Exam 33: Antitrust Law

Antitrust defendants often opt to settle government-brought antitrust actions by entering into a consent decree in a criminal action.

In the landmark case Exxon Mobil Corporation of Texas v.United States,the United States adopted the "rule of reason" standard for analyzing Section 1 of the Sherman Act cases.

The two (2)tests the United States Supreme Court has developed for determining the lawfulness of a restraint of trade are the rule of inquiry and the per diem rule.

Because the common law could not deal effectively with monopolies,the United States Congress enacted a comprehensive system of antitrust laws to limit anticompetitive behavior.

Section 1 of the Sherman Act outlaws contracts,combinations,and conspiracies in restraint of trade.

A group boycott occurs when two (2)or more competitors at one level of distribution agree not to deal with others at a different level of distribution.

Under Section 5 of the Federal Trade Commission Act,a party can be found guilty of an antitrust violation even when none of the antitrust acts is actually being violated.Is this fair? What is the purpose of this law?

The United States Supreme Court has applied the per se rule,but not the rule of reason,in determining the legality of vertical restraints of trade under Section 1 of the Sherman Act.

By definition,monopolies can impact the price of goods and services.

Which kind(s)of boycotts violate Section 1 of the Sherman Act?

Proof of actual lessening of competition must be shown in order to prevent a merger in action based on Section 7 of the Clayton Act.

Assume that in Colorado ski resorts can be classified as "large" and "small," and that there are twelve large and fifteen small resorts.Some owners own more than one resort.Assume that there are two owners,each of whom owns two large resorts,who plan to merge.Currently,each owner's two resorts have approximately fifteen to twenty percent of the Colorado ski market.Each owner's two resorts have about thirty to thirty-five percent of the Colorado Front Range "day-skier" market (people from the Colorado Springs,Denver and Fort Collins areas who drive to a resort,ski,and drive home all in one day).Assume that Colorado resorts combined have about forty percent of the Rocky Mountain ski market,and about fifteen percent of the national ski market.Will the merger be allowed,and what are the legal principles involved?

The Supreme Court leniently construes implied exemptions from antitrust law.

Price discrimination is unlawful even if it is in response to changing conditions in the market for goods.

Although the federal government has enacted antitrust laws,most antitrust actions are brought under state law.

Belinda markets a popular jacket that she sells to retailers for $80 per jacket.She markets the jackets on a nationwide basis.A competitor introduces to the market in Virginia and North Carolina a similar jacket that is sold to retailers for $70 per jacket.Belinda wants to reduce the price of her jacket in Virginia and North Carolina to only $60 per jacket.She asks your opinion as to whether she can do this,and whether she would have to reduce the price of the jacket in other states as well.Discuss the legal principles involved,and whether Belinda can reduce the price of the jackets to $60 in Virginia and North Carolina.

If the three (3)largest automobile manufacturers agreed among themselves what price they would pay to purchase tires from tire manufacturers,this would be buyers' illegal per se price fixing.

The per se rule holds that only unreasonable restraints of trade violate Section 1 of the Sherman Act.

All restraints of trade are unlawful.

A clothing maker requires the retailers it transacts business with to sell all of its clothing at a fixed minimum price.In examining a retailer's challenge to this practice,a court would: