Elko, Inc and Fuldan, Inc closely monitor each other's actions regarding the sale of consumer electronic products. Each corporation tries to match the other's product designs and specifications, prices, and advertising strategies. As a result, the two corporations have similar products, prices, and profits. Is this a violation of the antitrust laws?
This may very well be a violation of Section 1 of the Sherman Act. However, it is not easy to distinguish concerted action from unilateral but parallel action. Conscious parallelism alone, as shown by individual acts, is not sufficient to infer a conspiracy in violation of Section 1 . There must also be an additional factor, such as complex action taken by each competitor that would only benefit each competitor if all of them took similar action. Identical sealed bids from each competitor might also indicate a conspiracy. A violation of the Sherman Act requires concerted action and not just unilateral but parallel action.
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