The following is not meant to be legal advice.
The U.S. Supreme Court granted certiorari in Bell Atlantic Corp. v. Twombly to consider whether a complaint alleging a violation of Sherman Act Section 1 can survive a motion to dismiss when the complaint alleges parallel conduct unfavorable to competition without any other facts to support an agreement.
Plaintiffs representing a putative class of subscribers of local telephone and/or high-speed Internet services alleged that Incumbent Local Exchange Carriers (ILECs) conspired to restrain trade by an agreement not to compete inferred from the absence of meaningful competition between the ILECs. This resulted in inflating charges for local telephone service and high-speed Internet services, by engaging in parallel conduct to restrain the growth of competitive local exchange carriers (CLECs).
The U.S. Supreme Court reversed the decision of the Second Circuit. The U.S. Supreme Court held that such a complaint must allege enough factual matter to suggest that an agreement was made, showing that the claim is not only conceivable but plausible on its face.
The U.S. Supreme Court observed that the ILECs each had incentives to act unilaterally to keep their regional dominance and not to compete outside their territories. The decision in Twombly is a gain for defendants in antitrust cases where allegations of conspiracy are made in the complaint.
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