NicSand v. 3M and Antitrust Injury
Earlier this week, the U.S. Court of Appeals for the Sixth Circuit issued an en banc decision in NicSand v. 3M. As the Court explains:
Between 1987 and 2001, NicSand and 3M were the only nationwide suppliers in the market for do-it-yourself automotive sandpaper, and they competed for the business of six large retailers, which controlled 80% of the market and which (with one exception) offered their shelf space on an exclusive basis for a year at a time. NicSand developed this niche market and eventually gained a 67% share of it. Between 1997 and 2001, however, it lost most of the market when 3M offered the large retailers greater up-front discounts and longer exclusive agreements than NicSand had offered in the past or apparently was willing to offer in the future.
The District Court dismissed NicSand’s lawsuit due to lack of an antitrust injury. On appeal, the Court held:
Because 3M did not engage in below-cost—or predatory—pricing, because five of the six large retailers demanded exclusivity as a precondition for doing business, because the allegations show no more than that 3M competed with its rival on the same essential terms that NicSand and the large retailers had already established for this market and because the antitrust laws in the end protect competition, not competitors, we affirm.
There is also a lengthy dissent.
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