USA Petroleum Company v. Atlantic Richfield Company

REINHARDT, Circuit Judge:

USA Petroleum Company (USA) sued Atlantic Richfield Company (ARCO) for violations of the Sherman Act, the Robinson-Patman Act, the Cartwright Act, and various state laws. USA subsequently voluntarily withdrew with prejudice its claim under section 2 of the Sherman Act. ARCO *689moved for summary judgment on USA’s claim under section 1 of the Sherman Act, 15 U.S.C. § 1, and the district court granted its motion. The court entered judgment for ARCO under Fed.R.Civ.P. 54(b), and USA timely appealed. We reverse.

I.

ARCO is an integrated oil company which, among other things, markets gasoline in the western United States. It sells gasoline to consumers both directly and indirectly through ARCO-brand dealers. USA is an independent marketer of gasoline, which it sells at retail under the brand name USA. USA competes directly with ARCO dealers at the retail level.

USA alleges that ARCO conspired with retail service station dealers selling ARCO-brand gasoline to fix retail prices at below-market levels. USA alleges that “ARCO’s strategy was to eliminate the independents by fixing and subsidizing below-market prices and siphoning off the independents’ volumes and profits,” and that it succeeded in that strategy. According to USA, many independents have been driven out of business. ARCO’s subsidies consisted of temporary volume allowances, temporary competitive allowances, and other price allowances extended to its distributors and dealers.

For the purpose of reviewing the district court’s summary judgment order, we must assume these allegations to be correct. See Baker v. Department of Navy, 814 F.2d 1381, 1382 (9th Cir.1987).

The district court ruled that “[e]ven assuming that [USA] can establish a vertical conspiracy to maintain low prices, [it] cannot satisfy the ‘antitrust injury’ requirement of Clayton Act § 4, without showing such prices to be predatory. Under the circumstances here concerned ... no such showing can be made.” We disagree.

II.

The question on appeal is whether in the absence of proof of predatory pricing a competitor can recover damages because of a maximum resale price maintenance agreement. Specifically, we must decide whether a competitor’s injuries resulting from vertical, non-predatory, maximum price fixing fall within the category of “antitrust injury”. This is a difficult question, and one of first impression in this circuit. The Supreme Court has not spoken on this issue, and among the circuit courts only the Seventh Circuit has taken a position. See Jack Walters & Sons Corp. v. Morton Building, Inc., 737 F.2d 698 (7th Cir.1984), discussed below. The question requires us to look closely at the purposes and policies underlying the antitrust laws, and to determine which application of the doctrine of “antitrust injury” best implements those purposes and policies.

The concept of “antitrust injury” was put forward in Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489, 97 S.Ct. 690, 697, 50 L.Ed.2d 701 (1977):

We therefore hold that for plaintiffs to recover treble damages ... they must prove more than injury causally linked to an illegal presence in the market. Plaintiffs must prove antitrust injury, which is to say injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendants’ acts unlawful.

In Brunswick, the plaintiffs argued that an illegal merger had kept alive failing competitors. The claim was that a violation of the antitrust laws had prevented the plaintiffs from obtaining monopoly profits. The Supreme Court’s decision was not surprising: a plaintiff should not be able to claim damages for being unable to gain a monopoly position, the type of advantage the antitrust laws were meant to prevent. See id. at 487-88, 97 S.Ct. at 697. The Court held that when the injury claimed “was not of ‘the type that the statute was intended to forestall,’ ” damages under section 4 of the Clayton Act would not be available. Id. (quoting Wyandotte Co. v. United States, 389 U.S. 191, 202, 88 S.Ct. 379, 386, 19 L.Ed.2d 407 (1967)).1 See Or*690ion Pictures Distribution Corp. v. Syufy Enters., 829 F.2d 946, 948-49 (9th Cir.1987) (no antitrust injury where the injury claimed was caused by a breach of contract, not by the alleged antitrust violation).

III.

To determine whether the injury USA alleges is of the type the antitrust laws were meant to prevent, we must look first to the Supreme Court’s discussions of price fixing under the antitrust laws.

