`
`UNITED STATES DISTRICT COURT
`MIDDLE DISTRICT OF TENNESSEE
`NASHVILLE DIVISION
`
`
`IN RE: REALPAGE, RENTAL
`SOFTWARE ANTITRUST LITIGATION
`(NO. II)
`
`Case No. 3:23-MD-3071
`
`This Document Relates to:
`ALL CASES
`
`Chief Judge Waverly D. Crenshaw, Jr.
`
`
`
`MEMORANDUM OF LAW IN SUPPORT OF THE
`STATEMENT OF INTEREST OF THE UNITED STATES
`
`HENRY C. LEVENTIS
`United States Attorney
`
`MICHAEL C. TACKEFF, B.P.R. #036953
`Assistant United States Attorney
`
`Middle District of Tennessee
`719 Church Street, Suite 3300
`Nashville, TN 37203
`Telephone: (615) 736-5151
`Email: michael.tackeff@usdoj.gov
`
`
`JONATHAN S. KANTER
`Assistant Attorney General
`DOHA G. MEKKI
`Principal Deputy Assistant Attorney General
`MAGGIE GOODLANDER
`Deputy Assistant Attorney General
`ANDREW J. FORMAN
`Deputy Assistant Attorney General
`DAVID B. LAWRENCE
`Policy Director
`JACOBUS VAN DER VEN
`Counsel to the Assistant Attorney General
`
`DANIEL E. HAAR
`NICKOLAI G. LEVIN
`STRATTON C. STRAND
`YIXI (CECILIA) CHENG
`Attorneys
`U.S. Department of Justice
`Antitrust Division
`950 Pennsylvania Ave NW, #3224
`Washington, DC 20530
`Telephone: 202-705-8342
`Email: yixi.cheng@usdoj.gov
`
`Counsel for the United States of America
`
`
`
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`Case 3:23-cv-00979 Document 110 Filed 11/15/23 Page 1 of 33 PageID #: 463
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`Table of Contents
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`Page
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`TABLE OF AUTHORITIES ....................................................................................................... ii
`BACKGROUND ............................................................................................................................1
`ARGUMENT ..................................................................................................................................4
`I. There Are Many Types of Concerted Action and Many Ways of Proving It ..............5
`A. Concerted Action Includes Any Type of Conduct That Joins
`Together Separate Decisionmakers and Thus Deprives the Marketplace of
`Independent Centers of Decisionmaking .......................................................................5
`B. Concerted Action Can Be Shown In Many Ways, Including An Invitation
`Followed By Conduct Showing Acceptance .................................................................8
`C. The Complaints Allege Concerted Action ...................................................................12
`II. The Per Se Rule Prohibiting Price Fixing Applies to Price Fixing
`Using Algorithms .............................................................................................................15
`A. Using an Algorithm to Fix Prices Among Actual or Potential Competitors Is
`Per Se Unlawful ...........................................................................................................15
`B. The Per Se Rule Applies to the Allegations in this Case .............................................18
`CONCLUSION ............................................................................................................................23
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`Table of Authorities
`
`
`
`Page(s)
`
`Cases
`
`American Column & Lumber Co. v. United States,
`257 U.S. 377 (1921) .................................................................................................................. 21
`
`American Needle, Inc. v. NFL,
`560 U.S. 183 (2010) ................................................................................ 1, 4, 5, 8, 12, 14, 15, 18
`
`American Tobacco Co. v. United States,
`328 U.S. 781 (1946) .................................................................................................................... 6
`
`Anderson v. Shipowners’ of Pac. Coast,
`272 U.S. 359 (1926) .................................................................................................................... 6
`
`Arizona v. Maricopa County Medical Society,
`457 U.S. 332 (1982) ...................................................................................................... 16, 17, 23
`
`Bell Atlantic Corp. v. Twombly,
`550 U.S. 544 (2007) ........................................................................................................ 6, 12, 21
`
`Bourjaily v. United States,
`483 U.S. 171 (1987) .................................................................................................................... 9
`
`Brooke Group Ltd. v. Brown & Williamson Tobacco Corp.,
`509 U.S. 209 (1993) .................................................................................................................... 6
`
`Business Electronics Corp. v. Sharp Electronics Corp.,
`485 U.S. 717 (1988) .................................................................................................................. 16
`
`C.S. Sewell, M.D. P.C. v. Amerigroup Tennessee, Inc.,
`2018 WL 6591429 (M.D. Tenn. Dec. 14, 2018)............................................................... 6, 8, 21
`
`Catalano, Inc. v. Target Sales, Inc.,
