Exam 42: Antitrust

Group boycotts are not prohibited by the Sherman Act.

Monopoly power is tested by determining how big the corporation is in terms of total assets.

Like the Sherman Act, Section 3 of the Clayton Act applies only to practices involving commodities, not to those that involve services, intangibles, or land.

Discuss the validity and effect of each of the following: a. Two manufacturers of the same product decide to allocate territories with one taking the southern states. b. A labor union encourages its members and all consumers to boycott a product manufactured by a company that refuses to honor a union contract. c. Betty's Bargain Department Store sells its products for 10% under the suggested retail price. One manufacturer tells the store it will not supply wholesale goods to it unless it charges at least the suggested retail price.

The validity, under antitrust law, of a joint venture depends on the competitors' purpose in forming it.

All tying arrangements are per se illegal.

If a seller of a product conditions its sale upon the buyer's purchasing a second product from the seller, this is known as a:

The Leegin Creative Leather Products, Inc. v. PSKS, Inc. case held that:

If United Widgets lowers its price to all buyers of 10 or more widgets because it costs United less to sell that quantity, it is not a violation of the Robinson-Patman Act.

Which of the following remedies is available under the Sherman Act?

Some group boycotts are illegal per se while others are subject to the rule of reason.

The common law traditionally:

Margaret tells the members of the Raleigh Association of Restaurant Owners that they will be able to get a better price on linen supplies (tablecloths, napkins) if they will deal with one supplier rather than split their business between two. They all know Margaret deals with Niagara Linen rather than Cayuga. Under the Sherman Act, if they all sign contracts with Niagara:

When the per se approach is inappropriate in a Section 1 Sherman Act case but the challenged conduct has obvious anticompetitive effects, courts may use an intermediate test which is a "quick look" rule of reason analysis.

W & W, Inc. manufactures and sells widgets. It sells widgets to Marklin of Marklin's Department Store and gives him a preference in pricing that discriminates against other retailers. Does Marklin have liability for price discrimination? Does W & W, Inc. have liability for price discrimination? Explain.

Three of the airline companies agree that they will not go any lower than $100 each way for coast-to-coast tickets. This is:

With tying arrangements, the courts may establish a seller's economic power by showing that:

Agreements by which the seller or lessor of a product conditions the agreement upon the buyer's or lessee's promise not to deal in a competitor's goods are:

Regarding Section 2 of the Sherman Act, the standard test applied by the courts requires proof of a specific intent to monopolize plus a dangerous probability of success; however, this test neither defines "intent" nor gives a standard of power by which to measure "success."

Creativ-Design, Inc. has 68% of the market share in a particular geographic region for one of its products. Does Creativ-Design have a monopoly? Explain.