In United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 60 S.Ct. 811, 84 L.Ed. 1129 (1940), a case involving horizontal price fixing, the Supreme Court held that price-fixing agreements were per se illegal. The Court responded as follows to the argument that the fixing of prices should be legal if the prices fixed were reasonable:

The reasonableness of prices has no constancy due to the dynamic quality of business facts underlying price structures. Those who fixed reasonable prices today would perpetuate unreasonable prices tomorrow, since those prices would not be subject to continuous administrative supervision and readjustment in light of changed conditions. Those who controlled the prices would control or effectively dominate the market. And those who were in that strategic position would have it in their power to destroy or drastically impair the competitive system. But the thrust of the rule is deeper and reaches more than monopoly power. Any combination which tampers with price structures is engaged in an unlawful activity. Even though the members of the price-fixing group were in no position to control the market, to the extent that they raised, lowered, or stabilized prices they would be directly interfering with the free play of market forces. The Act places all such schemes beyond the pale and protects that vital part of our economy against any degree of interference. Congress has not left with us the determination of whether or not particular price-fixing schemes are wise or unwise, healthy or destructive.

Id. at 221, 60 S.Ct. at 843. To the argument that the prices had been fixed in such a way as to stabilize the market, the Court stated:

[I]n terms of market operations stabilization is but one form of manipulation. And market manipulation in its various manifestations is implicitly an artificial stimulus applied to (or at times a brake on) market prices, a force which distorts those prices, a factor which prevents the determination of those prices by free competition alone.
Under the Sherman Act a combination formed for the purpose and with the effect of raising, depressing, fixing, pegging, or stabilizing the price of a commodity in interstate or foreign commerce is illegal per se.
Price-fixing agreements may or may not be aimed at complete elimination of price competition. The group making those agreements may or may not have power to control the market_ Whatever economic justification particular price-fixing agreements may be thought to have, the law does not permit an inquiry into their reasonableness. They are all banned because of their actual or poten*691tial threat to the central nervous system of the economy.

Id. at 223, 225-26 n. 59, 60 S.Ct. at 844, 845-46 n. 59.

The Supreme Court in a later case thought it evident that the rule that price fixing was per se illegal extended to the fixing of maximum prices.

The Court of Appeals erred in holding that an agreement among competitors to fix maximum resale prices of their products does not violate the Sherman Act. For such agreements, no less than those to fix minimum prices, cripple the freedom of traders and thereby restrain their ability to sell in accordance with their own judgment. We reaffirm what we said in United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 223 [60 S.Ct. 811, 844]: “Under the Sherman Act a combination formed for the purpose and with the effect of raising, depressing, fixing, pegging, or stabilizing the price of a commodity in interstate or foreign commerce is illegal per se.”

Kiefer-Stewart Co. v. Joseph E. Seagram & Sons, Inc., 340 U.S. 211, 213, 71 S.Ct. 259, 260, 95 L.Ed. 219 (1951).

Kiefer-Stewart involved both a vertical maximum price fixing (maximum resale price maintenance) agreement and a horizontal agreement among competitors to impose that price restraint. Id. at 212, 71 S.Ct. at 260. When the issue of vertical maximum price-fixing was more directly raised, the Supreme Court affirmed that that form of market manipulation was covered by the per se rule against price fixing.

We thmk Kiefer-Stewart was correctly decided and we adhere to it. Maximum and minimum price fixing may have different consequences in many situations. But schemes to fix maximum prices, by substituting the perhaps erroneous judgment of a seller for the forces of the competitive market, may severely intrude upon the ability of buyers to compete and survive in that market. Competition, even in a single product, is not cast in a single mold. Maximum prices may be fixed too low for the dealer to furnish services essential to the value which goods have for the consumer or to furnish services and conveniences which consumers desire and for which they are willing to pay. Maximum price fixing may channel distribution through a few large or specifically advantaged dealers who otherwise would be subject to significant nonprice competition. Moreover, if the actual price charged under a maximum price scheme is nearly always the fixed maximum price, which is increasingly likely as the maximum price approaches the actual cost of the dealer, the scheme tends to acquire all the attributes of an arrangement fixing minimum prices. It is our view, therefore, that the combination formed by the respondent in this case to force petitioner to maintain a specified price for the resale of the newspapers which he had purchased from respondent constituted, without more, an illegal restraint of trade under § 1 of the Sherman Act.

Albrecht v. Herald Co., 390 U.S. 145, 152-53, 88 S.Ct. 869, 873, 19 L.Ed.2d 998 (1968) (footnote omitted).2

*692In Arizona v. Maricopa County Medical Society, 457 U.S. 832, 102 S.Ct. 2466, 73 L.Ed.2d 48 (1982), the Court refused to withdraw maximum price fixing from the per se rule.

