Two-Party Exchange Agreement
Courts have long recognized that two-party exchange agreements in the petroleum industry have both efficiency-enhancing purposes, and pro-competitive effects.
They avoid the necessity and cost for redundant refinery operations in each area served by a refiner's marketing arm (see American Oil Company v. McMullin (10th Cir. 1975) 508 F.2d 1345, 1353;
Thomas v. Amerada Hess Corporation (M.D. Penn. 1975) 393 F. Supp. 58, 74) and provide a company with product at competitive cost, allowing the company to compete in its competitor's geographic area (see Marathon Oil Company v. Mobil Corporation (N.D. Ohio, 1981) 530 F. Supp. 315, 321, fn. 9).
For these reasons, the courts have consistently refused to conclude that a two-party exchange agreement, without more, is a restraint of trade constituting a per se violation of antitrust laws. (Blue Bell Co. v. Frontier Refining Co. (10th Cir. 1954) 213 F.2d 354, 359.)
Exchange agreements are also beneficial to the environment because they eliminate the risks of accidental spills if product is required to be stored and then shipped great distances.
Because each two-party exchange agreement is as consistent with the defendants' permissible independent conduct as with an illegal conspiracy, drawing an inference of an anti-competitive agreement based solely on that ostensibly legitimate conduct is the type of "'"mistaken inference . . . that is especially costly, because it chills the very conduct the antitrust laws are designed to protect."'" ( Brooke Group, Ltd. v. Brown & Williamson Tobacco Corp., supra, 509 U.S. at p. 226.)