ON PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT.
Petitioners, a conditionally certified class of beer retailers in the Fresno, Cal., area, brought suit against respondent wholesalers alleging that they had conspired to eliminate short-term trade credit formerly granted on beer purchases in violation of § 1 of the Sherman Act, ch. 647, 26 Stat. 209, as amended, 15 U. S. C. § 1. The District Court entered an interlocutory order, which among other things, denied petitioners' "motion to declare this a case of per se illegality," and then certified to the United States Court of Appeals for the Ninth Circuit, pursuant to 28 U. S. C. § 1292 (b),*fn1 the
question whether the alleged agreement among competitors fixing credit terms, if proved, was unlawful on its face.*fn2 The Court of Appeals granted permission to appeal, and, with one judge dissenting, agreed with the District Court that a horizontal agreement among competitors to fix credit terms does not necessarily contravene the antitrust laws. 605 F.2d 1097 (1979).*fn3 We grant the petition for certiorari and reverse the judgment of the Court of Appeals.
For purposes of decision we assume the following facts alleged in the amended complaint*fn4 to be true. Petitioners allege that, beginning in early 1967, respondent wholesalers secretly agreed, in order to eliminate competition among themselves, that as of December 1967 they would sell to retailers only if payment were made in advance or upon delivery. Prior to the agreement, the wholesalers had extended credit without interest up to the 30- and 42-day limits permitted by state law.*fn5 According to the petition, prior to the agreement wholesalers had competed with each other with respect
to trade credit, and the credit terms for individual retailers had varied substantially.*fn6 After entering into the agreement, respondents uniformly refused to extend any credit at all.
The Court of Appeals decided that the credit-fixing agreement should not be characterized as a form of price fixing. The court suggested that such an agreement might actually enhance competition in two ways: (1) "by removing a barrier perceived by some sellers to market entry," and (2) "by the increased visibility of price made possible by the agreement to eliminate credit." Id., at 1099.
In dissent, Judge Blumenfeld*fn7 expressed the opinion that an agreement to eliminate credit was a form of price fixing. Id., at 1104. He reasoned that the extension of interest-free credit is an indirect price reduction and that the elimination of such credit is therefore a method of raising prices:
"The purchase of goods creates an obligation to pay for them. Credit is one component of the overall price paid for a product. The cost to a retailer of purchasing goods consists of (1) the amount he has to pay to obtain the goods, and (2) the date on which he has to make that payment. If there is a differential between a purchase for cash and one on time, that difference is not interest but part of the price. See Hogg v. Ruffner, 66 U.S. (1 Black) 115, 118-119 . . . (1861). Allowing a retailer interest-free short-term credit on beer purchases effectively reduces the price of beer, when compared to a requirement that the retailer pay the same amount immediately in cash; and, conversely, the elimination of free credit is the equivalent of a price increase." Id., at 1103.
It followed, in his view, that the agreement was just as plainly anticompetitive as a direct agreement to raise prices. Consequently,
no further inquiry under the rule of reason, see National Society of Professional Engineers v. United States, 435 U.S. 679 (1978), was required in ...