William Inglis & Sons is a family-owned wholesale bakery with production facilities in Stockton, California, that manufactured and distributed bread and rolls in northern California. ITT Continental is one of the nation’s largest wholesale bakeries and was a competitor of Inglis in the northern California market. Both Inglis and Continental sold their bread under a private label and an advertised label. Continental’s advertised bread was “Wonder” bread, whereas Inglis’s advertised bread was “Sunbeam.” The private label bread is sold at a lower price than the advertised brand, but the principal difference between the two was the profit. Inglis filed a complaint stating that Continental was selling its private label bread at below-cost prices in a predatory price scheme designed to drive Inglis out of the market. Inglis also said the lower price on private bread earned Continental more grocery-shelf space for its “Wonder” bread. Is such conduct illegal under the Sherman Act? Is predatory pricing per se violation? William Inglis v. ITT Continental Baking Co., 668 F.2d (9th Cir. 1980).
Could Continental’s conduct be considered predatory pricing under the Sherman Act? Why or why not?
Is predatory pricing a per se violation? (Support your answer).
(Remember not to look up the case or post any information from its case decision for this case. Answers these questions based upon what you’ve read in the text and then we’ll find out how we did at the end of the week. There aren’t any ‘wrong’ answers while we are learning the material.)