`446 U.S. 643 (1980) ............................................................................................................ 15, 17
`
`Citizen Publishing Co. v. United States,
`394 U.S. 131 (1969) ............................................................................................................ 19, 20
`
`Com-Tel, Inc. v. DuKane,
`669 F.2d 404 (6th Cir. 1982) .................................................................................................... 19
`
`Continental Wall Paper Co. v. Lewis Voight & Sons Co.,
`212 U.S. 227 (1909) .................................................................................................................. 20
`
`Darby v. Childvine, Inc.,
`964 F.3d 440 (6th Cir. 2020) ...................................................................................................... 2
`ii
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`Direct Sales Co. v. United States,
`319 U.S. 703 (1943) .................................................................................................................... 6
`
`E. R. R. Presidents Conference v. Noerr Motor Freight, Inc.,
`365 U.S. 127 (1961) .................................................................................................................... 7
`
`Epic Games, Inc. v. Apple, Inc.,
`67 F.4th 946 (9th Cir. 2023) ..................................................................................................... 12
`
`Erie County, Ohio v. Morton Salt, Inc.,
`702 F.3d 860 (6th Cir. 2012) ...................................................................................................... 6
`
`FTC v. Cement Institute,
`333 U.S. 683 (1948) .................................................................................................................. 10
`
`FTC v. Superior Court Trial Lawyers Ass’n,
`493 U.S. 411 (1990) .................................................................................................................. 17
`
`Gelboim v. Bank of America Corp.,
`823 F.3d 759 (2d Cir. 2016)................................................................................................ 17, 20
`
`Glasser v. United States,
`315 U.S. 60 (1942) .................................................................................................................. 8, 9
`
`Goldfarb v. Virginia State Bar,
`421 U.S. 773 (1975) .................................................................................................................. 22
`
`Hyland v. HomeServices of America, Inc.,
`771 F.3d 310 (6th Cir. 2014) ................................................................................................ 8, 14
`
`In re Flat Glass Antitrust Litigation,
`385 F.3d 350 (3d Cir. 2004)................................................................................................ 20, 22
`
`In re High Fructose Corn Syrup Antitrust Litigation,
`295 F.3d 651 (7th Cir. 2002) .................................................................................................... 21
`
`In re Insurance Brokerage Antitrust Litigation,
`618 F.3d 300 (3d Cir. 2010)...................................................................................................... 11
`
`In re Southeastern Milk Antitrust Litigation,
`739 F.3d 262 (6th Cir. 2014) .................................................................................................... 16
`
`In re Travel Agent Commission Antitrust Litigation,
`583 F.3d 896 (6th Cir. 2009) .................................................................................................... 10
`
`In re Vitamins Antitrust Litigation,
`320 F. Supp. 2d 1 (D.D.C. 2004) ................................................................................................ 9
`
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`iii
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`Interstate Circuit v. United States,
`306 U.S. 208 (1939) .............................................................................................. 7, 9, 11, 13, 21
`
`James R. Snyder Co. v. Associated General Contractors of America, Detroit Chapter, Inc.,
`677 F.2d 1111 (6th Cir. 1982) .................................................................................................. 10
`
`Kleen Products LLC v. Georgia-Pacific LLC,
`910 F.3d 927 (7th Cir. 2018) ................................................................................................ 6, 18
`
`Kleen Products, LLC v. Packaging Corp. of America,
`775 F. Supp. 2d 1071 (N.D. Ill. 2011) ........................................................................................ 7
`
`Klor’s Inc. v. Broadway-Hale Stores, Inc.,
`359 U.S. 207 (1959) ............................................................................................................ 16, 19
`
`Lamb Enterprises, Inc. v. Toledo Blade Co.,
`461 F.2d 506 (6th Cir. 1972) .................................................................................................... 11
`
`Meyer v. Kalanick,
`174 F. Supp. 3d 817 (S.D.N.Y. 2016) ................................................................................. 12, 20
`
`NCAA v. Board of Regents of University of Oklahoma,
`468 U.S. 85 (1984) .................................................................................................. 1, 4, 5, 16, 17
`
`Norfolk Monument Co. v. Woodlawn Memorial Gardens,
`394 U.S. 700 (1969) .................................................................................................................. 23
`
`Northern Securities Co. v. United States,
`193 U.S. 197 (1904) .................................................................................................................... 7
`
`Northern Pacific Railway Co. v. United States,
`356 U.S. 1 (1958) ........................................................................................................................ 1
`
`
`Ohio v. American Express Co.,
`138 S. Ct. 2274 (2018) ........................................................................................................ 16, 17
`
`Palmer v. BRG of Georgia, Inc.,
`498 U.S. 46 (1980) .................................................................................................................... 18
`
`PLS.Com, LLC v. National Ass’n of Realtors,
`32 F.4th 824 (9th Cir. 2022) ..................................................................................................... 11
`
`Relevent Sports, LLC v. United States Soccer Federation, Inc.,
`61 F.4th 299 (2d Cir. 2023) ...................................................................................... 6, 12, 13, 15
`
`Robertson v. Sea Pines Real Estate Cos., Inc.,
`679 F.3d 278 (4th Cir. 2012) .................................................................................................... 12
`
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`Rothery Storage & Van Co. v. Atlas Van Lines, Inc.,
`792 F.2d 210 (D.C. Cir. 1986) ............................................................................................ 16, 18
`
`Standard Oil Co. of New Jersey v. United States,
`221 U.S. 1 (1911) ...................................................................................................................... 15
`
`Systemcare, Inc. v. Wang Laboratories Corp.,
`117 F.3d 1137 (10th Cir. 1997) ................................................................................................ 12
`
`Total Benefits Planning Agency, Inc. v. Anthem Blue Cross & Blue Shield,
`552 F.3d 430 (6th Cir. 2008) .................................................................................................... 15
`
`Toys R Us, Inc. v. FTC,
`221 F.3d 928 (7th Cir. 2000) .................................................................................................... 11
`
`United States v. Airline Tariff Publishing Co.,
`836 F. Supp. 9 (D.D.C. 1993) ................................................................................................... 21
`
`United States v. All Star Industries,
`962 F.2d 465 (5th Cir. 1992) .................................................................................................... 19
`
`United States v. American Tobacco Co.,
`221 U.S. 106 (1911) .................................................................................................................... 7
`
`United States v. Andreas,
`216 F.3d 645 (7th Cir. 2000) .................................................................................................... 23
`
`United States v. Apple, Inc.,
`791 F.3d 290 (2d Cir. 2015)................................................................................................ 11, 19
`
`United States v. Citizens & Southern National Bank,
`422 U.S. 86 (1975) .................................................................................................................... 20
`
`United States v. Foley,
`598 F.2d 1323 (4th Cir. 1979) .................................................................................................. 11
`
`United States v. Frazier,
`584 F.2d 790 (6th Cir. 1978) ...................................................................................................... 9
`
`United States v. General Motors Corp.,
`384 U.S. 127 (1966) .................................................................................................................. 19
`
`United States v. Jackson,
`422 F.2d 975 (6th Cir. 1970) ...................................................................................................... 7
`
`United States v. Maliszewski,
`161 F.3d 992 (6th Cir. 1998) ...................................................................................................... 6
`
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`United States v. Masonite Corp.,
`316 U.S. 265 (1942) ............................................................................................................ 10, 20
`
`United States v. McKesson & Robbins, Inc.,
`351 U.S. 305 (1956) .................................................................................................................. 17
`
`United States v. MMR Corp. (LA),
`907 F.2d 489 (5th Cir. 1990) .................................................................................................... 19
`
`United States v. Moody,
`787 F. App’x 857 (6th Cir. 2019) ....................................................................................... 11, 21
`
`United States v. Paramount Pictures, Inc.,
`334 U.S. 131 (1948) .................................................................................................................. 10
`
`United States v. Socony-Vacuum Oil Co.,
`310 U.S. 150 (1940) ........................................................................................ 1, 6, 17, 18, 19, 22
`
`United States v. Topkins,
`No. CR 15-00201 (N.D. Cal. Apr. 30, 2015), https://www.justice.gov/atr/case-
`document/file/628891/download .............................................................................................. 18
`
`United States v. Union Pacific Railroad Co.,
`226 U.S. 61 (1912) ...................................................................................................................... 2
`
`Verizon Commcunications Inc. v. Law Offices of Curtis V. Trinko, LLP,
`540 U.S. 398 (2004) .................................................................................................................. 15
`
`Virginia Excelsior Mills, Inc v. FTC,
`256 F.2d 538 (4th Cir. 1958) .................................................................................................... 20
`
`White v. R.M. Packer Co.,
`635 F.3d 571 (1st Cir. 2011) ....................................................................................................... 6
`
`Statutes
`
`15 U.S.C. § 1 ................................................................................................................. 1, 4, 5, 7, 15
`
`Rules
`
`Federal Rule of Civil Procedure 12(b)(6) ....................................................................................... 8
`
`Other Authorities
`
`Salil K. Mehra, Price Discrimination-Driven Algorithmic Collusion: Platforms for Durable
`Cartels, 26 STAN. J. L. & BUS. FIN. 171 (2021) .......................................................................... 2
`
`Maureen K. Ohlhausen, Should We Fear The Things That Go Beep In the Night? Some Initial
`Thoughts on the Intersection of Antitrust Law and Algorithmic Pricing, Federal Trade
`
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`Commission (May 23, 2017),
`https://www.ftc.gov/system/files/documents/public_statements/1220893/ohlhausen_-
`_concurrences_5-23-17.pdf ..................................................................................................... 21
`
`Richard Posner, Antitrust in the New Economy, 68 ANTITRUST L.J. 925 (2001) ........................... 2
`
`
`
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`The United States respectfully submits this memorandum of law in support of its Statement
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`of Interest.
`
`BACKGROUND
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`1. Section 1 of the Sherman Act prohibits “[e]very contract, combination in the form of
`
`trust or otherwise, or conspiracy” that unreasonably restrains trade. 15 U.S.C. § 1; NCAA v. Bd.
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`of Regents of Univ. of Oklahoma, 468 U.S. 85, 98 (1984). As the Supreme Court has reaffirmed,
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`“[t]he Sherman Act was designed to be a comprehensive charter of economic liberty aimed at
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`preserving free and unfettered competition as the rule of trade.” N. Pac. Ry. Co. v. United States,
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`356 U.S. 1, 4 (1958).
`
`Given this purpose, the “central evil” addressed by Section 1 of the Sherman Act is “the
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`elimination of competition that would otherwise exist,” including competition on prices. Am.
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`Needle, Inc. v. NFL, 560 U.S. 183, 195 (2010) (citation omitted); United States v. Socony-Vacuum
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`Oil Co., 310 U.S. 150, 224 n.59 (1940). It is per se illegal for competitors to join together their
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`independent decision-making power to raise, depress, fix, peg, or stabilize prices. See Socony-
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`Vacuum, 310 U.S. at 223-24 & n.59.
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`As technology has evolved, so too have methods of price fixing. In 1890, a price-fixing
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`conspiracy might have manifested with a formal handshake in a clandestine meeting. The
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`proliferation of fax machines, emails, text messages, and inter-company chat platforms has
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`presented new means of unlawfully acting in concert oceans away. While these methods might
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`have been unimaginable to the robber barons whose conduct necessitated and inspired the Sherman
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`Act, under Section 1, “the machinery employed by a combination for price-fixing is immaterial.”
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`Socony-Vacuum, 310 U.S. at 223. Section 1 applies to collaborations that eliminate independent
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`decisionmaking—however they have been brought about. See Am. Needle, 560 U.S. at 186, 195;
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`1
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`pp. 5-8, infra. Antitrust law does not become obsolete simply because conspirators find new ways
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`to act in concert. As the Supreme Court has recognized, the Sherman Act was written to
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`“embrace[] all forms of combination, old and new.” United States v. Union Pac. R. Co., 226 U.S.
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`61, 85-86 (1912) (emphasis added); cf. Richard Posner, Antitrust in the New Economy, 68
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`ANTITRUST L.J. 925, 925 (2001) (“[A]ntitrust doctrine is supple enough . . . to take in stride the
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`competitive issues presented by the new economy.”).
`
`Today, software algorithms can be employed to fix prices—and this modern machinery
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`may be easier and more effective than past methods of price fixing. Algorithms can process far
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`more information more rapidly than humans. The technical capabilities of software can enhance
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`competitors’ ability to optimize cartel gains, monitor real-time deviations, and minimize incentives
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`to cheat. See, e.g., Salil K. Mehra, Price Discrimination-Driven Algorithmic Collusion: Platforms
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`for Durable Cartels, 26 STAN. J. L. & BUS. FIN. 171, 177 (2021).
`
`Longstanding legal principles apply with equal force to this new machinery. Section 1
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`prohibits competitors from fixing prices by knowingly sharing their competitive information with,
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`and then relying on pricing decisions from, a common human pricing agent who competitors know
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`analyzes information from multiple competitors. The same prohibition applies where, as here, the
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`common pricing agent is a common software algorithm.
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`2. This case involves two complaints alleging unlawful price-fixing schemes among
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`landlords1 organized by a software algorithm company: RealPage.2 One complaint alleges an
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`unlawful agreement to use RealPage software recommendations to “raise multifamily rental
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`1 “Landlords” in this memorandum refers to all defendants named in the complaints, save
`RealPage, Inc. and its private-equity owners.
`2 All facts in this memorandum are based on the complaints. Factual allegations are “taken as
`true” as true on a motion to dismiss. Darby v. Childvine, Inc., 964 F.3d 440, 444 (6th Cir. 2020).
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`2
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`housing prices.” Doc. No. 530 (“Multifamily Compl.”), ¶¶ 1, 5-6. The second alleges a similar
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`scheme to “artificially inflate the prices of student housing.” Doc. No. 527 (“Student Compl.”),
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`¶¶ 1, 6.3
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`RealPage,
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`the complaints allege, unlawfully combines competing
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`landlords’
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`decisionmaking on housing prices. To participate in the service, landlords must share in “real-
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`time” their “non-public,” “competitively sensitive” data, including actual rents paid, occupancy
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`rates, and records of lease transactions. Multifamily Compl. ¶¶ 227, 380. RealPage then feeds
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`“this data into a common algorithm.” Student Compl. ¶ 5; Multifamily Compl. ¶ 380. The
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`common algorithm uses these common data for a single, common purpose: to generate “forward-
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`looking, unit-specific pricing and supply recommendations” for all participating landlords.
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`Student Compl. ¶ 5. To ensure that the landlords abide by these “recommendations,” RealPage
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`puts significant “pressure” on them “to implement RealPage’s prices,” including by requiring
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`clients to submit requests to deviate to the “corporate office” and tracking the “identity of the
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`client’s staff that requested a deviation.” Multifamily Compl. ¶¶ 17-20, 261-86. As a result,
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`landlords using RealPage adopt RealPage’s recommendations 80-90% of the time. Id. ¶ 15.
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`The complaints allege that RealPage was clear about the purpose of its common pricing
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`scheme: to increase prices above competitive levels through collaboration. According to the
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`complaints, RealPage’s own marketing materials make clear that it “utilizes the competitive data”
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`of competitors, Student Compl. ¶ 5, to allow those competitors to “outperform the market,”
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`Multifamily Compl. ¶ 4; Student Compl. ¶¶ 15, 142. As RealPage allegedly put it, it offered clients
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`“the ability to ‘outsource daily pricing and ongoing revenue oversight’ to RealPage,” allowing
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`3 This memorandum addresses only plaintiffs’ claim that the alleged scheme is per se unlawful. It
`does not address plaintiffs’ alternate, rule-of-reason claim or the student plaintiffs’ claim alleging
`a conspiracy to exchange competitively sensitive information.
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`3
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`RealPage to “set prices for its clients’ properties ‘as though we [RealPage] own[ed] them
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`ourselves.’” Multifamily Compl. ¶ 7. Collaboration on prices, including via sharing nonpublic
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`pricing and supply information, is thus the central feature of the product. As an employee for one
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`landlord stated: While “we are all technically competitors, [RealPage product] helps us to work
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`together . . . to make us all more successful in our pricing,” as the software is “designed to work
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`with a community in pricing strategies, not work separately.” Id. ¶ 9 (emphases added); accord
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`Student Compl. ¶¶ 4, 6. Put simply, RealPage allegedly replaces independent competitive
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`decisionmaking on prices, which often leads to lower prices for tenants, with a price-fixing
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`combination that violates Section 1 of the Sherman Act.
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`Defendants have moved to dismiss both complaints, claiming that plaintiffs failed to
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`adequately allege a Section 1 violation. Doc. No. 593 (“Multifamily Mot.”); Doc No. 588
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`(“Student Mot.”).
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`ARGUMENT
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`Section 1 of the Sherman Act prohibits “[e]very contract, combination in the form of trust
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`or otherwise, or conspiracy” that unreasonably restrains trade. 15 U.S.C. § 1; Bd. of Regents, 468
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`U.S. at 98. The Supreme Court has identified two central elements under Section 1: (1) a “contract,
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`combination, or conspiracy”—that is, “concerted action,” the joining together of “independent
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`centers of decisionmaking”; and (2) that “unreasonably restrains trade.” Am. Needle, 560 U.S. at
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`186, 195. Each element poses a separate inquiry. The “question whether an arrangement is a
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`contract, combination, or conspiracy is different from and antecedent to the question whether it
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`unreasonably restrains trade.” Id at 186.
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`This memorandum addresses each element in turn. As to the first, it explains that
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`concerted action includes any conduct that joins together otherwise-separate decisionmaking and
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`thus deprives the market of independent centers of decisionmaking. As to the second, it explains
`4
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`that certain classes of conduct—including price-fixing arrangements among actual or potential
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`competitors—are categorically unreasonable restraints of trade that violate Section 1 of the
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`Sherman Act.
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`I.
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`There Are Many Types of Concerted Action and Many Ways of Proving It
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`In this section, we first address the proper scope of Section 1’s concerted-action
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`requirement before explaining the range of evidence capable of satisfying it. We conclude by
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`applying the law to the allegations set forth in the complaints.
`
`A. Concerted Action Includes Any Type of Conduct That Joins Together
`Separate Decisionmakers and Thus Deprives the Marketplace of
`Independent Centers of Decisionmaking
`
`As the Supreme Court has made clear, “Section 1 applies only to concerted action that
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`restrains trade.” Am. Needle, 560 U.S. at 190. Because Congress recognized that “[c]oncerted
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`activity inherently is fraught with anticompetitive risk,” it defined concerted action broadly to
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`encompass contracts, combinations, and conspiracies. Id. at 190, 195 (citation omitted). The
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`“key” to the concerted-action inquiry is whether the alleged arrangement “joins together separate
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`decisionmakers” and
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`thus “deprives
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`the marketplace of
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`independent centers of
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`decisionmaking.” Id. at 195 (citations omitted). It is a “functional analysis” that focuses on “how
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`the parties involved in the alleged anticompetitive conduct actually operate.” Id. at 191-92, 195;
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`see also id. at 196 (reaffirming that “the inquiry is one of competitive reality”).
