Blomkest Fertilizer, Inc. v. Potash Corp. of Saskatchewan, Inc.

BEAM, Circuit J.

A certified class of potash consumers appeals the district court’s ¹ grant of summary judgment in favor of defendants (collectively “the producers”) in this action for conspiracy in restraint of trade under section 1 of the Sherman Act. We affirm.

I. BACKGROUND

This ease involves the production and sale of potash, a mineral essential to plant growth and therefore used in fertilizer. The certified class includes all of those persons who directly purchased potash from one of the producers between April 1987 and July 1994. The class named six Canadian potash companies and two American companies.²

Both parties agree that the North American potash industry is an oligopoly.³ Prices in an oligopolistic market tend to be higher than those in purely competitive markets, and will fluctuate independently of supply and demand. See Enrico Adri-ano Raffaelli, Oligopolies and Antitrust Law, 19 Fordham Int’l. L.J. 915, 916 (1996). Furthermore, “price uniformity is normal in a market with few sellers and homogeneous products.” E.I. Du Pont de Nemours & Co. v. Federal Trade Comm’n, 729 F.2d 128, 189 (2d Cir.1984). This is because all producers in an oligopoly must charge roughly the same price or risk losing market share.

The Canadian province of Saskatchewan is the source of most potash consumed in the United States. The province founded defendant Potash Corporation of Saskatchewan (PCS), which holds thirty-eight percent of the North American potash production capacity. As a governmental company, PCS had no mandate to maximize profits and was not accountable to private owners. Instead, the company was primarily concerned with maintaining employment and generating money for the local economy. Not surprisingly, PCS suffered huge losses as it mined potash in quantities that far outstripped global demand. These policies impacted the entire potash industry: during the 1980’s, the price of potash fell to an historic low. In 1986, Saskatchewan voters elected a provincial government which had promised to privatize PCS. New management was appointed to PCS after the elections. Thereafter, PCS significantly reduced its output and raised its prices.

Also in 1986, New Mexico Potash Corporation (NMPC) and another American potash producer (who is not a named defendant) filed a complaint with the United States Department of Commerce. Frustrated with low potash prices, the petitioners alleged that Canadian producers had been dumping their product in the United States at prices below fair market value. In 1987, the Department issued a preliminary determination that the Canadian producers were dumping potash and ordered the companies to post bonds on all exports to the United States. These bonds were set according to each firm’s calculated “dumping margin.” ⁴ Eventually, the Department negotiated a Suspension Agreement with each of the Canadian producers. The agreement raised the price of Canadian potash in the United States by setting a minimum price at which each Canadian producer could sell in the United States.⁵ That agreement remains in effect today. When the Canadian producers entered into the Suspension Agreement, PCS .announced that it was raising its prices by eighteen dollars per ton. Other producers quickly followed suit. The price of potash has remained, markedly higher after the Suspension Agreement, although prices have slowly but steadily declined for the most part since the agreement was signed by the producers on January 8,1988.

The class alleges that between April 1987 and July 1994 the producers colluded to increase the price of potash. The producers, in ton, maintain that the price increase was the product of the interdependent nature of the industry and its reaction to the privatization of PCS and the Suspension Agreement. The district court granted the producers’s motions for summary judgment and the class appeals.

II. DISCUSSION

The class asserts that if we affirm the district court, we will “stand alone in holding that circumstantial evidence, even if overwhelming, cannot be used to defeat a summary judgment motion in anti-trust cases.” We make no such legal history here, however, because the class’s proffered evidence, far from overwhelming, fails to establish the elements of a prima facie case.

Section 1 prohibits concerted action by two or more parties in restraint of trade. 15 U.S.C. § 1. The Supreme Court in Monsanto Co. v. Spray-Rite Service Corp., 465 U.S. 752, 764 & 768, 104 S.Ct. 1464, 79 L.Ed.2d 775 (1984) and Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 588, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986), provided the standard used to determine whether the plaintiffs’s evidence of a section 1 violation survives a summary judgment motion. In order to state a section 1 case, plaintiffs must present evidence that “tends to exclude the possibility of independent action” by the defendants. Monsanto, 465 U.S. at 768, 104 S.Ct. 1464. This means that conduct that is “as consistent with permissible [activity] as with illegal conspiracy does not, standing alone, support an inference of antitrust conspiracy.” Matsushita, 475 U.S. at 588, 106 S.Ct. 1348. We are among the majority of circuits to apply Monsanto and Matsushita, broadly, and in both horizontal and vertical price fixing cases. See The Corner Pocket of Sioux Falls, Inc. v. Video Lottery Tech., Inc., 123 F.3d 1107, 1109 (8th Cir.1997), Cert. denied, 522 U.S. 1117, 118 S.Ct. 1054, 140 L.Ed.2d 116 (1998). Applied in this case, the standard requires that if it is as reasonable to infer from the evidence a price-fixing conspiracy as it is to infer permissible activity, then the plaintiffs’s claim, without more, fails on summary judgment.

