The Sherman Antitrust Act (Sherman Act, July 2, 1890, ch. 647, 26 Stat. 209, 15 U.S.C. § 1-7) was the first United States Federal statute to limit cartels and monopolies. It falls under antitrust law.

The Act provides: “Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal”. The Act also provides: “Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony [. . . ]”

The Act put responsibility upon government attorneys and district courts to pursue and investigate trusts, companies and organizations suspected of violating the Act. The Clayton Act (1914) extended the right to sue under the antitrust laws to “any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws.” Under the Clayton Act, private parties may sue in U.S. district court and should they prevail, they may be awarded treble damages and the cost of suit, including reasonable attorney’s fees.

Wisconsin Case Law

OB-GYN ASSOC. OF NEENAH v. LANDIG, 129 Wis.2d 362 (Ct.App.
ASSOCIATES OF NEENAH, S.C., Plaintiff-Respondent, v. Vivian
LANDIG, Defendant and Third-Party Plaintiff-Appellant, Fred
J. BARTIZAL and Ronald L. Strebel, Third-Party Defendants.
Court of Appeals of Wisconsin. No. 84-2183. Oral argument
November 19, 1985. — Decided February 12, 1986.
Page 363

APPEAL from a judgment and an order of the circuit court
for Winnebago county: ROBERT A. HAWLEY, Judge. Reversed and
cause remanded.

For the defendant and third-party plaintiff-appellant,
briefs were submitted by the Eisenberg — Kuehl, S.C.
firm of Milwaukee. Oral argument by Steven R. Wiechmann.

For the plaintiff-respondent, a brief was filed by Jeffrey
W. Hanes of Remley, Sensenbrenner, Stein, Cummings, Snyder
— Hanes, S.C. of Neenah. Oral argument by Jeffrey W.

For the Department of Justice, an amicus curiae brief was
submitted by Bronson C. La Follette, attorney general, and
Kevin J. O’Connor, assistant attorney general. Oral
argument by Kevin J. O’Connor.

Before Scott, C.J., Brown, P.J., and Nettesheim, J.


This case concerns a species of Wisconsin’s anti-trust
law, sec. 133.05, Stats. ? secret rebates. At issue
is statutory interpretation. The major question is: Did the
legislature intend to outlaw all secret rebates on the
basis that they are unreasonably anti-competitive per se?
Or, did the legislature intend that secret rebates are
unlawful only if complainants Page 364 prove competitive
injury? The trial court found the former to be the case and
granted summary judgment for the complainant. We reverse.

The basic facts are as follows: Obstetrical ?
Gynecological Associates of Neenah, S.C. (OB-GYN) was
moving to a newly constructed building and hired Vivian
Landig to do the interior decorating. In exchange for
Landig’s services, she was to receive fifteen percent of
the total purchases made in decorating the premises. The
agreement also specified that Landig obtain the best
possible prices from suppliers.

Landig obtained discounts but did not inform OB-GYN.
Instead, she quoted retail prices to OB-GYN. OB-GYN,
believing the quoted prices to be the best price available,
wrote checks in the amounts requested; Landig delivered the
checks to the suppliers who, in turn, gave Landig rebates
for the discounted sums. Landig did not pass these rebates
on to OB-GYN.

When Ob-GYN discovered this practice, it refused to pay
Landig’s final bill and sued her under various theories.
Among them was an allegation that subsecs. 133.05(1) and
(2), Stats., were violated. The trial court entered summary
judgment on this ground, the effect of which was to allow
for trebling of damages and payment of attorney fees
pursuant to sec. 133.18(1), Stats. Landig appeals the
summary judgment. A brief discussion of preliminary
concepts is necessary before discussing sec. 133.05 with

The guiding principle of ch. 133, Stats., is free
competition. See sec. 133.01, Stats. Although in truth
every commercial agreement restrains competition, Grams v.
Boss, 97 Wis.2d 332, 348, 294 N.W.2d 473, 481 (1980), to
read anti-trust law as prohibiting all agreements
restraining trade would stifle commerce. Hansen, Spotting
Page 365 Unreasonable Restraints of Trade Without
Difficulty, 55 Wis. Bar Bull., June 1982, at 22. For
example, if Adams sells a car to Smith, the car cannot be
sold to Jones. Id. Still, the transaction is for the
greater good. Courts, therefore, have ruled that the
commercial agreement must, in most cases, unreasonably
restrain competition before they will vacate a free market
transaction. See Grams at 348, 294 N.W.2d at 481.

