Chapter 22: Antitrust Law and Promoting Competition
The Association of Organic Food Growers, which does not include all organic farmers and ranchers, refuses to deal with any parties who do not carry the products of its members. This group boycott is a situation that neither restrains trade nor harms competition. a legal restraint of trade. a per se violation of antitrust law. subject to analysis under the rule of reason.
a per se violation of antitrust law.
Thermo Gas, Inc., and Uno Oil Corporation refine and sell gasoline and other petroleum products. To limit the supply of gas on the market and thereby raise prices, Thermo Gas and Uno Oil agree to buy "excess" supplies from dealers and "dispose" of it. This is subject to analysis under the rule of reason. a deal that neither restrains trade or harms competition. a legal restraint of trade. a per se violation of the Sherman Act.
a per se violation of the Sherman Act.
Bodycare Corporation makes and sells ChemMed, the most prescribed name-brand blood pressure-lowering medication. Deja Vu Drugs, Inc., has the potential to make a generic version of the same drug. Bodycare pays Deja Vu not to sell its product. This is: a market division. an exclusive-dealing contract. a refusal to deal. a price-fixing agreement.
a price-fixing agreement.
To acquire monopoly power in its market, Global Condiments, Inc., sets its prices substantially below the normal costs of production. Under antitrust law, this is a violation if the firm's competitors set similar prices. a per se violation. a violation if the firm thereby acquires monopoly power. not a violation.
a violation if the firm thereby acquires monopoly power.
Frozen Confections Corporation makes and sells ice cream under a variety of brand names. Frozen wants to merge with Grocers Products Company, its main competitor. In considering a challenge to the deal, a court looks at the relevant product market. This most likely includes ice cream and products that are not identical but are related, such as spin-offs. products with identical attributes only. no other products. products that are reasonably interchangeable.
products that are reasonably interchangeable.
HVAC Parts Company charges different buyers different prices for identical goods. HVAC's prices are subject to evaluation under the Federal Trade Commission Act. the Sherman Act. no antitrust law. the Clayton Act.
the Clayton Act.
Frictionless Lubricant Corporation and Grease Inc. are the principal suppliers of their product in their market. They agree that Frictionless will sell exclusively to retailers and Grease will sell exclusively to wholesalers. Under antitrust law, this market division is most likely a violation only if their competitors make similar deals. a per se violation. a violation only if their customers agree to honor the deal. not a violation.
a per se violation.
Rugged Bikes, Inc., makes and distributes Rugged-brand bicycles and accessories to authorized dealers, including Super Sports Stores, Inc. Super Sports operates dealerships in several locations. To insulate other dealers from direct competition, Rugged Bikes imposes limits on where Super Sports can sell Rugged products. This is a price-fixing agreement. a resale price maintenance agreement. a unilateral refusal to deal. a territorial restriction.
a territorial restriction.
Glassworx Corporation has exclusive control over the market for its products. Under antitrust law, this is not a violation. a violation if it acquired this power through "anticompetitive means." a per se violation. a violation if it acquired this power through "business judgment."
a violation if it acquired this power through "anticompetitive means."
To prevent its competitors from obtaining sufficient supplies to make their products, Continental Steel, Inc., uses its market power to increase the prices of those supplies. This is predatory bidding. price discrimination. predatory pricing. business judgment.
predatory bidding.
Fiesta Food Company, Gourmet Cheeses, Inc., and Healthy Eats, Inc. agree to exchange information and share advertising. This trade association agreement is a legal restraint of trade. a deal that inherently neither restrains trade nor harms competition. a per se violation of antitrust law. subject to analysis under the rule of reason.
subject to analysis under the rule of reason.
Soft Drink Corporation is charged with violating the Sherman Act through conduct subject to the rule of reason. When applying the rule of reason in this situation, a court will not consider the purpose of the agreement. the potential effect of the agreement on competition. the parties' market ability to implement the agreement. the effect of the agreement on international trade.
the effect of the agreement on international trade.
Dredgers, Inc., is the major wholesale distributor of heavy equipment in the state of Georgia. Its closest competitor is Excavators Company, another Georgia firm. The two firms agree that Excavators will operate in southern Georgia and Dredgers will operate in northern Georgia. This is a price-fixing agreement. a tying arrangement. a group boycott. a market division.
a market division.
Gaucho Ranchland Supplies Corporation believes that Vaquero Stock & Equipment Corporation engages in anticompetitive behavior in an attempt to drive Gaucho, its chief competitor, out of the market. Antitrust laws can be enforced against Vaquero by Gaucho. only a disinterested third party. Congress. none of the choices.
Gaucho.
Gearbox, Inc., a manufacturer of vehicle parts, refuses to sell to Motor Repair & Replace, Inc., a national vehicle service firm. Gearbox convinces Cam & Cylinder Company, a competitor, to do the same. This is a group boycott. a tying arrangement. a market division. an exclusive-dealing contract.
a group boycott.