The class’s’ price-fixing claim is based’ on' a theory of conscious parallelism. Conscious parallelism is the process “not in itself unlawful, by which firms in a concentrated market might in effect share monopoly power, setting their prices at a profit-maximizing, supracompetitive level by recognizing their shared economic interests.” Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 227, 113 S.Ct. 2578, 125 L.Ed.2d 168 (1993). The class points out that the producers’s prices were roughly • equivalent during the alleged conspiracy, despite differing production costs. It further points out that price changes by one producer were quickly met by the others. This establishes only that the producers consciously paralleled each other’s prices.

Evidence that a business consciously met the pricing of its competitors does not prove a violation of the antitrust laws. See Theatre Enter., Inc. v. Paramount Film Distrib. Corp., 346 U.S. 537, 540-41, 74 S.Ct. 257, 98 L.Ed. 273 (1954). Particularly when the product in question is fungible, as potash is, courts have noted that parallel pricing lacks probative significance. See Bendix Corp. v. Balax, Inc., 471 F.2d 149, 160 (7th Cir.1972). An agreement is properly inferred from conscious parallelism only when certain “plus factors” exist. See In re Baby Food Antitrust Litigation, 166 F.3d 112, 122 (3d Cir.1999); see, e.g., Admiral Theatre Corp. v. Douglas Theatre Co., 585 F.2d 877, 884 (8th Cir.1978) (requiring evidence that defendant acted contrary to self-interest in addition to evidence of conscious parallelism to establish antitrust violation). A plus factor refers to “ ‘the additional facts or factors required to be proved as a prerequisite to finding that parallel [price] action amounts to a conspiracy.’ ” In re Baby Food, 166 F.3d at 122 (quoting 6 Phillip E. Areeda, Antitrust Law § 1433(e) (1986)).

A plaintiff has the burden to present evidence of consciously paralleled pricing supplemented with one or more plus factors. See Todorov v. DCH Healthcare Auth., 921 F.2d 1438, 1456 n. 30 (11th Cir.1991). However, even if a plaintiff carries its initial burden, a court must still find, based upon all the evidence before it, that the plaintiffs evidence tends to exclude the possibility of independent action. See Monsanto, 465 U.S. at 764 & 768, 104 S.Ct. 1464; Matsushita, 475 U.S. at 588, 106 S.Ct. 1348; see also In re Baby Food, 166 F.3d at 122. As noted, the class identified parallel pricing. The class also asserts that it has established the existence of three plus factors: (1) interfirm communications between the producers; (2) the producers’s acts against self-interest; and (3) econometric models which purport to prove that the price of potash would have been substantially lower in the absence of collusion. The evidence underlying these assertions, however, does not bear the weight the class places upon it.

A. Interfirm Communications

The class alleges a high level of interfirm communications between the producers and complains most vociferously about price verification information. Courts have held that a high level of communications among competitors can constitute a plus factor which, when combined with parallel behavior, supports an inference of conspiracy. See, e.g., In re Plywood Antitrust Litigation, 655 F.2d 627, 633-34 (5th Cir. Unit A Sept.1981). However, the evidence presented by the class here is far too ambiguous to support such an inference. Considering the proof as a whole, the evidence of interfirm communications does not tend to exclude the possibility of independent action, as required under Monsanto and Matsushita, since other significant events strongly suggest independent behavior. The fundamental difficulty with the class’s argument regarding price verifications is that it assumes a conspiracy first, and then sets out to “prove” it. However, a litigant may not proceed by first assuming a conspiracy and then explaining the evidence accordingly.

The class’s evidence shows that the communications include meetings at trade shows and conventions, price verification calls, discussions regarding a Canadian potash export association, and the like. Taking the class’s evidence as true, roughly three dozen price verifications occurred between employees, including high-level sales employees, of different companies, over at least a seven-year period. In large part, these contacts involved the verification of prices the companies had already charged on particular sales. The impotence of this circumstantial evidence is that it bears no relationship to the price increases most in question because it lacks the logical link necessary to infer such a relationship.

