In Continental T.V. v. GTE Sylvania, 433 U.S. 36, 97 S.Ct. 2549, 53 L.Ed.2d 568 (1977), the Court was again confronted with vertical restrictions placed by the manufacturer on the distribution and sale of its products. The Supreme Court rejected the reasoning of the appellate court which had attempted to distinguish the United States v. Arnold, Schwinn & Co., 388 U.S. 365, 87 S.Ct. 1856, 18 L.Ed.2d 1249 (1967) case. Instead, the Supreme Court chose to expressly overrule its previous decision in Schwinn. Justice Powell, writing for the majority in Continental, found that there was no principled basis for the distinction drawn in Schwinn between sale and non-sale transactions. The question of whether title to the goods had formally passed was totally interrelated to the underlying policy concerns which should be considered when determining whether a particular type of restriction violates section 1 of the Sherman Act. The majority opinion then went on to note that while vertical restrictions on brand name products would tend to inhibit intra-brand competition, they could also promote inter-brand competition. Therefore, the Court overturned the application of the per se standard to vertical restrictions and held that such practices should be analyzed under the rule of reason to determine whether the pro-competitive effects outweighed the anti-competitive effects. In so holding, the Court stated that "departure from the rule-of-reason standard must be based upon demonstrable economic effect rather than--as in Schwinn--upon formalistic line drawing." Continental, 433 U.S. at 59, 97 S.Ct. at 2562. In Continental, the Court found that application of the per se rule of illegality to the vertical restraints challenged in that case was inappropriate because of the numerous pro-competitive aspects of the restraints.