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Monsanto Co. v. Spray-Rite Service Corp., Vertical restraints


Antitrust and Trade Regulation | Law and Economics


The decision in Monsanto Co. v. Spray-Rite Service Corp. represents the Supreme Court's latest effort to articulate the standards governing vertical restraints of trade under the United States anti-trust law. It is unlikely that this will be the last time the Court addresses this topic. Notwithstanding the many Supreme Court decisions in this area, several issues remain unresolved. Indeed, Monsanto may have created (or resurrected) as many new questions as it answered, a phenomenon characteristic of most prior opinions in this area.

At least part of the reason for this unsettled state is that, from the outset, the Supreme Court has been reluctant to apply a comprehensive analysis to vertical restraints of trade. Rather, in each case it has applied a simple principle or rule of thumb to a discrete aspect of the vertical restraint problem. Because of its piecemeal approach, the Court has failed to appreciate the incompatibility of these various principles. Hence, in each case one problem may have been resolved, but one or more new ones were created.

The process is not likely to reach "equilibrium" until the Court abandons its piecemeal approach in favor of a comprehensive analysis of vertical restraints. This is not to argue that there is necessarily a single solution to all vertical restraint questions. Nevertheless, a uniform analysis applied to each question would result in a family of solutions that are doctrinally consistent.

Publication Citation

Published in: Cornell Law Review, vol. 70, no. 3 (March 1985).