It is expensive, however, to prove that a restraint is
unreasonable. Hansen at 22. As stated by one commentator:

One must identify the market, show how the restraint
adversely affects it, and prove that the benefits of the
restraint do not justify the resulting encroachment on
competition. Trials last weeks, months and sometimes years.
And then there is discovery.

Economics, experience and common sense disclose that some
practices nearly always restrain trade without compensating

Id. In recognition of this difficulty, courts and
legislatures have fashioned what has been termed as per se
treatment. This is defined by the United States Supreme
Court as follows:

[T]here are certain agreements or practices which because
of their pernicious effect on competition and lack of any
redeeming virtue are conclusively presumed to be
unreasonable and therefore illegal without elaborate
inquiry as to the precise harm they have caused or the
business excuse for their use. Northern Pacific Railway Co.
v. United States, 356 U.S. 1, 5 (1958).

The Wisconsin legislature apparently has enacted
anti-trust laws containing a per se rule. Section Page 366
100.201(2)(a)1., Stats., for example, seems to forbid
certain rebates in the dairy industry without regard to
proof of an adverse effect upon competitors or competition
generally. Also, sec. 100.15, Stats., concerning trading
stamps, and sec. 218.01(9), Stats., dealing with auto
dealerships, appear to have undergone per se treatment. The
question is whether the Wisconsin legislature has done it
here. With this discussion of preliminary concepts in
place, we move on to the interpretation of the statute.

Because interpretation of the statute is a question of
law, we pay no deference to the trial court. Hainz v.
Shopko Stores, Inc., 121 Wis.2d 168, 172, 359 N.W.2d 397,
400 (Ct.App. 1984). We interpret the statutes ab initio.

Section 133.05(1), Stats., states:

The secret payment or allowance of rebates, refunds,
commissions or unearned discounts, whether in the form of
money or otherwise, or the secret extension to certain
purchasers of special services or privileges not extended
to all purchasers purchasing upon like terms and
conditions, such payment, allowance or extension injuring
or tending to injure a competitor or destroying or tending
to destroy competition, is an unfair trade practice and is
prohibited. [Emphasis added.]

OB-GYN interprets the statute to mean that competitive
injury is “not a required element of the prohibited unfair
trade practice but a legislative finding as to the
consequences of secret rebates.” It focuses upon that part
of the statute emphasized above and asserts that we must
read this as a legislative conclusion that all secret
rebates have a pernicious effect upon competition. Page
367 OB-GYN claims that the legislature made this “finding”
in light of its belief that proof of anti-competitive
effect would be too costly and too difficult to meet.

There is nothing in the language of the statute explicitly
stating that such is the legislature’s will. Nor is there
any authority cited by OB-GYN for this proposition. Yet,
just because OB-GYN’s interpretation is novel does not make
it meritless. Upon its face, the statute is unclear as to
whether per se treatment has been afforded. The statute can
reasonably be interpreted either way. When two reasonable
but conflicting interpretations can be given for the same
statute, it can be fairly described as ambiguous.
Wisconsin Bankers Association (Inc.) v. Mutual Savings
? Loan Association, 96 Wis.2d 438, 450, 291 N.W.2d
869, 875 (1980). We thus turn to extrinsic aids to help us
in our interpretive task. Hainz, 121 Wis.2d at 172, 359
N.W.2d at 400.

Probably the most beneficial of aids in this instance is
legislative history. The disputed language has been part of
this statute or its equivalent since at least 1935.

In 1976, a proposal was made to revise this statute by
adopting language similar to sec. 2(d) of the federal
Robinson-Patman Act which does not contain a competitive
impact element. See 1975 Assembly Bill 1316 (introduced
January 21, 1976 at the request of the Department of
Justice). This proposal for a per se rule was, however,
rejected. Subsequently, minor changes were made but none of
the changes did away with the language relating to the
effect upon a competitor or competition that we find in the
present statute, sec. 133.05, Page 368 Stats. This history
alone convinces us that the legislative process considered
the language to create an element that must be proven.

Another valuable extrinsic aid is to compare the language
of our statute with similar federal anti-trust statutes.

We are not obliged to follow federal precedent in the
instant case. The Robinson-Patman Act is not controlling
given the differences in language between it and sec.
133.05, Stats.

Nonetheless, it is significant that the language seized
upon by OB-GYN as indicative of a per se rule is very
similar to the language found in the general price
discrimination section of the Robinson-Patman Act. See sec.
2(a), 15 U.S.C.A. ? 13(a) (1973). That section reads
in pertinent part:

It shall be unlawful . . . to discriminate in price . . .
where the effect of such discrimination may be
substantially to lessen competition or tend to create a
monopoly in any line of commerce, or to injure, destroy, or
prevent competition with any person who either grants or
knowingly receives the benefit of such discrimination, or
with customers of either of them

. . . .

15 U.S.C.A. ? 13(a) (1973) (emphasis added). Section
133.05, Stats., contains a slightly different formulation
but not different enough that we should overlook federal
treatment of that language as having created an element.
See Texas Gulf Sulphur Co. v. J.R. Simplot Co., 418 F.2d
793 (9th Cir. 1969).

On the other hand, federal laws which are specific
“rebate” statutes do have per se rules. See secs. 2(d) and
Page 369 2(e), 15 U.S.C.A. ?? 13(d) and (e)
(1973). Yet, these sections do not contain any “effect upon
the competitor or competition” language. We conclude that
had the legislature wanted a per se rule, it would have
been a simple matter to excise the language regarding the
effect upon the competitor or competition.

We are further unpersuaded by OB-GYN’s argument that
language in sec. 133.04, Stats. (the Wisconsin price
discrimination statute), clearly provides for a competitive
injury element and had the legislature been so inclined, it
could have instituted the same language for sec. 133.05,

Section 133.04, Stats., requires that the price
discrimination must be “for the purpose or intent of
injuring or destroying competition.” OB-GYN concludes that
the words “purpose” and “intent” are explicit in this
section but are not found in sec. 133.05, Stats.

We agree with the attorney general, acting as amicus
curiae, however, that while intent to injure may be the
focus of the price discrimination statute, sec. 133.05,
Stats., has effect upon the competitor or competition as
its focus. As pointed out earlier, effect on competition is
an element found in 15 U.S.C.A. ? 13(a) (1973). It
is also found in a statute regulating mergers. See sec. 7
Clayton Act, 15 U.S.C.A. ? 18 (1973).

We conclude that to prevail under sec. 133.05, Stats., it
is not necessary to show intent to injure, but it is
necessary to prove that the secret rebate had an effect
upon a competitor or an effect upon competition. Since this
is a question of fact, summary judgment was inappropriate.
We reverse and remand.

We must reach one other issue. Landig claims that OB-GYN
lacks standing to sue under this statute, such Page 370
that the sec. 133.05, Stats., issue need not even be tried
upon remand. Amicus joins this argument. Amicus argues that
standing exists only if the plaintiff “was within the
target area of the illegal practices” and “was not only hit
but was aimed at.” Karseal Corp. v. Richfield Oil Corp.,
221 F.2d 358, 365 (9th Cir. 1955). The federal courts have
fashioned a test as follows:

The “target area” has been described as “that area of the
economy which is endangered by a breakdown of competitive
conditions in a particular industry.” “Aimed at” is
intended to express the view that in order to have
standing, “plaintiff’s affected operation [must have been]
actually in the area which it could reasonably be foreseen
would be affected by the conspiracy.”

