Dee Frost,president of the American Refrigerator and Freezer Producers Association

Essay

Dee Frost,president of the American Refrigerator and Freezer Producers Association (ARFPA)and CEO of Frozenaire Corp.(one of the nation's largest manufacturers of refrigerators and freezers),delivered the keynote address at the ARFPA's annual convention in Siberia,Montana.In her speech,Frost addressed the assembled members on the "credit sales" problem currently confronting the industry.According to Frost,this problem was a result of refrigerator and freezer manufacturers' increasing tendency to sell appliances on credit instead of requiring payment in full upon delivery-a tendency that,in Frost's view,had led to negative price trends in the industry.Frost asserted that if refrigerator and freezer producers would refuse to permit credit sales and would insist upon payment in full upon delivery,prices would return to "a reasonable level that serves the interests of the industry and consumers." She concluded her remarks by assuring those in attendance that Frozenaire would do its part by "unilaterally saying 'sorry,pardner' to requests for purchases on credit." A few months after the ARFPA meeting,the U.S.Justice Department filed a Sherman Act Section 1 lawsuit against Frozenaire and the other ARFPA members,citing evidence that all ARFPA members eliminated credit sales within one month after the meeting.Is the Justice Department's action proper? Explain your reasoning.