The US Supreme Court case Business Electronics Corp. v. Sharp Electronics Corp., 1987, revolved around an antitrust dispute between the two electronics companies. Sharp terminated its relationship with distributor Business Electronics after another distributor complained about price-cutting competition from them. Business Electronics sued Sharp for violating Sherman Antitrust Act by engaging in a conspiracy to fix prices, which was dismissed by the District Court but reversed on appeal by the Fifth Circuit. However, upon reaching the Supreme Court, it ruled in favor of Sharp (5-4), stating that there must be evidence of an agreement to set prices or reduce output for a vertical restraint (an arrangement affecting supply chain) to be illegal per se under Sherman Act Section 1. The court held that if only one price is involved - as was this case where no minimum level had been agreed upon - then it cannot constitute a violation unless there's proof of actual adverse effect on competition beyond mere possibility.

In the dissenting opinion for Business Electronics Corp. v. Sharp Electronics Corp., Justice Stevens argued that a vertical restraint should be considered per se illegal if it involves an agreement to terminate a price-cutting distributor, even without proof of conspiracy to fix prices or restrict output. He disagreed with the majority's view that such agreements are not necessarily anti-competitive and can sometimes enhance competition by reducing free riding on services provided by full-service distributors. Instead, he believed these agreements inherently limit competition because they protect less efficient distributors from price competition and allow manufacturers to control retail pricing indirectly through their choice of distributors. Furthermore, he criticized the majority's reliance on economic theory rather than legal precedent in making its decision.