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Business Electronics Corp. v. Sharp Electronics Corp.

United States Supreme Court
485 U.S. 717 (1988)


In 1972, Sharp Electronics Corporation (Sharp) (defendant) sold calculators to two retailers in the Houston, Texas area. The two retailers were Business Electronics Corporation (BEC) (plaintiff) and Gilbert Hartwell (Hartwell) (defendant). Sharp gave both BEC and Hartwell a list of suggested minimum retail prices. Both retailers frequently priced their calculators below Sharp’s recommended price. In 1973, Hartwell complained to Sharp that BEC was pricing its calculators too low. Hartwell threatened to stop selling Sharp products unless Sharp ended its relationship with BEC. Sharp gave in to Hartwell’s demand and terminated the BEC dealership. BEC sued Sharp and Hartwell, alleging that Sharp and Hartwell conspired to terminate BEC’s dealership in violation of the Sherman Act. The district court instructed the jury that an agreement between Sharp and Hartwell to terminate BEC for price-cutting was a per se violation of the Sherman Act. The jury returned a verdict for BEC. The appellate court reversed, holding that an agreement between a manufacturer and dealer to terminate another dealer is per se unlawful only if the manufacturer exercises control over the conspiring dealer’s prices. BEC petitioned the United States Supreme Court for a writ of certiorari.

Rule of Law


Holding and Reasoning (Scalia, J.)

Dissent (Stevens, J.)

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