Our decisions foreclose the argument that the agreements at issue escape per se condemnation because they are horizontal and fix maximum prices. Kiefer-Stewart and Albrecht place horizontal agreements to fix maximum prices on the same legal — even if not economic— footing as agreements to fix minimum or uniform prices. The per se rule “is grounded on faith in price competition as a market force [and not] on a policy of low selling prices at the price of eliminating competition.”

Id. at 348, 102 S.Ct. at 2475 (brackets in Maricopa County) (quoting Rahl, “Price Competition and the Price Fixing Rule—Preface and Perspective”, 57 Nw.UL.Rev. 137, 142 (1962)) (footnote omitted). It is clear that maximum resale price maintenance remains per se illegal.3

III.

We also look to the legislative history of the antitrust laws for guidance. Professor Eleanor Fox has summarized the findings of historians as follows:

As history teaches, “efficiency” is not the reason for antitrust. Indeed, those who valued efficiency more than competition opposed antitrust bills on grounds that they would constrain some activity that might save costs for a producer and forbid some activity that does not interfere with optimal allocation of resources. Rather than standing for efficiency, the American antitrust laws stand against private power. Distrust of power is the one central and common ground that over time has unified support for antitrust statutes. Interest of consumers have been a recurrent concern because consumers have been perceived as victims of the abuse of too much power. Interests of entrepreneurs and small business have been a recurrent concern because independent entrepreneurs have been seen as the heart and lifeblood of American free enterprise, and freedom of economic activity and opportunity has been thought central to the preservation of the American free enterprise system.
One overarching idea has unified these three concerns (distrust of power, concern for consumers, and commitment to opportunity of entrepreneurs): competition as process. The competition process is the preferred governor of markets. If the impersonal forces of competition, rather than public or private power, determine market behavior and outcomes, power is by definition dispersed, opportunities and incentives for firms without market power are increased, and the results are acceptable and fair.

Fox, “The Modernization of Antitrust: A New Equilibrium”, 66 Cornell L.Rev. 1140, 1152-54 (1981) (footnotes omitted); see R. Hofstadter, “What Happened to the Antitrust Movement?”, in The Paranoid Style in American Politics and Other Essays 188, 199-200 (1965).

Price-fixing of any kind distorts in a basic way the competitive process the antitrust laws were meant to protect. Two prominent commentators have described vertical price fixing as follows:

*693[Successfully maintained vertical price fixing is often the expression of economic power based on market imperfections, imbalances in bargaining power, or the presence of some level of oligopoly-like power due to trademarks or product differentiation. As such, vertical price fixing directly interferes with the freedom and opportunity of retail competitors to compete on the merits and usually results in higher prices to consumers. It enables the proponent of a restraint to assert an absolute property right and to suppress distributor competition on price, denying the right of independent distributors to succeed or fail on the competitive merits.

Flynn & Ponsoldt, “Legal Reasoning and the Jurisprudence of Vertical Restraints: The Limitations of Neoclassical Economic Analysis in the Resolution of Antitrust Disputes”, 62 N.Y.U.L.Rev. 1125, 1148 (1987).

The Supreme Court cases echo the historians’ conclusions regarding the objectives of the antitrust laws. The Court states that the rules against price fixing have a number of objectives, including the protection of the competitive process. Congress intended that market forces alone determine what goods and services are offered, at what price these goods and services are sold, and whether particular sellers succeed or fail. See, e.g., Socony, 310 U.S. at 221, 223, 225-26 n. 59, 60 S.Ct. at 843, 844, 846 n. 59; Kiefer-Stewart, 340 U.S. at 213, 71 S.Ct. at 260-61 (price fixing conspiracies “cripple the freedom of traders and thereby restrain their ability to sell in accordance with their own judgment”); Albrecht, 390 U.S. at 152-53, 88 S.Ct. at 873 (price fixing conspiracies “severely intrude upon the ability of buyers to compete and survive in [the] market”); Maricopa County, 457 U.S. at 348,102 S.Ct. at 2475 (“The per se rule 'is grounded on faith in price competition as a market force [and not] on a policy of low selling prices at the price of eliminating competition.’ ”) (quoting Rahl, “Price Competition and the Price Fixing Rule—Preface and Perspective”, 57 Nw. U L.Rev. 137, 142 (1962)). When sellers conspire to fix prices, the market mechanism is distorted: prices may be driven higher,4 some goods and services may not be offered, and sellers may succeed or fail for reasons other than their ability to respond to the demands of the market. Rules against price-fixing are thus meant to prevent harm to both consumers and to sellers.