The “target area” approach in theory offers a pragmatic and
realistic alternative to resolve often-times difficult and
troublesome questions raised by the rigid “direct-indirect”
test of standing, for it attaches more importance to the
nature of the particular antitrust violation and the area
of competition defendant knew or should have known would be
adversely affected.

16G Business Organizations, Von Kalinowski, Antitrust Laws
and Trade Regulations ? 101.02(2)(b) at
101-10-101-11 (1985) (footnotes omitted). Amicus asserts
that since OB-GYN is not a competitor of either the seller
or the recipient of the allegedly “secret rebate,” OB-GYN
cannot show direct injury “by reason of” the secret rebate
under sec. 133.18(1), Stats.,[fn1] and therefore has no
standing. Page 371

Amicus opines, in fact, that it is difficult to discern
from the record, in this case, any direct injury to a
competitor or competition at any level, primary
(supplier), secondary (buyer), or tertiary (ultimate
consumer). It points to a federal court decision
interpreting sec. 133.185, Stats. (1967), the predecessor
to sec. 133.05, Stats., as possibly relating to only the
primary level of competition. Chapiewsky v. G. Heileman
Brewing Co., 297 F. Supp. 33 (W.D. Wis. 1968)[fn2]

We do not agree with amicus’ analysis. The target area
approach is a federal judicial creation designed to
delineate the difference between one who is only
incidentally injured by a violation of the anti-trust laws
? the bystander who was hit but not aimed at
? and one who was directly injured. Karseal Corp.,
221 F.2d at 363. This is in recognition of the federal law
that only persons directly injured “by reason of” intent to
restrain competition can seek damages. See id.

There is no need to make the direct-indirect distinction
under our statute. Section 133.18(1), Stats., explicitly
allows any person injured directly or indirectly to sue
upon this statute. Similar language is not found in the
federal law. See 15 U.S.C.A. ? 15 (1973). This,
coupled with the legislature’s instruction that we give
Page 372 the most liberal construction to achieve the aim
of competition, compels us to the conclusion that an
ultimate consumer who pays a higher price for goods and
services indirectly due to a secret rebate comes within
the ambit of the statute. In addition to the clear wording
of the statute, we perceive a valid policy reason for our
holding. By encouraging ultimate consumers (tertiary level)
to bring lawsuits for violation of this section, the
perpetrators will evaluate risk differently. They may
decide that it is not worth the risk because of the chance
of having to pay treble damages under sec. 133.18(1).
OB-GYN, we conclude, has standing.

We therefore remand this case to the trial court for a
trial on the merits.[fn3]

By the Court. ? Judgment and order reversed and
cause remanded.

[fn1] Section 133.18(1), Stats., states: Any person
injured, directly or indirectly, by reason of anything
prohibited by this chapter may sue therefor and shall
recover threefold the damages sustained by the person and
the cost of the suit, including reasonable attorney fees.
Any recovery of treble damages shall, after trebling, be
reduced by any payments actually recovered under s. 133.14
for the same injury.

[fn2] The attorney general claims that Chapiewsky is too
narrow in scope and argues that injury to a competitor can
occur not only at the primary level but also the secondary
level (which in this case would be Landig).

[fn3] We asked the parties in preparing for oral argument to
discuss Roux Laboratories, Inc. v. Beauty Franchises,
Inc., 60 Wis.2d 427, 210 N.W.2d 441 (1973). We were
concerned that language in Roux could be read to state that
“per se” treatment should not be afforded in secret rebate
cases. Both OB-GYN and amicus argued that the Roux case is
not dispositive of the case before us. We agree. Even if it
were dispositive, the result in this case is not
inconsistent with Roux. Page 373