Here is a succinct statement of the modern doctrine on group boycotts, which is a term of art in antitrust jurisprudence. A “group boycott” is a business practice by which two or more companies (the “boycotting companies”) agree not to do business with one or more companies (the “targeted companies”). Under certain circumstances, a group boycott constitutes an antitrust offense and is condemned under a modified per se rule as a violation of Section 1 of the Sherman Act and California’s Cartwright Act.

Specifically, a group boycott is per se unlawful when the following circumstances are in place:

  1. The boycotting companies control a resource, such as a facility, a supply or access to a market, that each targeted company requires in order to become or remain a viable competitor in a given line of commerce or market, and one of the boycotting companies, or all of them collectively, hold a “dominant” position in the line of commerce or market from which they seek to exclude each targeted company.
  2. The boycotting companies act in concert to withhold the necessary resource from each targeted company, which in consequence cannot become or remain viable competitor.
  3. The boycotting companies lack a necessary business justification for withholding the necessary resource from each targeted company.
  4. The boycott is “horizontal” — i.e., is undertaken in accordance with an express or tacit understanding reached by two or more direct competitors.

Legal AuthoritySee Hahn v. Oregon Physicians’ Service, 860 F.2d 1501, 1509 (9th Cir. 1988) (setting forth the first three of the above four criteria); and NYNEX Corp. v. Discon, Inc., 525 U.S. 128, 135, 119 S.Ct. 493, 498 (1998) (indicating that the per se rule against group boycotts applies only when it entails a horizontal arrangement made by direct competitors). See also Klor’s, Inc. v. Broadway-Hale Stores, Inc., 359 U.S. 207, 212-14, 79 S.Ct. 705, 709-10 (1959) (the Supreme Court stated the per se principle); and Northwest Wholesale Stationers, Inc. v. Pacific Stationery and Printing Co., 472 U.S. 284, 294, 105 S.Ct. 2613, 2619-20 (1985) (a group boycott is unlawful per se when it has “involved joint efforts by a firm or firms to disadvantage competitors by either directly denying or persuading or coercing suppliers or customers to deny relationships the competitors need in the competitive struggle.”) (quoting L. Sullivan, Law of Antitrust at 261-62 (1977)).