The “antitrust injury” standard requires us to determine whether the plaintiff’s injuries resulted from a disruption of competition in the plaintiff’s market caused by the defendant’s antitrust violation. See generally Note, “Antitrust Standing, Antitrust Injury, and the Per Se Standard”, 93 Yale L.J. 1309 (1984). In the present case the inquiry seems straightforward: USA’s claimed injuries were the direct result, and, indeed, under the allegations we accept as true, the intended objective, of ARCO’s price-fixing scheme. According to USA, the purpose of ARCO’s price-fixing is to disrupt the market of retail gasoline sales, and that disruption is the source of USA’s injuries.

ARCO argues that USA, as ARCO’s competitor, cannot claim an antitrust injury, because injury to competitors is not the type of injury that the rule against maximum resale price maintenance was meant to prevent—at least in cases where predatory pricing is not alleged.5 ARCO’s argument misconceives the Supreme Court’s analysis. The Supreme Court has not dis*694cussed maximum resale price maintenance as a separate type of antitrust violation, but only as one form of price fixing. See Arizona v. Maricopa County Medical Society, 457 U.S. at 348, 102 S.Ct. at 2475; Albrecht v. Herald Co., 390 U.S. at 152-53, 88 S.Ct. at 873. Thus, the proper question is not what type of injuries a rule against maximum resale price maintenance was meant to prevent, but what kind of injuries rules against price fixing were meant to prevent. The Supreme Court has indicated that the per se rule against price-fixing is aimed at the long-term as well as the short-term effects such practices have in the market, and not merely the immediate consequences for prices. See Business Elecs. Corp. v. Sharp Elecs. Corp., — U.S. -, 108 S.Ct. 1515, 1519-20, 99 L.Ed.2d 808 (1988) (characterizing interbrand competition as the primary concern of antitrust law, and listing “the creation and maintenance of small businesses” as one of its objectives). The removal of some elements of price competition distorts the markets, and harms all the participants: those retailers which have lost their ability to set prices, the other retailers in the same market who are harmed by the distorted market, and the consumers. Even if we were to analyze the question at the more specific level of maximum resale price fixing, given the long-term consequences of that practice we would reach the same result for similar reasons.

ARCO relies in part on Cargill, Inc. v. Montfort of Colorado, Inc., 479 U.S. 104, 107 S.Ct. 484, 93 L.Ed.2d 427 (1986). That reliance is misplaced. In Cargill, plaintiff, a large beef-packing firm, sought injunctive relief to enjoin the merger of the second and third largest beef-packing firms in the industry. The plaintiff asserted that the defendant would be able to lower its prices due to “multiplant efficiencies”. Id. 107 S.Ct. at 491. This would require plaintiff in turn to lower its prices, thus lowering its profits. Id. at 492. The Supreme Court held that this injury did not constitute “antitrust injury”; the Court relied in part on the fact that plaintiff had not shown that the defendant had engaged or would engage in unlawful or predatory pricing. Id. at 492-94. In other words, in Cargill the plaintiff failed to show that the pricing practices that it claimed was causing or would cause its injuries were illegal.6 In fact, the Court termed the defendant’s pricing policies “vigorous competition” and said that the antitrust laws protect small businesses “only against the loss of profits from practices forbidden by [those] laws.” Id. at 492. In the present case, plaintiff’s injuries result directly from pricing practices that defendants admit (for the purpose of this appeal) are forbidden by the antitrust laws and are therefore illegal.7

In Cargill, as in Brunswick, the connection between the antitrust violation and the activity which caused the alleged injury is *695attenuated or indirect. In those cases, the violation was a merger or an acquisition, and the injury occurred because of pricing practices which were themselves legal.8 As the Court held, injuries derived from legal pricing practices are not necessarily the type of injuries rules against certain types of mergers and acquisitions were meant to prevent. See Cargill, 107 S.Ct. at 492-93; Brunswick, 429 U.S. at 486-88, 97 S.Ct. at 696-97.

IV.

