Exam 20: Antitrust Law

The Justice Department's merger guidelines states that the ability to maintain prices above the competitive level is evidence of market power.

The Dog Groomers of Arizona lobbies the Arizona legislature to impose strict licensing requirements on new groomers. These severely limit entry into the occupation, but allow existing groomers to stay in operation regardless of ability. The legislature passes the law. Under the antitrust laws this is likely to be:

To develop a network of dealers, Hummer vehicles are sold only at one dealership per city. Other dealers want the vehicles to sell, but are refused. The existing dealers earn high profit margins due to the lack of local competition. Under antitrust law, this arrangement is likely to be found:

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. If the MicroManage-Game Master merger is challenged as a violation of the Sherman Act, it will be challenged:

The Clayton Act prevents a corporation from acquiring another corporation if:

A controversial aspect of the Robinson-Patman Act is that it:

In U.S. v. United States Gypsum Co., involving the sharing of price information by members of an industry with each other, the Supreme Court held that exchanges of information are per se illegal.

A practice of engaging in price discrimination in different markets in an attempt to undercut competitors is known as:

Even if the purpose is anticompetitive, lobbying to influence a legislature is not illegal because:

When a company is accused of engaging in an illegal tying arrangement, it must be charged under the Sherman Act.

Price discrimination under Robinson-Patman is said to occur when different:

In Leegin Creative Leather Products v. PSKS, a maker of leather goods would not sell to stores that would not follow its pricing policy (resale price maintenance). The Supreme Court held that:

The Sherman Antitrust Act attacks the practice of exclusive dealing contracts.

Agreements that provide horizontal ____ are often held to violate antitrust law.

When retailers agree to sell a product at a price set by the producer there is resale price maintenance.

If a company imposing a tie-in has a market share of ____ in the market for the tying product, the use of tying will not be challenged.

In U.S. v. United States Gypsum, regarding sharing of price information by gypsum makers, the Supreme Court held that:

Which of the following is not an antitrust statute:

Market power is defined as:

You have a book publishing company. You own a paper mill, a printing operation, and a bindery. Within your firm you produce the paper for your books, print the manuscripts, bind the finished product, edit the authors' work, and sell the books. You refuse to deal with any companies that could supply you these services. What problem(s) do you most likely have with the antitrust laws? You face: