Law, Business, and Society 9th Edition by Tony McAdams

Exercise 35

Discon, a telephone salvage company, sold services to MECo, a subsidiary of NYNEX, a phone company for the New York/New England area. MECo switched from Discon to AT T Technologies, a Discon competitor, and paid a higher price to AT T than it had paid to Discon. Discon claimed that the buyer and NYNEX then received a rebate from AT T at the end of the year. Discon argued that NYNEX was able to pass on its higher costs to its customers because NYNEX was a part of a regulated phone market. Discon claimed that NYNEX, its subsidiaries, and AT T were engaging in a group boycott in violation of the Sherman Act in order to drive Discon out of the market. Decide. Explain. See NYNEX Corp. v. Discon, Inc., 119 S.Ct. 493 (1998).