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

Exercise 9

In 1968, Business Electronics Corporation (BEC) became the exclusive retailer in the Houston, Texas, area of electronic calculators manufactured by Sharp Electronics Corporation. In 1972 Sharp appointed Hartwell as a second retailer in the Houston area. Sharp published a list of suggested minimum retail prices, but its written dealership agreements with BEC and Hartwell did not obligate either to observe them, or to charge any other specific price. BEC's retail prices were often below Sharp's suggested retail prices and generally below Hartwell's retail prices, even though Hartwell too sometimes priced below Sharp's suggested retail prices. Hartwell complained to Sharp on a number of occasions about BEC's prices. In 1973, Hartwell gave Sharp the ultimatum that Hartwell would terminate his dealership unless Sharp ended its relationship with BEC within 30 days. Sharp terminated BEC's dealership. BEC filed suit alleging that Sharp and Hartwell had unlawfully conspired to terminate BEC and that the conspiracy was illegal per se under the Sherman Act, Section I. Decide the case. Explain. See Business Electronics Corporation v. Sharp Electronics Corporation, 485 U.S. 717 (1988).