BLAW CH 47
Treble Damages: ____ the damages they suffered as a result of the violation.
3x
In _________________________ trade associations can be used as a means to facilitate anticompetitive actions, such as price fixing or allocating markets.
Concentrated Industries
A _________________________ is one in which a single firm or a small number of firms control a large % of market sales.
Concentrated Industry
________________: Agreement between two or more sellers to refuse to deal with a particular person or firm. These are _________ violations of the Act.
Group Boycott, per se
________________ Mergers occur between firms at the same level in the production and distribution chain. __________ Mergers occur between firms at different levels in the production and distribution chain.
Horizontal, Vertical
____________ Market Division: Occurs when competitors in the same market agree that each will have exclusive rights to operate in a particular geographic area. these divisions are ______ violations of the Act.
Horizontal, per se
__________________ (Section 8): Occurs when an individual serves on the board of directors of two or more competing companies simultaneously. These are prohibited if the two firms meet certain size requirements.
Interlocking Directories
Section 2 of the Sherman Antitrust Act deals with:
Monopolization. Attempts to monopolize.
_________________: Exists when one firm has sufficient market power to control prices and exclude competition. As a rule of thumb, if a firm has 70% or more of a relevant market, it is regarded as this
Monopoly Power
_________________: Attempt by a firm to drive its competitor from the market by selling its product at prices substantially below the normal costs of production. Once the competitors are eliminated, the predator presumably will raise its prices far above their competitive levels to recapture its losses and earn higher profit.
Predatory pricing
Clayton Act: The Clayton Act deals with:
Price Discrimination. Exclusionary Practices. Mergers. Interlocking Directorates.
_______________________________ - An agreements between a manufacturer and a distributor or retailer in which the manufacturer specifies the retail price at which retailers must sell products furnished by the manufacturer or distributor. This is a type of vertical restraint and is normally a per se violation.
Resale Price Maintenance Agreements
____________________ is applied to determine if a violation of the Act has occurred.
Rule of reason
____________ regulates what are called "horizontal" and "vertical" restraints.
Section 1
Private Actions: Private party injured under the Sherman or Clayton Act can: ____ for damages and attorney's fees. • Plaintiff must prove: • Antitrust violation either caused or was a substantial factor in plaintiff's injury, and the unlawful actions of Defendant affected Plaintiff's business protected by antitrust laws.
Sue
_________________________ - Imposed by manufacturers on the sellers of the products, to insulate dealers from direct competition with each other. These are judged under the rule of reason.
Territorial or Customer Restrictions
________________________ are industry specific organizations created to provide for the exchange of information, representation of the business interests before governmental bodies, advertising campaigns, and setting of regulatory standards to govern their industry or profession. They work together all the time.
Trade Associations
_____________________ are per se anticompetitive agreements imposed by Sellers upon Buyers (or vice versa) that may include affiliates in the entire supply chain of production. Agreements between firms at different levels of the manufacturing and distribution process.
Vertical restraints
______________________ may restrain competition among firms that occupy the same level in chain. those that significantly affect competition may be per se violations.
Vertical restraints
Per se violations vs. the Rule of Reason Per se are blatant and substantially _________________. Rule of reason agreements do not _____________________ trade.
anticompetitive, unreasonably restrain
Exclusionary Practices (Section 3): Prohibits: • Exclusive Dealing Contracts: A contract under which a seller forbids a buyer to purchase products from the seller's _______________. Prohibited if the effect of the contract is to "substantially lessen competition or tend to create a monopoly." • ______________________: The conditioning of the sale of a product on the buyer's agreement to purchase another product produced or distributed by the same seller.
competitors, Tying Arrangements
Price Discrimination (Section 2): Price discrimination is the charging of _______________ to competing buyers for identical goods.
different prices
Defenses to Price Discrimination: 1. Cost Justification - If the seller can justify the price reduction by demonstrating that a particular buyer's purchases saved the seller costs in producing and selling the goods, the seller won't be liable for price discrimination. 2. Meeting the Price of competition - If seller charged lower price in good faith to meet an _____________ price of a competitor 3. Changing Mkt Conditions - Seller may lower price on an item in response to changing conditions ______________________ for or the marketability of the goods concerned.
