XxXxxxxxx 124. In the class action against defendants, Toys“R”Us, Inc., the parent company of baby-product retail chain Babies“R”Us, Inc. (“BRU”), and baby-product manufacturers,125）thirteen consumers who had purchased the baby products alleged that BRU conspired with the manufacturers to restrict competition in violation of Section 1 of the Xxxxxxx Act. Specifically, the plaintiffs alleged that BRU coerced the manufacturers into adopting vertical price policies designed to prevent retail discounting and then charged consumers higher prices. Defendant, retail giant Toys“R”Us, Inc. created BRU and opened several stores in 1996, hoping to capture the U.S. retail market for baby products, which had been dominated by small specialty stores. Unlike these stores, BRU carried many brands and all types of baby products at one location. By purchasing other retail stores, establishing many new stores year by year, and opening an online store, BRU became the dominant retailer of baby products in place of small specialty stores. However, BRU soon began facing tough price competition from internet retailers which offered huge discounts that other retailers could not match. To respond to this competition, XXX demanded that the manufacturers stop internet retailers from discounting their products by adopting RPM and banning internet-only retailing. Considering that BRU dominated this market, the plaintiffs alleged that the baby-product manufacturers were substantially forced to acquiesce to the BRU’s demand.126） In terms of antitrust violation, the United States District Court for the Eastern District of Pennsylvania reviewed the case based on Leegin, which announced that vertical price restraints should be analyzed under the rule of reason because they could benefit interbrand competition. The Leegin Court mentioned certain factors that should be considered under the rule of reason for potential anticompetitive consequences of RPM while discussing three situations127） where RPM could benefit interbrand competition. One of the factors was the source of the restraints. In Leegin, the Supreme Court stated that if there was evidence retailers were the impetus for vertical restraint, there was a greater likelihood that the restraint would support a dominant, inefficient retailer.128）The Supreme Court also suggested that courts Mar. 2012 THE END OF THE LEEGIN SAGA AND THE BEGINNING OF DEVELOPMENT FOR THE RULE OF REASON IN RPM CASES consider whether the restraint-instigator had market power,...
