Reference no: EM131661005

Question: Case Problem with Sample Answer. Moist snuff is a smokeless tobacco product sold in small round cans from racks, which include point-of-sale (POS) ads. POS ads are critical because tobacco advertising is restricted and the number of people who use smokeless tobacco products is relatively small. In the moist snuff market in the United States, there are only four competitors, including U.S. Tobacco Co. and its affiliates (USTC) and Conwood Co. In 1990, USTC, which held 87 percent of the market, began to convince major retailers, including Wal-Mart Stores, Inc., to use USTC's "exclusive racks" to display its products and those of all other snuff makers. USTC agents would then destroy competitors' racks.

USTC also began to provide retailers with false sales data to convince them to maintain its poorselling items and drop competitors' less expensive products. Conwood's Wal-Mart market share fell from 12 percent to 6.5 percent. In stores in which USTC did not have rack exclusivity, however, Conwood's market share increased to 25 percent. Conwood filed a suit in a federal district court(FDC) against USTC, alleging, in part, that USTC used its monopoly power to exclude competitors from the moist snuff market. Should the court rule in Conwood's favor? What is USTC's best defense? Discuss. [Conwood Co., L.P. v. U.S. Tobacco Co., 290 F.3d 768 (6th Cir. 2002)]