Ch 21 Regulating the Competitive Environment

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In keeping with the litigious character of the American legal system, U.S. antitrust laws: I. Are stated in general terms. II. The details are to be worked out through administrative regulations a) I only b) II only c) Both I and II d) Neither I or II

a

The court that hears appeals from the EU's antitrust enforcement agency and referrals from the courts of the EU member states on competition issues is the: a) European Court of Justice. b) Community Supreme Court. c) European Court of Appeals. d) Antitrust Appellate Court.

a

The U.S. antitrust law distinguishes betwee that are: a) Per se wrong and actions to which the role of reason applies. b) Marginally wrong and actions to which the rule of reason applies. c) Partially wrong and actions to which the rule of best judgment applies. d) Good and bad.

a) Per se wrong and actions to which the role of reason applies

Under U.S. antitrust law, the rule of reason applies to situations where: a) A person must decide to bring a lawsuit or not. b) Through analysis, an action is not found to be anticompetitive. c) The amount of damages awarded is reasonable. d) A merger is anticipated and valid if reasonable.

b

EU competition law applies only to agreements and transactions that:

Have an effect on intra-EUC trade.

The European Union's enforcement agency in antitrust matters, which is analogous to the U.S. Federal Trade Commission and Justice Department, is the:

Commission of the European Union.

Antitrust laws have been enacted in all of the WTO members after World War II. True/False

False

Article 85 of the Treaty of Rome is similar to Section 1 of the U.S. Sherman Act in prohibiting concerted anticompetitive conduct in very general terms.

False

European courts addressing a patent issue are generally more favorable to patent holders than U.S. courts True/False

False

Foreign competition law is similar in substance are modeled after American antitrust law and similar in the sanctions for violating the law True/False

False

In smaller countries, there tends to be a relatively lower tolerance for market domination. True/False

False

In the Hartford Fire Insurance Co.case, the U.S. Supreme Court determined that it could not assert jurisdiction over European companies in competition matters unless the companies had a direct physical presence in a U.S. state. True/False

False

Patent licenses are not covered by the Commission of the European Union block exemptions True/False

False

Prohibitions against agreements that restrict competition are the least relevant to international transactions. True/Flase

False

The European Commission is even less flexible with respect to know-how transfer agreements than it is to patent licenses. True/False

False

The European Court of Justice has shown little reluctance to find competition conspiracies between a European subsidiary and its American parent. True/False

False

The European Parliament has criticized the European Commission for its flexible approach in the granting of block exemptions from normal competition rules for vertical agreements True/False

False

The European Union's sophisticated antitrust law is based on and implemented through Article 1 and Article 2 of the Clayton Act. True/False

False

The Europeans have structured their system to provide for resolution of competition law issues after the transaction has taken place, typically through litigation True/False

False

The Tetra Laval BV v. Commission of the European Communities case applied correctly the "leveraging" theory in the rejection of the merger of Tetra Laval and Sidel that would horizontally and vertically dominate the plastic bottle plugs industry. True/False

False

The Tetra Laval BV v. Commission of the European Communities case stands for the proposition that when market dominance is abused by a foreign entity, local courts and regulators are likely to respond with particular force. True/False

False

The U.S. has an analogous system to the European Union's system for resolving antitrust law issues prior to the transaction taking place True/False

False

The antitrust laws of the European countries developed much earlier and were the model for the antitrust legislation in the United States. True/False

False

Under the European Commission's block exemption, the parties whose agreements fall under certain exempted categories only have to seek de minimisapproval for their transactions to be considered exempt under competition law. True/False

False

The substance of many countries' antitrust law is very similar in focusing on two types of activity. The two types of activities are:

Prohibitions against agreements attempting to restrict competition and the abuse of a dominant market position.

A clawback provision allows a foreign company to sue in their own country to recover against local American assets all or part of an antitrust judgment rendered in the U.S. True/False

True

American policy tends to be more forgiving of a patent holder's restrictions than the European Commission. True/False

True

Antitrust law in the European Union are implemented by the Commission of the European Communities and are known as competition law True/False

True

Due to the fact that foreign competition law violations offer few, if any, damage awards, there is very little private litigation True/False

True

Prohibitions against agreements that restrict competition in the United States by the Justice Department are reviewed in the context of determining such an arrangement would enhance or inhibit a competitive market place. True/False

True

The Airtours v. Commissioner of European Communities case involved the question of whether a merger would create a "collective dominant" business firm.

True

The European Union's competition law exemption system functions very much like the American antitrust law rule of reason True/False

True

The Europeans tend to be reluctant to apply their competition law to activity outside the EU. True/False

True

The Europeans view the monopoly in a patent as a danger to competition that should be minimized as much as possible True/False

True

The U.S. antitrust laws apply to the conduct of U.S. firms outside the territorial boundaries of the United States. True/False

True

The U.S. takes the position that a patent monopoly is essential to protect the patent holder and encourage innovation. True/False

True

The analytical framework established by American antitrust law distinguishes between actions that are wrong per se and actions to which the rule of reason applies True/False

True

The form of antitrust laws are enacted based on the particular circumstances of each nation and therefore are not uniform True/False

True

The form of antitrust laws differs substantially from nation to nation. True/False

True

Through what is called a block exemption, the European Commission grants an automatic competition exemption to a variety of different types of transactions and agreements. True/False

True

The 1982 act passed by Congress in order to clarify the standard to be applied in determining the extraterritorial effect of American antitrust law provides that: a) American antitrust law extends to all countries that do not have enforceable antitrust laws of their own. b) American antitrust law does not apply outside the U.S. c) American antitrust law applies only to conduct that has a direct, substantial, foreseeable effect on U.S. commerce. d) American antitrust law applies only to firms whose economic power is so substantial that they could directly and significantly dominate foreign markets.

c

The primary reason for the absence of much litigation under foreign competition law is: I. The preapproval process reduces the necessity for litigation. II. Differences in the remedies and types of sanctions for violations. III. Cultural attitudes toward antitrust law differ a) I only b) II only c) III only d) I and II e) I, II, and III

c

When evaluating the effect of a merger, the European Union seeks to determine: a) the impact of the merger by totaling the total number of competitors left. b) amount of capital invested in the combined companies in relation to the remaining competitors c) The compatibility of the merger with the common market, which is presumed if market share will not exceed 25 percent d) none of these are correct

c

The European Union regulation that deals with "A concentration which creates or strengthens a dominant position...(impeding) competition...in the common market..." is: a) EU Antitrust Act b) EU Workers Regulation c) EU Unfair Trade Regulation d) EU Merger Regulation

d


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