ARCO claims that USA does not have standing under the “antitrust injury” standard because maximum resale price maintenance increases rather than decreases competition.9 Maximum resale price maintenance brings prices lower, not higher. If competitors fail, it is because they are not able to match the low prices charged by the maximum resale price maintenance retailers. • This is a typical cost of competition, according to ARCO, and not a problem for antitrust policy. ARCO relies heavily on the argument that the antitrust laws were enacted for “the protection of competition, not competitors.” Brown Shoe Co. v. United States, 370 U.S. 294, 320, 82 S.Ct. 1502, 1521, 8 L.Ed.2d 510 (1962). However, we have earlier discussed the problems with misreading that aphorism:

*696The purpose of drawing a distinction between harm to competition and harm to competitors is to point out that not all acts that harm competitors harm competition. However, the converse is not true. Injury to competition necessarily entails injury to at least some competitors. Competition does not exist in a vacuum; it consists of rivalry among competitors. Clearly, injury to competitors may be probative of harm to competition, although the weight to be attached to such evidence depends on its nature and on the nature of the challenged conduct. The aphorism may not be invoked blindly in response to a showing that competitors have been harmed; otherwise it would often serve to shield unlawful conduct that adversely affects competition.

Hasbrouck v. Texaco, Inc., 842 F.2d 1034, 1040 (9th Cir.1988).10

We reject ARCO’s characterization that USA’s injury resulted from “increased, not reduced ... competition,” as contrary to the antitrust laws. As in the terms of the Robinson-Patman Act, 15 U.S. C. § 13(a), the success of some firms and the failure of other firms, when due to illegal pricing practices, must be characterized as a “lessen[ing] [of] competition”, not an increase in competition. Also, when firms conspire to fix low prices in order to drive out competition, the long-term consequences may be higher prices and reduced service to consumers. Cf. Albrecht, 390 U.S. at 152-53, 88 S.Ct. at 873: SoconyVacuum, 310 U.S. at 221, 71 S.Ct. at 268-69.

We note that commentators with a particular economic viewpoint have argued that maximum resale price maintenance should not be a per se violation of the antitrust laws.11 However, we cannot ignore the fact that maximum resale price maintenance is per se illegal, simply because some might think that rule is unwise or because of commentators’ speculation that the rule’s demise might be in sight. See Northwest Publications, Inc. v. Crumb, 752 F.2d 473, 475 (9th Cir.1985); cf. Jack Walters & Sons Corp. v. Morton Building, Inc., 737 F.2d 698, 707, 709 (7th Cir.1984). The Supreme Court has clearly stated — and restated — that maximum resale price maintenance, as a form of price fixing, is per se illegal, and that rule binds us until the Court or Congress12 clearly states otherwise. USA alleges that ARCO’s price-fixing had the objective of forcing independent gasoline retailers from the market, and that ARCO had been largely successful in that objective. In its complaint, USA states that “more than a dozen large independents have sold out, liquidated or drastically curtailed their operations, and many independent retail stations have been closed.” It also states that the barriers to entry into the retail gasoline market have been heightened so that “once an independent is eliminated, it is highly unlikely that it will be replaced.” The objective and effect of ARCO’s illegal pricing scheme has been to reduce the number of independent gasoline retailers, in other words, to reduce competition. USA complains that it has suffered financial losses and is being driven out of the market by ARCO’s illegal price-fixing. This is the type of injury that the antitrust rules were meant to prevent.

Finally, we consider the Seventh Circuit’s treatment of the issue. In Jack Walters & Sons Corp. v. Morton Building, Inc., 737 F.2d 698 (7th Cir.1984), Wal*697ters, a building-materials dealer, was a distributor of goods produced by Morton, a manufacturer of prefabricated farm buildings. Walters claimed, among other things, that Morton had coerced its dealers, including Walters, to maintain a conspiracy to maintain maximum resale prices. Id. at 706. The district court dismissed Walters’ claims, and the Seventh Circuit affirmed. Regarding the maximum resale price maintenance, Judge Posner, writing for the court, concluded that Walters had not shown antitrust injury:

In the present case, even if Morton did violate the prohibition against fixing its dealers’ prices, the only harm to Walters came from the fact that competing dealers (or Morton itself) would lower their prices to consumers if Walters did not. There is no suggestion that the lower prices would have been below cost; they would have been lawful prices_ Walters will not be heard to complain about having to meet lawful price competition, which antitrust law seeks to encourage, merely because the competition may have been enabled by an antitrust injury.

Id. at 709.

We disagree.13 The antitrust laws were, as we discussed earlier, intended to give entrepreneurs and independent distributors an “even playing field.” The competitive process can only rule when participants in the process are not allowed to combine to fix prices ahead of time.14 We conclude that the purposes and policies of the antitrust laws are best effectuated by recognizing the “standing” of competitors to enforce the antitrust laws against price-fixing conspiracies. To put the same point differently, we conclude that the injury done to the market and to competitors by price-fixing conspiracies is antitrust injury — the type of injury the antitrust laws were meant to prevent.15

For the reasons stated above, we reverse the decision of the district court and remand the case for further proceedings consistent with this opinion.

REVERSED AND REMANDED.

. One commentator summarized the holding of Brunswick as follows:

Even if the plaintiff can show an antitrust violation, courts should allow treble damages *690only for injuries reflecting a disruption of competition in the plaintiffs market. From this perspective, Brunswick was an easy case. The plaintiffs may well have shown a violation of § 7 — the mere possibility that a large firm active in many markets will cut prices or use other monopolization tactics in a new market is enough to show a § 7 violation— but they failed to show that their losses stemmed from the realization of this possibility. The defendant had merely kept afloat businesses that otherwise would have failed. It had not affected prices in any way. The "lost profits" the plaintiffs complained of were the result of the very situation that the antitrust laws are supposed to encourage— free competition among as many firms as a market can support.

Note, "Antitrust Standing, Antitrust Injury, and the Per Se Standard”, 93 Yale L.J. 1309, 1320 & n. 58 (1984).

. The establishment of a per se rule against maximum vertical price fixing is more than merely a recognition that the anticompetitive effects of the practice outweigh the procompeti-tive effects. Dissent at 699 n. 1. Rather, it is a recognition that "such [procompetitive] cases are not sufficiently common or important enough to justify the time and expense necessary to identify them.” Continental T.V., Inc. v. GTE Sylvania, Inc., 433 U.S. 36, 97 S.Ct. 2549, 2557 n. 16, 53 L.Ed.2d 568 (1977). Indeed, “per se rules are appropriate only for conduct that is manifestly anticompetitive, that is conduct that would always or almost always tend to restrict competition and decrease output.” Business Elecs. Corp. v. Sharp Elecs. Corp., — U.S. -, 108 S.Ct. 1515, 1519, 99 L.Ed.2d 808 (1988) (internal quotes and citations omitted).

With this in mind, the dissent’s flat assertion, based on Professor (now Judge) Easterbrook’s neo-classical economic views, that ”[m]aximum vertical price fixing lacks the potential anticom-petitive effects that maximum horizontal price fixing has, and in contrast has the potential for creating a competitive benefit” is simply irrelevant. Dissent at 700-01 (citing Easterbrook, Maximum Price Fixing, 48 U.Chi.L.Rev. 886, 890 n. 20 (1981)). To the extent that the Supreme Court's view of this issue differs from Judge Easterbrook’s, we are required to apply the former.

. Recently, in Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 104 S.Ct. 1464, 79 L.Ed.2d 775 (1984), the Solicitor General and a number of other amici asked the Supreme Court to reconsider the inclusion of resale price maintenance within the per se rule. The Court declined to do so. Id. at 761-62 n. 7, 104 S.Ct. at 1469-70 n. 7; see Business Elecs. Corp. v. Sharp Elecs. Corp., — U.S. -, 108 S.Ct. 1515, 1519, 99 L.Ed.2d 808 (1988) (reaffirming the per se illegality of vertical price agreements).

Although the dissent disclaims taking any position on whether maximum vertical price fixing should any longer be per se illegal, dissent at 9 n. 5, it is almost impossible to read the opinion's lengthy discourse on the benefits of this practice as saying anything else. It claims that ARCO’s competitors are not harmed by its conduct, and that its consumers will only benefit. Yet, as discussed in Part III of this opinion, the Supreme Court has established per se rules against certain conduct only “for conduct that is manifestly anti-competitive, that is conduct that would always or almost always tend to restrict competition...." Business Elees. Corp., 108 S.Ct. at 1519 (internal quotes and citations omitted).

