Topco is a cooperative association of 25 smalland medium-sized regional supermarket chains that operate in 33 states. To compete with large supermarket chains, Topco buys and distributes for its...

Topco is a cooperative association of 25 smalland medium-sized regional supermarket chains that operate in 33 states. To compete with large supermarket chains, Topco buys and distributes for its members quality merchandise under private labels. Each member of the cooperative has to sign an agreement promising to sell Topco-brand products only in a certain designated territory. The government sued Topco, claiming it was horizontally dividing markets in violation of Section 1 of the Sherman Act. The defendant argued that this territorial restriction was necessary to compete with large chains. Who won this case and why?