PREDATION TO COERCE COMPETITORS' ACCEPTANCE OF PREDATOR'S PRICE LEADERSHIP: THE SUPERMARKET MODEL

Judge Larry McKinney of the US District Court, Southern District of Indiana, granted a summary judgment to the defendants in the antitrust case of Indiana Grocery Co. Inc. and Preston-Safeway Inc. versus Super Valu Stores Inc., dba Cub Foods, and Markkay of Indiana Inc., dba Cub Foods, and The Kroger Co. The summary judgment was upheld by the 7th Circuit Court of Appeals in Chicago. This opinion affirmed the summary dismissal on the principal ground that the predator, Kroger, with a post-predation share of only 35% and as a food distributor rather than manufacturer, lacked the power to starve Indianapolis and hence lacked the essential legal ingredient in such a case, "market power." It was an economically senseless decision that is being regularly cited as a precedent in other cases involving the same important issues of market power, predation, oligopoly-duopoly, and collusion. The summary of the plaintiffs' case is presented.