. The dissent’s contention that maximum vertical price fixing is "less destructive than minimum price fixing because it generally results in lower prices to consumers," Dissent at 700-701, is questionable at best, but in any event simply irrelevant. Both violations are classified as per se because the resulting harm to competition is extremely serious. Moreover, the Ninth Circuit case the dissent cites for its proposition, Northwest Publications Inc. v. Crumb, 752 F.2d 473, 475 (9th Cir.1985), simply does not say what the dissent says it does. Although we did note that these restraints "arguably benefit consumers," id. (emphasis added), we also enumerated some of the reasons, as we do above, why the Supreme Court still holds that "maximum price-fixing is as pernicious as minimum price-fixing.” Id. We discuss below our views of the other case the dissent cites, Jack Walters & Sons Corp. v. Morton Building, Inc., 737 F.2d 698 (7th Cir.), cert. denied, 469 U.S. 1018, 105 S.Ct. 432, 83 L.Ed.2d 359 (1984).

. In essence, this is also the position the dissent takes. “Maximum vertical price fixing is destructive when the prices set are predatory.” *694Dissent at 701 (citing Matsushita Electric Industrial Co. v. Zenith Radio Corporation, 475 U.S. 574, 584, 106 S.Ct. 1348, 1354-55. However, the Court in Matsushita did not comment on whether maximum vertical price maintenance is destructive in the absence of predatory pricing. That issue was simply not before the Court or considered by it.

The dissent’s position would preclude a finding of a violation of the antitrust laws in the case of the vast majority of unlawful maximum resale price agreements — i.e., those not accompanied by predatory conduct. No one, except an unenthusiastic Department of Justice and, under certain circumstances, the dealers who are parties to the resale price maintenance agreement, would have standing to bring suit to challenge conduct which undeniably is forbidden by the antitrust laws. This would virtually amount to a finding that Brunswick has, sub silentio, overruled Albrecht, Kiefer-Stewart, and Maricopa County, P. Areeda & H. Hovencamp, Antitrust Law ¶ 335.2(i), at 277 n. 56 (1987 Supplement).

. For a single firm’s pricing practices to violate the antitrust laws, that firm must be engaged in predatory pricing or discriminatory pricing (the Robinson Patman Act, 15 U.S.C. § 13(a)). However, much less need be shown to assert that the pricing practices of two or more firms have violated the antitrust laws: it need only be shown that those firms have conspired to fix prices. See generally H. Hovenkamp, Economics and Federal Antitrust Law 92-124, 159-61, 172-73, 258-65 (1985). Here, a price-fixing agreement between ARCO and its dealers is alleged.

. There is another reason why Cargill is not dispositive. The law against monopoly involved in Cargill, section 7 of the Clayton Act, attempts to prevent market structures in which the competitive process is vulnerable to distortion. The *695distortion is only potential. In price-fixing cases, by contrast, the distortion of the price-fixing cases, by contrast, the distortion of the price mechanism has, by definition, already occurred.

. This characterization applies equally well to Alberta Gas Chemicals, Ltd. v. E.I. Du Pont De Nemours & Co., 826 F.2d 1235 (3rd Cir.1987), cert. denied, — U.S. -, 108 S.Ct. 2830, 100 L.Ed.2d 930 (1988). In Alberta Gas, plaintiff claimed that defendant's acquisition of a company caused the acquired company to cancel a project. Because the project was canceled, the acquired company bought less of plaintiff’s product. The court found that the plaintiff had not shown antitrust injury. This, too, is an unsurprising finding: the connection between violation and injury is too attenuated for the plaintiff to claim, without more, that the injury involved is of the type the particular antitrust rule was meant to prevent.

. ARCO relies on Murphy Tugboat Co. v. Crowley, 658 F.2d 1256 (9th Cir.1981), heavily, and the dissent does so equivocally, recognizing that the case is not controlling. In fact, Murphy Tugboat is wholly inapplicable. In Murphy Tugboat, one tugboat company complained of the low fees charged by another tugboat company for the services of its licensed inland pilots. These lower fees were the result of a labor agreement entered into between the inland pilots and one of the defendants. Because the plaintiff was not a competitor in the area covered by the labor agreement, the legality of that agreement was irrelevant to our principal inquiry. In any event, we ultimately held that the agreement was valid. Id. at 1259. As a result, the plaintiffs claim depended entirely on whether the defendants’ "overall pricing policies constitute[d] anticompetitive conduct." Id. at 1259. With the labor agreement, and thus the price-fixing allegation removed from the case, an antitrust violation could only be demonstrated by proof of a predatory pricing scheme. This is in stark contrast to the present case, in which the defendant’s unlawful price-fixing is (for the purpose of the summary judgment motion) conceded and thus an antitrust violation is established without any need to show predatory pricing.

