Exam 20: Antitrust Law

When rival firms agree to control output and raise prices, there is:

A collection of rival producers that come together by some form of agreement in an attempt to restrain trade by restricting output and raising prices is a:

Which of the following is a factor that the a court considers when using the rule of reason in antitrust cases:

A group of retail pharmacies sued J&J and other pharmaceutical makers for giving discounts on prescription drugs to "favored purchasers" in violation of the Robinson-Patman Act. The higher prices they paid made it more difficult to compete with favored purchasers. The appeals court held that the retail pharmacies:

A horizontal merger is when two competitor firms come together to form a new firm.

In Todd v. Exxon Corp., where Exxon other oil companies hired a consultant to gather information about the salaries they paid professionals at the companies, and the information was used to help set salaries, the appeals court held the practice was:

Andrea has a small shop that sells high quality purses and is located next to the mass retailer Purses-R-Us. Andrea is likely:

The antitrust standards of the European Union and the U.S. have been growing further apart in such things as exclusive dealing and territorial restrictions.

An attempt to monopolize trade, even if unsuccessful, may be a violation of the Sherman Act.

The FTC has the authority to do which of the following:

One of the reasons for passing the Sherman Act was to respond to the political unpopularity of big business.

A per se rule in antitrust means the practice is exempt from prosecution.

A tying arrangement occurs when:

Fact Pattern 20-2 Vysion produces TVs it sells nationwide. Vysion contracted with Karol's Appliances to make it the exclusive distributor of Vysion TVs in the San Diego area. Karol's received a promise that Vysion would not sell its TVs to any other retailer within 20 miles of Karol's. In its San Diego stores, Karol's has a unique pricing policy. A higher price is charged to customers wearing suits than to customers not wearing suits. Karol's salespeople give non-suit-wearing customers 10% discounts off of the list price, and refuse any discounts to suit-wearing customers. Don's, a rival of Karol's, asked Vysion to allow it to sell its products in San Diego. Vysion refused, pointing to its contract with Karol's. Vysion's distribution policy differs in New York from what it is in California. In New York, Vysion allows every distributor who asks to sell Vysion TVs. However, Vysion requires that New York retailers sign contracts stating that they agree not to sell Vysion products below prices in a monthly "price list" sent by Vysion. In contracts with its distributors nationwide, Vysion insists that sales of its TVs be tied to sales of its VCRs. No consumer is allowed to purchase a Vysion TV without also buying a Vysion VCR. -Refer to Fact Pattern 20-2. The contract signed by Vysion with Karol's Appliances that guarantees Karol will be the sole distributor of Vysion products in the San Diego area is:

The insurance industry is exempt from antitrust law so long as the states regulate it.

The Robinson-Patman Act concerns:

The Supreme Court has held that if two firms are potential competitors then there is a per se rule against a merger.

The banking industry is exempt from antitrust law so long as the states regulate it.

When a company uses the failing firm defense, it must show that alternatives have been tried and have not succeeded in saving the firm.

The classic example of a per se violation of antitrust law is: