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To: Windsock who wrote (237858)	7/31/2007 4:22:14 PM
From: combjelly	Respond to of 275872

"The Lepage case dealt with a bundled discount system and not a stepped discount system that Intel described." If you read the decision, a key part of the complaint was the pricing to exclude LePage. And that is what the decision turned on. The discounts varied from vendor to vendor specifically to exclude LePage. Which is what Intel's scheme does. I am done with this issue for the day. I am close enough to the speed limit as it is.

To: Windsock who wrote (237858)	7/31/2007 4:27:58 PM
From: fastpathguru	Read Replies (2) \| Respond to of 275872

Where does the Lepage case have the statement of law that discounts keyed to a percentage of the business? The Lepage case dealt with a bundled discount system and not a stepped discount system that Intel described. Bundled products included buy Scotch brand tape, PostIts, etc. and you will receive a discount on private label clear tape, e.g. Walmart brand tape. The important part of the LePage's case is that the courts rejected 3M's assertion that merely because their prices were not below cost, they were legal. Perhaps SmithKline vs. Eli Lilly is a closer match? usdoj.gov """ Prior to entry by SmithKline, Lilly had offered volume-related rebates, as part of a Cephalosporin Savings Plan (CSP). In the latter half of 1974, Lilly examined ways to combat SmithKline, and on April 1, 1975, it introduced a Revised CSP that reduced the discount to hospitals by about 3%. At the same time, the new pricing plan gave an additional 3% rebate on a hospital’s total cephalosporin purchases provided the hospital bought certain minimum quantities, specific to each hospital, for any three of Lilly’s five cephalosporin drugs.[26] From this discussion, the main elements of SmithKline roughly coincide with the assumptions of our model. Lilly had monopoly cephalosporin products in the Revised CSP bundle and offered a discount on the bundle. Lilly’s Kefzol and SmithKline’s Ancef were generically equivalent and, we assume, perfectly homogeneous.[27] The Court calculated return on sales for Ancef assuming that SmithKline matched Lilly’s bundled rebates. Assuming that SmithKline produced Ancef as efficiently as Lilly made Kefzol, the Court found that SmithKline could not match Lilly’s bundled rebates without incurring losses.[28] That is, an equally efficient competitor of Kefzol (or Ancef) could not have been profitable against the Revised CSP. The Court found that Lilly had willfully maintained monopoly power under Section 2 of the Sherman Act, but found that Lilly’s pricing practices did not constitute tying, under Section 1. Thus, the Court used the Ortho test as a “bright line” test to determine whether or not Lilly’s rebates were anticompetitive. """