Eleventh Circuit Affirms FTC Finding That Rebate Program Served To Unlawfully Maintain Monopoly Power

The Eleventh Circuit recently affirmed a Federal Trade Commission finding that a manufacturer's rebate program requiring exclusivity from its distributors was an unlawful maintenance of monopoly power under Section 5 of the FTC Act. McWane, Inc. v. Fed. Trade Comm., No. 14-11363 (11th Cir. April 15, 2015). The Court found that the rebate program's practical effect was to make it economically infeasible for distributors to switch from defendant McWane to its only competitor, Star Pipe Products ("Star"). Unable to attract sales, Star was therefore incapable of generating enough revenue to become an efficient and effective competitor to challenge McWane's near 100% monopoly over domestic water-pipe fittings.