The class alleges that the price-fixing conspiracy began “at least as early as April, 1987.” Complaint at 11. In 1987, the price for potash was at historically low levels, such that producers were losing millions of dollars. Then, a sudden and dramatic increase in price by PCS occurred on September 4, 1987, and approximately a week later the remaining producers followed suit.⁶ The class argues that the large and parallel price increases together with nearly simultaneous price verifications create an inference sufficient to survive summary judgment.

The problem with this theory, as indicated, is that the price verification communications only concerned charges on particular completed sales, not future market prices. There is no evidence to support the inference that the verifications had an impact on price increases. The only evidence is that prices were possibly cut as a result. “[T]o survive summary judgment, there must be evidence that the exchanges of information had an impact on pricing decisions.” In re Baby Food, 166 F.3d at 125 (citing Krehl v. Baskin-Robbins Ice Cream Co., 664 F.2d 1348, 1357 (9th Cir.1982)). There is no evidence here that price increases resulted from any price verification or any specific communication of any kind. Subsequent price verification evidence on particular sales cannot support a conspiracy for the setting of a broad market price on September 4,1987.

Even if we were to find the price verification evidence relevant, when considered with all the facts, it does not tend to exclude the possibility of independent action. To the contrary, there is strong evidence of independent action. Just before and concurrent with the suspect price increases, the following occurred: the price of potash was at historic lows and the producers were losing millions; potash companies in the United States complained to the United States Department of Commerce that the Canadian producers were dumping potash at well-below market value; the Department of Commerce made a preliminary determination that the Canadian producers were dumping and required expensive bonds for all imports; the industry leader, the government-founded PCS, hired new management and began privatization with the goal of becoming profitable; legislation was passed in the province of Saskatchewan — the source of nearly all United States potash — that provided for the setting and prorating of potash production; potash producers reached a Suspension Agreement with the Department of Commerce that set price floors for potash; and PCS was finally privatized and significantly reduced its output. In the face of these circumstances and with the price leadership of PCS in this oligopolistic industry, it would have been ridiculous for the remaining companies to not also raise their prices in a parallel fashion. Thus, we find the class’s weak circumstantial evidence that the dramatic increases were the result of a price-fixing agreement is not sufficient to survive summary judgment.

This leaves only the question whether there is sufficient evidence to support an agreement to stabilize and maintain prices in violation of section 1 of the Sherman Act. The class’s evidence of an agreement to maintain the price of potash at an artificially high level after the initial price increases is again the parallel pricing and price verifications. Parallel pricing has been conceded, leaving the burden once again on the verifications. Common sense dictates that a conspiracy to fix a price would involve one company communicating with another company before the price quotation to the customer. Here, however, the class’s evidence consists solely of communications to verify a price on a completed sale. The price verifications relied upon were sporadic and testimony suggests that price verifications were not always given. The fact that there were several dozen communications is not so significant considering the communications occurred over at least a seven-year period in which there would have been tens of thousands of transactions. Furthermore, one would expect companies to verify prices considering that this is an oligopo-listic industry and accounts are often very large. We find the evidence falls far short of excluding the possibility of independent action.

In re Baby Food, 166 F.3d at 112, aptly illustrates why the communications complained about here are inadequate to exclude the possibility of independent action by the producers. The defendants, nationally prominent corporations with ninety-eight percent of the baby food business, were Gerber, H.J. Heinz, and Beech-Nut. It is true that the numerous intercompany pricing communications found by the Third Circuit to be insufficient to support a section 1 violation were characterized in one part of the opinion as price discussions among low-level employees. See id. at 125. However, deposition testimony in that case revealed that district sales employees and district sales managers of Heinz “were required to submit competitive activity reports to their superiors concerning baby food sales from information they picked up from competitor sales representatives.” Id. at 118-19. This same line of testimony revealed that supervising managers for Heinz informed district managers “on a regular basis before any announcement to the trade as to when Heinz’s competitors were going to increase [their] wholesale list prices.” Id. at 119. The president of Beech-Nut “testified that it was [Beech-Nut’s] policy for sales representatives to gather and report pricing information of [Beech-Nut’s] competitors.” Id. (emphasis added). Indeed, the In re Baby Food case is replete with evidence that pricing information was systematically obtained and directed to high-level executives of Gerber (including Gerber’s vice president of sales), Beech-Nut and Heinz, the principal national competitors in the baby food industry.

