## Facts

- The United States brought a civil action under § 1 of the Sherman Act against Container Corporation of America and other corrugated-container manufacturers operating plants in the Southeastern United States.
- The defendants collectively accounted for about 90% of shipments of corrugated containers from plants in that region.
- Corrugated containers were treated as a fungible product sold in a market with inelastic demand where competition was primarily on price.
- From 1955 to 1963, industry capacity exceeded demand and prices generally trended downward even as the industry expanded.
- The defendants engaged in an informal, reciprocal practice of sharing, upon request, the most recent prices charged or quoted to identified customers, with the expectation of reciprocity and the understanding that the information reflected current bids.
- The information exchanges were irregular and infrequent; sometimes similar information could be obtained from customers or internal records.
- The government’s evidence indicated that the reciprocal exchange system stabilized prices (even if at a downward level) and reduced the intensity of price competition.

## Issues

1. Whether reciprocal, on-request exchanges of current, customer-specific price information among competitors constitute the “combination or conspiracy” element under Sherman Act § 1 absent an express agreement to follow particular prices.
2. Whether, given the market structure and the nature of the information, the exchanges unlawfully restrained trade by stabilizing prices and reducing price competition.

## Decision

- The Supreme Court reversed the district court’s dismissal and held for the United States.
- The Court held that participation in the reciprocal information-exchange system constituted concerted action sufficient to establish a combination or conspiracy under § 1.
- The Court held that, in the concentrated corrugated-container market, the exchange of current, customer-specific prices had an anticompetitive effect by stabilizing prices and reducing price competition, violating § 1.

## Legal Principles

- A reciprocal system of sharing current, transaction-specific price information among competitors can satisfy the concerted-action requirement of Sherman Act § 1 even without an express agreement on a price level or schedule.
- Information exchanges are evaluated in context; customer-specific, current price and bid information shared among rivals is more likely to restrain trade than aggregated or historical statistical reporting.
- In a highly concentrated market involving a fungible product and price-based rivalry, coordinated disclosure of current prices can stabilize pricing and constitute an unreasonable restraint of trade under § 1.

## Conclusion

The Court held that competitors’ reciprocal, on-demand sharing of current, customer-specific price information in a concentrated market constituted a § 1 conspiracy and unlawfully restrained trade because it stabilized prices and reduced price competition.


United States v. Container Corp. of Am., 393 U.S. 333 (1969)