Since the early 1980s, there have been a number of manufacturers of in-board and stern-drive marine engines for motorboats. Stern-drive engines are used primarily in recreational powerboats known as runabouts and in cruising boats, which together make up about 40 percent of all recreational powerboats. The manufacturers start with standard automobile engine blocks, “maximize” and equip them with a drive system, and then sell the engines to boat builders for installation in brand-name boats that are sold to dealers. In 1983, Brunswick Corporation had a 75 percent share of the stern-drive engine market. In 1984, Brunswick and several of its competitors began to offer market share discounts to boat builders and dealers. From 1984 tso 1994, Brunswick offered a 3 percent discount to boat builders who bought 80 percent of their engines from it; a 2 percent discount for 70 percent of all purchases; and a 1 percent discount for 60 percent. From 1995 to 1997, Brunswick reduced the market share requirements so that the maximum 3 percent discount could be earned by buying 70 percent; 2 percent for 65 percent; and 1 percent for 60 percent. In 1989, Brunswick also offered long-term discounts of an additional 1 to 2 percent to anyone who signed a market share agreement for two or three years. The market share discounts were discontinued in 1997.

In 1986, Brunswick bought two of the largest boat builders based on its hope that the vertical integration would allow it to synergize engine manufacturing and boat building, resulting in a higher quality, less expensive product. From 1986 to 1997, the price of Brunswick’s engine increased from $4,775 to $4,985, fluctuating both upward and downward in the interim. In 1995, a number of boat builders filed an antitrust action against Brunswick. Did Brunswick’s cost discounting and vertical integration violate any antitrust laws? How should Brunswick defend against these charges? [Concord Boat Corp. v. Brunswick Corp., 207 F.3d 1039 (8th Cir. 2000).]