Ch. 46 Antitrust Law and Unfair trade practices
cost justification defense
a defense in a section 2(a) action which provides that a sellers price discrimination is not unlawful if the price differential is due to "differences in the cost of manufacture, sale, or delivery" of the product
meeting the competition defense
a defense provided in section 2(b) of the Robinson-Patman act that says a seller may lawfully engage in price discrimination to meet a competitors price
section of the country
a division of the country that is based on the relevant geographical market, the geographical area that will feel the direct and immediate effects of a merger
noew doctrine
a doctrine which says that two or more persons can petition the executive, legislative, or judicial branch of the government or administrative agencies to enact laws or take other action without violating antitrust laws
conscious parallelism
a doctrine which states that if two or more firms act the same but no concerted action is shown, there is no violation of section 1 of the sherman act
federal trade commission (FTC)
a federal government administrative agency that is empowered to enforce the federal trade commerce act
section 2 of the clayton act (robinson-patman act)
a federal statute that prohibits price discrimination in the sale of goods if certain requirements are met
indirect price discrimination
a form of price discrimination that is less readily apparent than direct forms of price discrimination
governmental judgment
a judgment obtained by the government against a defendant for an antitrust violation that may be used as prima facial evidence of liability in a private civil treble damages action
market extension merger
a merger between two companies in similar fields whose sales do not overlap
horizontal merger
a merger between two or more companies that compete in the same business and geographical market
conglomerate merger
a merger that does not fit into any other category; a merger between firms in totally unrelated businesses
vertical merger
a merger that integrates that operations of a supplier and a customer
retail price maintenance (Vertical price fixing)
a per se violation of section 1 of the sherman act that occurs when a party at one level of distribution enters into an agreement with with a party at another level to adhere to a price schedule that either sets/stabilizes prices
changing conditions defense
a price discrimination defense that claims prices were lowered on response to changing conditions on the market for or the marketability of the goods
relevant product of service market
a relevant market that includes substitute products or services that are reasonably interchangeable with the defendants products or services
relevant geographical market
a relevant market that is defined as the area in which the defendant and its competitors sell the product or service
tying arrangement
a restraint of trade in which a seller refuses to sell one product to a customer unless the customer agrees to purchase a second product from the seller
division of markets (market sharing)
a restraint of trade in which competitors agree that each will serve only a designated portion of the market
group boycott (refusal to deal)
a restraint of trade in which two or more competitors at one level of distribution agree not to deal with others at another level of distribution
price fixing
a restraint of trade that occurs when competitors in the same time of business agree to set the price of the goods or services they sell, raising, depressing, fixing, pegging, or stabilizing the price of a commodity or service
horizontal restraint of trade
a restraint of trade that occurs when two or more competitors at the same level of distribution enter into contract, combination, or conspiracy to restrain trade
vertical restraint of trade
a restraint of trade that occurs when two or more parties on different levels of distribution enter into a contract, combination, or conspiracy to restrain trade
per se rule
a rule that is applicable to restraints of trade considered inherently anticompetitive. the court will not permit any defenses or justifications to save it once determination is made
rule of reason
a rule which holds that only unreasonably restraints of trade violate section 1 of the sherman act. the court must examine the pro and anticompetitive effects of a challenged restraint
section 1 of the sherman act
a section that prohibits contracts, combinations, and conspiracies in restraint of trade
section 2(A) of the Robinson-Patman act
a section that prohibits direct and indirect price discrimination by sellers of a commodity of a like grade and quality, where the effect of such discrimination may be to substantially lessen competition or to tend to create a monopoly in any line of commerce
section 2 of the sherman act
a section that prohibits monopolization and attempts or conspiracies to monopolize trade
section 5 of the FTCA
a section that prohibits unfair methods of competition and unfair or deceptive acts or or practices in or affecting commerce
section 4 of the clayton act
a section which provides that anyone injured in his or her business or property by the defendant's violation bring a private civil action and recover from the defendant treble damages plus reasonable costs and attorneys' fees
section 7 of the clayton act
a section which provides that it is unlawful for a person or business to acquire the stock or assets of another "Where in any line of commerce or in any activity affecting commerce in any section of the country, the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly.
antitrust laws
a series of laws enacted to limit anticompetitive behavior in almost all industries, businesses, and professions operating in the united states
unilateral refusal to deal
a unilateral choice by one party not to deal with another party
backward vertical merger
a vertical merger in which a customer acquires a supplier
forward vertical merger
a vertical merger in which a supplier acquires a customer
act of monopolizing
an act that is required to find a violation of section 2 of the sherman act. possession of monopoly power without such act does not violate section 2.
section 3 of the clayton act
an act that prohibits tying arrangements involving sales and leases of goods
hart-scott-rodino antitrust improvement act
an act that requires certain firms to notify the federal trade commission and the justice department in advance of a proposed merger
state action exemption
business activities that are mandated by state law and are therefore exempt from federal antitrust laws
treble damages
damages that may be awarded in a successful civil antitrust lawsuit, in an amount that is triple that amount of actual damages
statutory exemptions
exemptions from antitrust laws that are expressly provided in statutes enacted by congress
implied exemptions
exemptions from antitrust laws that are implied by the federal courts
direct price discrimination
price discrimination in which 1) the defendant sold commodities of lie grade and quality, 2) to two or more purchasers at different prices at approximately the same time, and 3) the plaintiff suffered injury because of the price discrimination
nonprice vertical restraints
restraints of trasde that are unlawful under section 1 of the sherman act if their anticompetitive effects outweigh their pro competitive effects
monopoly power
the power to control prices or exclude competition, measured by the market share the defendant possesses in the relevant market
probability of a substantial lessening of competition
the probability that a merger will substantially lessen competition or create a monopoly, in which case the court may percent the merger under section 7 of the clayton act
line of commerce
the products or services that will be affected by a merger, including those that consumers use as substitutes. if an increase on the price of one product or service leads consumers to purchase another product or service, the two products are substitutes for each other