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`Given the Sherman Act’s focus on protecting independent decisionmaking, courts
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`recognize that the joint delegation of competitive decisions constitutes concerted action under
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`Section 1. For example, the Supreme Court has held that “decisions by [a joint licensing agent]
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`regarding the [NFL] teams’ separately owned intellectual property constitute concerted action” by
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`the teams. Am. Needle, 560 U.S. at 204 (citation omitted). And the Second Circuit has concluded
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`that allegations that competing entities “have ‘surrendered [their] freedom of action . . . and agreed
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`5
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`to abide by the will of the association[]’” are “enough” for concerted action. Relevent Sports, LLC
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`v. United States Soccer Fed’n, Inc., 61 F.4th 299, 309 (2d Cir. 2023) (citing Anderson v.
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`Shipowners’ Ass’n of Pac. Coast, 272 U.S. 359, 364-65 (1926)). In these situations, the common
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`delegation of decisionmaking to a common entity allows its decisions to affect actual or potential
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`competition—even without any additional subsequent agreement or coordination among the
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`parties. This kind of delegation thus represents the joining together of separate actors with separate
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`economic interests characteristic of concerted action that Section 1 of the Sherman Act reaches.
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`Even when courts look for an “agreement” among separate entities in analyzing concerted
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`action, “[n]o formal agreement is necessary” under Section 1. Am. Tobacco Co. v. United States,
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`328 U.S. 781, 809 (1946). “[T]acit” agreements qualify.4 Bell Atl. Corp. v. Twombly, 550 U.S.
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`544, 553 (2007) (citation omitted); Erie Cnty., Ohio v. Morton Salt, Inc., 702 F.3d 860, 868 (6th
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`Cir. 2012); C.S. Sewell, M.D. P.C. v. Amerigroup Tennessee, Inc., 2018 WL 6591429, at *3 (M.D.
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`Tenn. Dec. 14, 2018) (Crenshaw, J.). Such tacit agreements can involve merely a “wink and a
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`nod,” Kleen Prod. LLC v. Georgia-Pac. LLC, 910 F.3d 927, 936 (7th Cir. 2018), or be an informal
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`“gentlemen’s agreement or understanding,” Socony-Vacuum., 310 U.S. at 179, 252; in these
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`circumstances, “only the conspirators’ actions . . . indicate the existence of an agreement.” White
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`v. R.M. Packer Co., 635 F.3d 571, 575-76 (1st Cir. 2011).5
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`4 A “tacit agreement,” which is concerted action, Twombly, 550 U.S. at 553, is different from mere
`interdependent action by firms in oligopolistic markets, which is sometimes called “tacit collusion”
`and is not concerted action. See Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509
`U.S. 209, 227 (1993).
`5 See also Direct Sales Co. v. United States, 319 U.S. 703, 714 (1943) (“it can make no difference
`[that] the agreement was a tacit understanding, created by a long course of conduct and executed
`in the same way”); United States v. Maliszewski, 161 F.3d 992, 1006 (6th Cir. 1998) (“evidence
`of a tacit agreement or mutual understanding is sufficient to demonstrate a conspiracy”).
`6
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`Case 3:23-cv-00979 Document 110 Filed 11/15/23 Page 14 of 33 PageID #: 476
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`That breadth of Section 1’s reach rests in part on the fact that, by its own statutory terms,
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`the provision covers “combination[s]” in addition to “contract[s]” and “conspirac[ies].” 15 U.S.C.
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`§ 1. The statutory term “combination” has been interpreted to cover actions in concert where the
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`challenged conduct inherently involves cooperative behavior, such as when holding companies
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`join together the operation of previously competing companies. See, e.g., United States v. Am.
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`Tobacco Co., 221 U.S. 106, 187 (1911); N. Sec. Co. v. United States, 193 U.S. 197, 326-27 (1904).
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`And a “combination” exists when there is an implied (or express) “understanding that the
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`participants will jointly give up their trade freedom.” E. R. R. Presidents Conf. v. Noerr Motor
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`Freight, Inc., 365 U.S. 127, 136-37 (1961).
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`Importantly, establishing concerted action under Section 1 does not require any showing
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`of simultaneous action—or even action that is close in time. It is “elementary that an unlawful
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`conspiracy may be and often is formed without simultaneous action or agreement on the part of
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`the conspirators.” Interstate Circuit v. United States, 306 U.S. 208, 227 (1939). An agreement