New Standard for Bundled Discounts Clear But Limited

Law360, New York (October 19, 2007, 12:00 AM EDT) -- In Cascade Health Solutions v. PeaceHealth,[1] the Ninth Circuit adopted a new standard for determining when bundled discounts may constitute unlawful exclusionary conduct for purposes of proving monopolization or attempted monopolization claims under Section 2 of the Sherman Act.

Under this standard, a plaintiff must demonstrate, among other things, that after allocating the discount on the entire bundle of products to the competitive product alone, the defendant sold the competitive product below its average variable cost of producing that product.

The Ninth Circuit rejected the standard...
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