Thursday, September 22, 2016

Milestones: Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986)


U.S. television makers sued Japanese television makers, alleging that the Japanese TV makers artificially kept the prices in Japan high in order to keep the prices in the U.S. low. The Supreme Court found that such "predatory pricing" scheme is unlikely to occur, especially in a situation involving multiple companies. Based on the finding that the Japanese TV makers lacked the ability to charge monopolistic prices in the U.S., the court found that there was no evidence of predatory pricing scheme. Accordingly, the court granted summary judgment.


This case should go down in the annals of the history of U.S.-Japan trade war. As the dissenting opinion notes, the court's reasoning for summary judgment is more than a little suspect. But the Supreme Court essentially raised the bar on the level of proof that is required for a case to pass through summary judgment, handing down defeat to U.S. television makers.

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