The evidence in the case shows that a carefully conceived and effective system of price information gathering for the benefit of corporate executives was at all relevant times alive and well in the baby food industry. Notwithstanding communications that far surpassed any information exchanges established in this case, the Third Circuit applied Matsushita and granted summary judgment to the defendants, in large part because there was no evidence that the exchanges of information had an impact on pricing decisions. See In re Baby Food, 166 F.3d at 125. As earlier stated, there likewise is absolutely no such evidence in this litigation, only speculation.

The class directs our attention to In re Brand Name Prescription Drugs Antitrust Litigation, 123 F.3d 599, 614 (7th Cir.), cert. denied, 522 U.S. 1153, 118 S.Ct. 1178, 140 L.Ed.2d 186 (1998), in which the plaintiffs, like the class, searched through an enormous quantity of discovery material and culled out a number of suspicious interfirm communications. The court in Brand Name described these documents produced as “smoking guns.” Id. By contrast, the communications here are facially innocent contacts which are, at most, ambiguous on the question of whether the producers schemed to set prices.

The class argues that a memorandum issued by Canpotex, a lawful Canadian cartel that sets prices for potash sold outside of the United States, is the class’s “smoking gun.” This memorandum, dated January 8, 1988, and directed to its “agents and offices” reads in pertinent part:

FYI Canadian potash producers have reached agreement with the United States Department of Commerce and all dumping action has been suspended for minimum 5 years. It is rumoured that the USD 35.00 per metric ton increase posted by Canadian producers in 1987 to cover possible tariff payments to the U.S. Govt will be refunded in full or part. In the meantime new price lists are being issued on Monday Jan. 11 at:

Standard Grade USD 80.00

Coarse Grade USD 84.00

Granular Grade USD 86.00

Appellants’s Joint App. at 910.

The class asserts that this memorandum establishes an agreement to fix prices. The class argues that the people who received the January 8, 1988, memorandum were all high-ranking officials in the producers’s companies who were on the Board of Directors of Canpotex, and therefore, the memorandum is evidence that tends to exclude an inference that the producers acted independently.

The magistrate judge disagreed that this memorandum was sufficient evidence to exclude the possibility that the producers acted independently. The magistrate judge first noted that PCS had also announced the same prices in a telex to its customers on January _8, 1988, and thus the possibility that Canpotex learned of the price list from a customer of PCS could not be excluded. In re Potash Antitrust Litigation, 954 F.Supp. 1334, 1366 (D.Minn.1997). Further, the magistrate judge discovered that while most of the Canadian defendants had matched the prices in the memorandum by January 22, 1988, they did not uniformly issue price lists matching those prices on January 11, 1988, and one producer, Kalium, did not match those prices at all. See id. However, as the magistrate judge pointed out, “evidence that the alleged conspirators were aware of each other’s prices, before announcing their own prices, ‘is nothing more than a restatement of conscious parallelism,’ which is not enough to show an antitrust conspiracy.” Id. (quoting Market Force Inc. v. Wauwatosa Realty Co., 906 F.2d 1167, 1172 (7th Cir.1990)). See also Weit v. Continental Ill. Nat’l Bank and Trust Co., 641 F.2d 457, 462 (7th Cir.1981) (mere opportunity to conspire even in context of parallel business conduct not necessarily probative evidence of price-fixing conspiracy).

We agree with the magistrate judge’s finding that this document was not sufficient evidence to exclude an inference that the producers acted independently. First, the memorandum was written by R.J. Ford and directed to “agents and offices.” Appellants’s Joint App. at 910. It is not at all clear who this memorandum was sent to or received by, and a thorough review of the appellants’s voluminous joint appendix has not clarified this point. Dozens of these high ranking officials were deposed during pretrial discovery, and according to the documents submitted by the class in its joint appendix, only one person, Dave Benusa, was asked if he received “any document dated the 8th of January 1988 concerning pricing.” Appellants’s Joint App. at 970. Benusa was manager of marketing for Comineo American in 1988. Benusa stated in his deposition that he did not receive any document dated January 8, 1988, concerning pricing. The class apparently did not depose the author of the memorandum, R.J. Ford, nor did they make any further attempt that we can find to identify who received this “smoking gun” piece of evidence. Another document produced by Canpotex, an inter-office memorandum dated September 8, 1993, is actually directed to “Members of the Board of Directors of Canpotex Limited.” Appellants’s Joint App. at 911. We assume that had the January 8, 1988, memorandum been intended for the members of the board of directors, it likewise would have so stated.

