Which of the following is true of the Colgate doctrine?
A) It is not a violation of Section 1 of the Sherman Act.
B) It is an example of a horizontal restraint of trade.
C) It is a per se violation of Section 1 of the Sherman Act.
D) It is a rule of reason violation of Section 1 of the Sherman Act.

Question

Quizplus · Accepted Answer

The Colgate doctrine refers to a manufacturer's right to unilaterally refuse to deal with a distributor, and such actions are generally deemed legal as long as there is no agreement or coordination with other competitors to refuse dealing with the same distributor. The Supreme Court has held that this unilateral decision does not violate Section 1 of the Sherman Act unless there is evidence of an agreement or conspiracy among competitors to engage in the same conduct. Therefore, choice A is the correct answer. Choice B is incorrect because it implies a coordinated action among competitors, which is not the case under the Colgate doctrine. Choice C is also incorrect because the Colgate doctrine is not a per se violation of Section 1 of the Sherman Act. Lastly, choice D is incorrect because the rule of reason analysis applies to conduct that has potential pro and anticompetitive effects, and the Colgate doctrine is not necessarily anticompetitive in nature.

Which of the Following Is True of the Colgate Doctrine