In most cities, a Multiple Listing Service (MLS) is used by real estate agents to share information about properties on the market via a computerized database. Agents subscribe to the MLS to list the properties they represent, as well as to see information about other properties on the market.
Before 1992, there were 12 such MLS associations in San Diego, California. The associations bought data services from four different database operators. Eleven of the MLS associations decided to combine so that all subscribing agents would have access to all San Diego properties; the combined database would also cost less to maintain than separate databases. The new entity, owned by the 11 MLS associations, was called Sandicor.
The 11 associations continued to sign up agents and collect subscription fees, but Sandicor set the rules. No price cutting was allowed. When the MLSes compared costs, they discovered that the largest MLS spent $10 per month per subscriber, while two small ones spent $50 per month per subscriber. The fee for all was set at $44 per subscribing agent, paid to Sandicor. That price was less than the $50 cost per subscriber that the small operators incurred, so the lower-cost MLSes agreed to cover the losses that the smaller MLS associations incurred.

1. The appeals court held that competitors improperly rigged prices. Sandicor claimed that the quality of its data was better because all associations contributed data, and the subscribers got superior service. Why did that argument not matter?
2. Sandicor claimed that it helped competition because the smallest, highest-cost associations were kept in business because they were subsidized by the larger ones. Why was that argument rejected?