On June 23, 2008, the Seventh Circuit affirmed dismissal of a Marathon gas station franchisee’s claim that requiring the use of Marathon transaction processing equipment for transactions with Marathon gas cards violated the Sherman Act. Sheridan v. Marathon Petroleum Co. LLC, No. 07-3543, 2008 WL 2486581 (7th Cir. June 23, 2008). To state a claim for tying in violation of Section 1 of the Sherman Act, the franchisee had to plead, among other things, that Marathon had monopoly power and that sale of one product (the tying product) is conditioned on the purchase of another product (the tied product). Judge Posner found that the complaint lacked sufficient allegations of market power because “[n]o market shares statistics for Marathon either locally or nationally are given, and there is no information in that complaint that would enable local shares to be calculated.” Id. at *4. Judge Posner also found no tying because “[a]ll that [Marathon] has done is require its franchisees to honor Marathon credit cards and to process sales with them through the system designated by Marathon so that customers who use its cards have the same purchasing experience no matter which Marathon gas station they buy from.” There is no requirement that franchisees use the Marathon processing system for other credit cards. Although the issues in this case are straightforward, Judge Posner’s opinion is very useful in explaining under what circumstances a tying arrangement might be illegal.
Home / Antitrust, Section 1 (Sherman Act), Twombly / Judge Posner Affirms Dismissal of Franchisee’s Tying Claim
Jul
10
Judge Posner Affirms Dismissal of Franchisee’s Tying Claim
Posted by : Matthew Wild | On : July 10, 2008
Category: Antitrust, Section 1 (Sherman Act), Twombly
Tags:Antitrust, credit card, franchise, marathon, matthew wild, section 1, sherman act, tying
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