As the dissent points out, we did state in Murphy Tugboat that "[the antitrust laws] do not prohibit non-predatory conduct that results in a lower price to the consumer." Dissent at 702. However, the dissent ignores the crucial fact that, in Murphy Tugboat, predatory pricing was a necessary element because, in the absence of such conduct, there was no violation of the antitrust laws. (It also fails to mention that Murphy Tugboat was not a maximum resale price case and did not purport to discuss the role of predatory conduct in such cases.) It was in connection with our discussion of whether a violation had occurred that we made the statement that the dissent now lifts wholly out of context — the statement that the antitrust laws do not protect inefficient businessmen against others who establish lower prices but do not engage in predatory conduct. Here, however, we are not seeking to determine whether a violation of the antitrust laws occurred. For our purposes, there is a conceded violation of those laws; specifically, it is agreed that a violation occurred in the absence of predatory pricing. The only question here is whether there is a cognizable injury.

In short, Murphy Tugboat deals solely with the issue of when a plaintiff who is not the defendant's competitor in the area in question may claim that an antitrust violation has occurred. The question of when a plaintiff who is a competitor can prove “antitrust injury” is the basic issue in the present case. Indeed, it is worth noting that the Seventh Circuit did not consider Murphy Tugboat sufficiently on point to mention it when it considered the same question now before this court — whether competitors have antitrust injury standing in maximum resale price cases. Jack Walters & Sons Corp. v. Morton Building, Inc., 737 F.2d 698 (7th Cir.1984).

.See Flynn & Ponsoldt, supra, at 1126 n. 4 (citation omitted):

One of the more popular cliches is that the antitrust laws protect competition, not competitors. The cliche implicitly asserts that one can have competition without competitors, contains no definition of "competition,” and is frequently used to deny the congressionally defined goals of antitrust policy in favor of the narrow goals assumed by the neoclassical model.

. See, e.g., Blair & Fesmire, "Maximum Price Fixing and the Goals of Antitrust”, 37 Syracuse L.Rev. 43 (1986); H. Hovenkamp, Economics and Federal Antitrust Law 247-72 (1985); Easterbrook, "Maximum Price Fixing”, 48 U.ChLL. Rev. 886 (1981); R. Bork, The Antitrust Paradox 280-98 (1978).

. See Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 769, 104 S.Ct. 1464, 1473, 79 L.Ed.2d 775 (1984) (Brennan, J., concurring).

. As one commentator has noted:

Even consumers would not be able to bring actions under the rule established in Judge Posner’s opinion in Jack Walters & Sons Corp. v. Morton Building....
... I cannot escape the conclusion that Judge Posner — growing impatient with Congress’s or the Supreme Court’s refusal to overrule Albrecht — has decided to undertake that task on his own.
Members of the Chicago School have visions, as do most of us, of the kinds of things that should obtain in a perfect world. The per se rule against resale price maintenance is definitely not among them. That fact justifies arguments, both theoretical and political. But it does not justify taking the matter into one’s own hands, no matter how certain we may be that we are right.

Hovenkamp, “Chicago and Its Alternatives", 1986 Duke L.J. 1014, 1025-26 (footnote omitted).

. Cf. Flynn & Ponsoldt, supra, at 1149:

[A conspiracy to fix prices] is a direct displacement of the competitive process of price determination. It is an assumption of power by the proponent of the restraint, denying rights of distributors and consumers to make their own judgments about pricing — a denial of rights guaranteed by the goals of antitrust policy. Congress did not leave to the proponents of such restraints the authority to determine unilaterally the scope of the contract rights of distributors. Similarly, Congress did not intend the proponents of maximum price fixing to determine what the best price should be for the benefit of the public.

.We recognize that our decision conflicts with that of the Seventh Circuit. In U.S. v. Larm, 824 F.2d 780, 784 (9th Cir.1987), we said “absent some good reason to do so, we are disinclined to create a direct conflict with another circuit.” We did not intend by that statement to surrender our authority to decide important issues of first impression or to suggest that we would adopt the view of the first circuit to consider such issues in every instance. Rather, we meant that we would give respectful attention to the views of the other circuit and carefully evaluate that circuit’s analysis before settling on ours. Here we have done so and we find good reason to disagree with the result reached by Judge Posner.