Furthermore, even if, as the class asserts, the memorandum had been received by high-ranking officials in the producers’s companies, we agree with the magistrate judge’s reasoning that the memorandum does not assist the class in proving the existence of a conspiracy. As the magistrate judge pointed out, the producers did not uniformly increase prices to match the memorandum on January 11, 1988, and furthermore, one producer, Kalium, did not match the memorandum price at all. The fact that most of the producers did increase prices to match the PCS price increase of January 11, 1988, is not surprising in a market where conscious parallelism is the norm. Despite submitting a five-volume joint appendix, the class has failed to present evidence about this memorandum which tends to exclude the possibility of independent action by the producers. As it turns out, the “smoke” from this gun is barely, if at all, discernible.

Finally, the class asserts that the producers signaled pricing intentions to each other through advance price announcements and price lists. The Supreme Court has held, however, that “the dissemination of price information is not itself a per se violation of the Sherman Act.” United States v. Citizens & S. Nat’l Bank, 422 U.S. 86, 113, 95 S.Ct. 2099, 45 L.Ed.2d 41 (1975).

As we noted at the outset, the class may not proceed by first assuming a conspiracy and then setting out to prove it. If the class were to present independent evidence tending to exclude an inference that the producers acted independently, then, and only then, could it use these communications for whatever additional evidence of conspiracy they may provide. As the record stands, we find these contacts far too ambiguous to defeat summary judgment. See The Corner Pocket, 123 F.3d at 1112.

B. Actions Against Self-interest

Evidence that defendants have acted against their economic interest can also constitute a plus factor. See, e.g., Petruzzi’s IGA Supermarkets, Inc. v. Darling-Delaware Co., 998 F.2d 1224, 1243-45 (3d Cir.1993) (denying defendants’s motion for summary judgment where defendants refrained from bidding aggressively on accounts already serviced by other defendants). However, where there is an independent business justification for the defendants’s behavior, no inference of conspiracy can be drawn. See Todorov v. DCH Healthcare Auth., 921 F.2d 1438, 1456-57 (11th Cir.1991).

The only evidence of actions against interest that the class has identified is the producers’s uniform participation in the Suspension Agreement.⁷ The class argues that those producers with low dumping margins could have undercut other producers’s prices and gained market share while still maintaining prices at profitable levels. Instead, the low tariff producers joined the Suspension Agreement. The class further posits that NMPC’s⁸ failure to object to the agreement was an action against self-interest.

In response, the producers point out that Department of Commerce investigations are unpredictable, and participation in the agreement reduced uncertainty. Furthermore, without the Suspension Agreement, even low tariff producers would have been required to post substantial bonds which would have caused considerable capital drain on corporate coffers. Like the Canadian producers, NMPC was uncertain about the ultimate outcome of the Department of Commerce’s investigation. Under the Suspension Agreement, NMPC obtained certainty and a higher price for potash sold in the American market. This is the relief NMPC initially sought, and it is unsurprising that NMPC would not oppose such an outcome.

The class has thus failed to carry its burden to rebut the producers’s independent business justification for their actions. See Laurel Sand & Gravel, Inc. v. CSX Transp. Inc., 924 F.2d 539, 543 (4th Cir.1991). There is nothing in this record that contradicts the conclusion that ending the dumping investigation with a settlement that required unreasonably low potash prices to rise was a legitimate business decision for the low tariff producers. They benefitted from increased revenues, while avoiding the cost of litigation and the risk of penalties. This cannot be construed as an act against self-interest.

C. Expert Testimony

Finally, the class argues that its expert’s econometric model provided crucial confirmation that the prevailing potash prices during the alleged conspiracy were above those expected in the Absence of collusion. While their expert .concedes that the prices have primarily steadily decreased ⁹ since January 8, 1988, he asserts thaf prices would have been much lower absent an agreement to fix prices. We need not decide whether such evidence, in a proper case, could constitute a plus factor, because we find the report in this case is not probative of collusion.

. The class’s expert evidence is lacking in two crucial respects, First, the expert admits that his model fails to take into account the dramatic events of 1986. In his deposition, the class’s expert confirmed that his model considers neither the privatization of PCS nor the anti-dumping proceedings. It is beyond dispute, that even without collusion, those events would have led to higher potash prices. A model that does no more than report that prices did, indeed, rise after these events tells us nothing about the existence of industry collusion.

