Exam 20: Antitrust Law

One of the main ways for a firm charged with violating the Robinson-Patman Act to defend itself is to show a(n) ____ for different prices charged in different markets or to different buyers.

One successful defense that some firms have recently used to argue that a merger should be allowed because the customers are large and sophisticated is called:

The courts use the rule of reason to decide many antitrust cases because:

Horizontal market division allows competing firms to:

Most copyrighted music is licensed for use by BMI and ASCAP (organizations that represent musicians, composers, and publishers of music). They charge set fees to music users through "blanket licensing," which does not allow music users to bargain over price. This was attacked as price fixing. The Supreme Court held the practice:

Fact Pattern 20-1 MicroManage is the fastest growing home-software producer in the country. In 2000, it sold 6% of all home software in the U.S., but in 2011, it sold 55% of all home software. A recent issue of Computer Universe said that MicroManage was "the most dominant and aggressive of all home-software developers." Home software is a small part of the entire software industry. In 2011, MicroManage proposed a merger with Game Master, its main rival. Game Master was responsible for 10% of all home-software sales in 2010. MicroManage's president says that the combination of the firms will allow MicroManage to lower costs and pass the savings on to its customers. The Department of Justice filed suit to stop this merger, claiming the combination would give monopoly power to the merged firm. Justice insists that consumers would lose in the end. -Refer to Fact Pattern 20-1. Which case might a court use as precedent to determine whether or not the MicroManage merger is legal?

Resale price maintenance is usually favored by:

Monopsony power is:

The Standard Oil Trust was found in violation of Section 1 of the Sherman Antitrust Act. That meant under a rule of reason, the Trust was guilty of monopolizing trade.

A(n) ____ occurs when firms competing at the same level of business reach an agreement to divide the market on geographic or other terms.

Under the ____ two firms that plan to merge must notify the Antitrust Division of the Department of Justice or the Federal Trade Commission at least one month before the planned merger, if there is more than $50 million involved.

As illustrated in State Oil Co. v. Khan, where a gasoline distributor controlled the maximum gas sales markup that its gas station dealers could charge (maximum price fixing), the Supreme Court has held that:

A retailer is told by the manufacturer the minimum price at which a product can be sold. In antitrust this is an example of:

Which of the following is probably an illegal boycott?

The Sherman and Clayton Act provide strict guidelines for what illegal monopolization is.

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 noted that:

The Sherman Act states that all contracts in restraint of trade are illegal.

Most copyrighted music is licensed for use by BMI and ASCAP (organizations that represent musicians, composers, and publishers of music). They charge set fees to music users through "blanket licensing," which does not allow music users to bargain over price. This was attacked as price fixing. The Supreme Court held the practice:

Lobbying members of the legislature to seek special favors for a competitor does not violate the antitrust laws.

Mayora is a retail clothing chain selling Pollo and other quality brand clothing. Mayora has very high prices, usually 30% over suggested retail price. Pollo tells Mayora it is fed up with this high pricing. Pollo tells Mayora to stop selling its products above list price or it will cut off sales to Mayora. Is this a possible violation of the antitrust laws?