## Facts

- The Indiana Federation of Dentists (IFD) was an association of competing dentists practicing in Indiana.
- Dental insurers requested patient X-rays to evaluate the necessity and cost-effectiveness of proposed dental treatments for benefit claims.
- IFD adopted a policy requiring member dentists to refuse to submit X-rays to insurers, offering only narrative descriptions or permitting in-office inspection.
- The FTC alleged the policy was a concerted refusal that restrained trade, constituting an unfair method of competition under § 5 of the FTC Act by violating § 1 of the Sherman Act.
- After administrative proceedings, the FTC found an agreement among IFD members to withhold X-rays and issued a cease-and-desist order.
- The Seventh Circuit vacated the FTC’s order, reasoning that the FTC had not defined a relevant market, shown market power, or shown higher costs.
- The Supreme Court granted review.

## Issues

1. Whether substantial evidence supported the FTC’s finding that IFD’s X-ray policy diminished competition.
2. Whether, under the rule of reason, IFD’s horizontal agreement to withhold X-rays from insurers was an unreasonable restraint of trade under Sherman Act § 1 and therefore an unfair method of competition under FTC Act § 5.
3. Whether the FTC had to define a precise relevant market, prove market power, or show actual price increases or cost effects to condemn the restraint.
4. Whether asserted quality-of-care or state-policy rationales immunized IFD’s conduct from antitrust scrutiny.

## Decision

- The Supreme Court unanimously reversed the Seventh Circuit and reinstated the FTC’s cease-and-desist order.
- Substantial evidence supported the FTC’s findings that IFD members conspired to withhold X-rays and that competition among dentists over cooperation with insurers’ X-ray requests was diminished where IFD had influence.
- Under the rule of reason, the policy was an unreasonable restraint because it was a horizontal agreement to withhold from customers a service they sought, without a valid procompetitive justification.
- The FTC was not required to make specific market-definition or market-power findings, nor to prove actual increases in dental costs, where the record showed actual adverse effects on competition.
- Quality-of-care rationales did not justify the restraint, and alleged consistency with state policy did not immunize the conduct from federal antitrust law.

## Legal Principles

- A horizontal agreement among competitors to withhold a service or information desired by customers can violate Sherman Act § 1 under the rule of reason when it suppresses competition and lacks a procompetitive justification.
- In rule-of-reason cases, proof of actual detrimental effects on competition may support liability without precise market definition or a separate showing of market power.
- Antitrust liability does not require proof of actual price increases when a restraint’s anticompetitive effects are shown through the elimination of a competitive dimension.
- Professional associations are subject to federal antitrust law; generalized quality-of-care claims do not excuse concerted restraints that restrict consumer access to information.
- Private conduct is not exempt from antitrust scrutiny based on asserted state policy absent satisfaction of state-action requirements.

## Conclusion

The Court held that dentists’ collective refusal to provide X-rays to insurers unlawfully restrained competition under the rule of reason, and it sustained the FTC’s authority to condemn such conduct without requiring rigid market-definition, market-power, or price-effect proof when anticompetitive effects are adequately shown.


FTC v. Ind. Fed'n of Dentists, 476 U.S. 447 (1986)