Aspen Skiing Co. v. Aspen Highlands Skiing Corp. and the Limits of Refusal to Deal

Aspen Skiing Co. v. Aspen Highlands Skiing Corp. was a landmark antitrust case that shed light on the limits of refusal to deal. The case involved a dispute between two ski resorts in Aspen, Colorado, over the sale of lift tickets.

The Aspen Skiing Co. owned the rights to the Silver Queen Gondola, which connected its ski area to Aspen Highlands. The Aspen Highlands Skiing Corp. wanted to buy the rights to the gondola, but the Aspen Skiing Co. refused to sell.

The Aspen Skiing Co.'s refusal to deal was motivated by a desire to maintain its market power and exclude Aspen Highlands from the Aspen ski market. This strategy was not new, as the Aspen Skiing Co. had previously used its control of the Silver Queen Gondola to limit Aspen Highlands' access to the Aspen ski area.

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The Supreme Court's decision in Aspen Skiing Co. v. Aspen Highlands Skiing Corp. started with a review of the case's procedural history.

The Supreme Court granted cert, which means they agreed to review the case, and ultimately affirmed the 10th Circuit's decision.

This affirmation was based on the court's finding of anticompetitive intent, but the court did not analyze the essential facilities doctrine in its ruling.

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The Supreme Court case of Aspen Skiing Co. v. Aspen Highlands Skiing Corp. is a fascinating example of how a company's refusal to deal with a competitor can be considered monopolization.

In this case, Ski Co. refused to sell lift tickets to Highlands, which had a successful joint-venture with Ski Co. The Court found that this refusal could be considered monopolization because it deprived consumers of a superior ticket option and injured Highlands' ability to offer competitive multi-area tickets.

Ski Co. attempted to justify its refusal by saying that Highlands' vouchers were cumbersome to process, but the Court rejected this argument because it was found that the vouchers were no more difficult to process than credit cards.

The Court also found that Ski Co. sacrificed short-term profits from selling Highlands lift tickets at retail prices in the hope of long-term anticompetitive gains from injuring their rival. This conduct could support a monopolization claim.

The jury concluded that there were no "valid business reasons" for Ski Co.'s refusal to deal with Highlands.

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The Court's analysis of exclusionary effects in Aspen Skiing Co. v. Aspen Highlands Skiing Corp. is a crucial aspect of the case.

The Court focused on the history of successful joint-ventures to illustrate that such conduct was possible and beneficial. However, critics point out that this analysis alone does not support an antitrust violation.

Ski Co. did not explicitly exclude Highlands since it did not prohibit its ski customers from also purchasing passes from Highlands. But, Ski Co. might have functionally excluded Highlands through its economies of scale and non-linear pricing structure.

The non-linear pricing structure, offering significantly lower rates for multi-day passes over single-day passes, could lead to exclusion. Customers choosing Ski Co.'s multi-area, multi-day passes may choose not to purchase Highlands passes since they already sunk the cost of the Ski Co. ticket.

A survey in the record indicated that over half of respondents "wanted to ski Highlands, but would not" and about 40% responded that "they would not be skiing at the mountain of their choice because their ticket could not permit it."

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