A second flaw in the expert’s report, as the magistrate judge'noted, is that it relies almost exclusively on evidence (such as the producers’s common membership in trade associations and their publication of price lists to customers) that is not probative of collusion as a matter of law. Under Federal Rule of Evidence 703, the facts underlying an expert’s opinion- need not be admissible if they are “of a type, reasonably relied upon- by experts in a particular field.” The- rule, however, contemplates that there will be “sufficient facts already in evidence or disclosed by the witness as a result of his or her investigation to' take such expert opinion testimony out- of the realm of guesswork and speculation.” Hurst v. United States, 882 F.2d 306, 311 (8th Cir.1989) (quotation omitted). In this case, the expert’s model, is fundamentally unreliable because of his heavy (if not exclusive) reliance on evidence that is not probative of conspiracy, coupled with his failure, to consider significant external forces that served to raise the price of potash. See Loudermill v. Dow Chem. Co., 863 F.2d 566, 570 (8th Cir.1988).

III. CONCLUSION

We have carefully considered each of the class’s other arguments and find them to be without merit. The class has failed to present evidence of collusion sufficient to create a genuine issue of material fact. The producers are therefore entitled to summary judgment. For the foregoing reasons, the decision of the district court is affirmed.

1 . The Honorable Richard H. Kyle, United States District Judge for the District of Minnesota, adopting the Report and Recommendation of the Honorable Raymond L. Erickson, United States Magistrate Judge for the District of Minnesota.

2 . (1) Potash Corporation of Saskatchewan, Inc. and Potash Corporation of Saskatchewan Sales, Ltd. (collectively "PCS’’); (2) Comineo, Ltd. and Comineo American, Inc. (collectively "Comineo”); (3) IMC Global, Inc.; (4) Kali-um Chemicals, Ltd., Kalium Canada, Ltd. and its former owner and operator, PPG Industries, Inc. and PPG Canada, Ltd. (collectively "Kalium”); (5) Noranda Mineral, Inc., No-randa Sales Corporation Ltd. and Central Canada Potash Co. (collectively "Noranda”); (6) Potash Corporation of America, Inc. and its owner Rio Algom, Ltd. (collectively "PCA”); (7) New Mexico Potash Corporation (NMPC) and its affiliate, (8) Eddy Potash Inc. (Eddy).

3 . An oligopoly is an "[e]conomic condition where only a few companies sell substantially similar or standardized products.” Black's Law Dictionary 1086 (6th ed.1990).

4 . The dumping margin was calculated by the Department based on a comparison of the United States sale price, foreign market value, and cost of production for each producer.

5 . Under the agreement, each firm could sell potash in the United States at less than fair market value by an amount equal to 15% of its preliminary dumping margin.

6 . This price increase was rescinded in the wake of the Suspension Agreement. In its place came a much smaller increase by PCS on January 11, 1988 — three days after the Suspension Agreement created a price floor— which pricing decision was followed thereafter by the remaining producers.

7 . The class also asserts that PCS acted against its self-interest when it agreed to supply potash to PCA when PCA’s mine flooded. This agreement occurred in February 1987, before the class contends the conspiracy ever began. It is, therefore, of little relevance to this case.

8 . The class also asserts that failure to object to the Suspension Agreement was contrary to Eddy’s self-interest. This argument is puzzling because Eddy was not in existence at the time of the agreement and thus could hardly have objected to it.

9 . It has been suggested that in the context of a price-fixing agreement among several producers in an oligopoly, the price actually would decrease somewhat over time because individual producers would attempt to "cheat” on the agreement by slightly lowering prices. Our review of the learned treatises on oligopolies and antitrust law does not seem to bear this theory out. First, there is very little discussion of the phenomenon of steadily lowering prices in an alleged price-fixing conspiracy. Second, several commentators have suggested that the incentive to lower prices while other oligopolists maintain prices deters collusion in the first place. See Jonathan B. Balter, Two Sherman Act Section 1 Dilemmas: Parallel Pricing, the Oligopoly Problem, and Contemporary Economic Theory, 38 Antitrust Bull. 143, 151 (1993) (analyzing George Sti-gler’s 1964 article, A Theory of Oligopoly, 72 J.Pol.Econ. 44 (1964) and recognizing that "the unilateral incentive to deviate on a cooperative arrangement to fix price ... is the very markét force by which competition insures low prices and high output”); see also Donald F. Turner, The Definition of Agreement Under the Sherman Act: Conscious Parallelism and Refusals to Deal, 75 Harv.Law Rev. 655, 660 (1962) (noting that without an agreement among oligopolists, the pressure to cut prices is irresistible).