Guided Response: Respond to at least two of your peers’ posts in a substantive manner and provide information or concepts that they may not have considered. Each response should have a minimum of 100 words. Support your position by using information from the week’s readings.
Information will assist with responding to discussion post’s #1 and #2: (PLEASE SEE WORD DOCUMENT FOR POSTS ONE THROUGH FOUR NEEDING A RESPONSE. THE BELOW INFORMATION IS BACKGROUND ON HOW TO HELP WITH RESPONDING TO THE POSTS)
Coed Theatres (Coed), a Cleveland area movie theater booking agent, began seeking customers in southern Ohio. Shortly thereafter, Superior Theatre Services (Superior), a Cincinnati booking agent, began to solicit business in the Cleveland area. Later, however, Coed and Superior allegedly entered into an agreement not to solicit each other’s customers. The Justice Department prosecuted them for agreeing to restrain trade in violation of § 1 of the Sherman Act. Under a government grant of immunity, Superior’s vice president testified that Coed’s vice president had approached him at a trade convention and threatened to start taking Superior’s accounts if Superior did not stop calling on Coed’s accounts. He also testified that at a luncheon meeting he attended with officials from both firms, the presidents of both firms said that it would be in the interests of both firms to stop calling on each other’s accounts. Several Coed customers testified that Superior had refused to accept their business because of the agreement with Coed. The trial court found both firms guilty of a per se violation of the Sherman Act, rejecting their argument that the rule of reason should have been applied and refusing to allow them to introduce evidence that the agreement did not have a significant anticompetitive effect.
Information will assist with responding to discussion post’s #3 and #4 in the attachment below:
Between 1966 and 1975, the Orkin Exterminating Company, the world’s largest termite and pest control firm, offered its customers a “lifetime” guarantee that could be renewed each year by paying a definite amount specified in its contracts with the customers. The contracts gave no indication that the fees could be raised for any reasons other than certain narrowly specified ones. Beginning in 1980, Orkin unilaterally breached these contracts by imposing higher-than-agreed-upon annual renewal fees. Roughly 200,000 contracts were breached in this way. Orkin realized $7 million in additional revenues from customers who renewed at the higher fees. The additional fees did not purchase a higher level of service than that originally provided for in the contracts. Although some of Orkin’s competitors may have been willing to assume Orkin’s pre-1975 contracts at the fees stated therein, they would not have offered a fixed, locked-in “lifetime” renewal fee such as the one Orkin originally provided.
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