answer 1

Antitrust laws
The independents alleged violations of the Sherman Act (and various state laws). They con-tended that the Southwestern Bell Corp. had orchestrated an effort to extend a monopoly of the yellow pages market and to eliminate competition. The federal district court ruled in their favor and awarded them damages. The Southwestern Bell Corp. appealed, and the U.S. Court of Appeals for the Fifth Circuit upheld the judgment that the Southwestern Bell Corp. had violated the Sherman Act, but reversed the award of damages. The appellate court held that the inde-pendents' fear of future increases in the price for directory listing information was too specu-lative to support a damage award. The court pointed out that "such acts may never occur."