equally low, affecting the mkt
Price Fixing: An agreement between competing firms in the market to set an _______________________ for the goods or services they offer.
established price
Attempts to Monopolize: Firm actions are scrutinized to determine whether they were intended to ____________________________ and garner monopoly power and had a "dangerous" probability of success.
exclude competitors
Section 2: • Applies both to an _____________________ and to several people, because it refers to every person. • Deals with the structure of _________________ in the marketplace. • Looks at the so-called misuse of monopoly power in the power in the marketplace
individual person, monopolies,
To violate Section 2 (price discrimination), the seller must be engaged in _____________ commerce, the goods must be of like grade and quality, and the goods must have been sold to __________ purchasers, the effect of the price discrimination must be to substantially lessen competition, tend to create a monopoly, or otherwise injure competition.
interstate, 2 or more
A __________________ is an undertaking by two or more individuals or firms for a specific purpose. The rule of reason is applied to analyze the agreement if the venture has first been found not to involve price fixing or market divisions.
joint venture
Mergers (Section 7): A crucial consideration in most merger cases is ____________________. Involves allocating % mkt shares among the various companies in the relevant mkt. When a small # of companies share a large part of the mkt, the mkt is concentrated.
market concentration
Intent Requirement: The intent to monopolize is difficult to prove. Intent may be inferred from evidence that the firm had ____________________ and engaged in anticompetitive behavior.
monopoly power
Monopolization: Monopolization in violation of the act requires two elements: • The possession of ______________ • The willful acquisition or maintenance of the power as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident.
monopoly power
To violate sect. 2, a plaintiff must prove both elements -
monopoly power and intent to monopolize
Ex: Cardizem Case - Manufacturer of the prescription drug Cardizem CD, can help prevent heart attacks, was about to lose its patent on the drug. Another company had developed a generic version in anticipation of the patent's expiration. After the 2 firms become involved in litigation over the patent, the 1st company agreed to pay the 2nd company $40m per year not to market the generic version until their dispute was resolved. This was a per se violation because it restrained competition between rival firms and delayed entry of generic versions of Cardizem into the market.
ok
Price fixing is a _________ violation of the Act.
per se
Antitrust Law Focus-restraint of trade to ____________________ Not "a big company is a bad company." Focus- market forces should promote competition, not stifle it
public detriment
Before a court can determine whether a firm has a dominant market share, it must define the ____________. Consists of 2 elements: (1) a relevant product market and (2) a relevant geographic market.
relevant market
Horizontal Restraints: Horizontal restraints are agreements among Sellers (or Buyers) that __________________________ between rival firms competing in the same market.
restrain competition
(1) Relevant Product Market - includes all products that, although produced by different firms, have identical attributes such as sugar. Also includes products that are reasonably interchangeable for the purpose for which they are produced. Products are reasonably interchangeable if consumers treat them as _______________. Ex: Whole Foods Case - Whole foods wished to acquire Wild Oats Mkts, its main competitor in organic supermarkets. FTC filed a sect. 2 claim to prevent the merger. FTC argued that the relevant product mkt consisted of only "premium natural and organic supermkts" rather than all supermkts, as Whole Foods maintained. Court found FTC correct and whole foods sold 13 stores which were formerly Wild Oats.
substitutes
Exceptions to price discrimination: • Charge of lower price was _____________ and in good faith to meet another seller's equally low price to the buyer's competitor. • A particular buyer's purchases saved the seller costs in producing and selling the good.
temporary
Sherman Antitrust Act: Major Provisions of the Sherman Act: 1. Every contract, combo in the form of _____ or otherwise, or conspiracy, in _________ of trade or commerce among the several states, or w/ foreign nations, is hereby declared to be illegal. 2. Every person who shall monopolize, or attempt to ________________, or combine or conspire w/ any other person or persons, to monopolize any part of the trade or commerce among the several states, or w/ foreign nations, shall be deemed guilty of a felony. Section 1 and 2 contain the main provisions of the Sherman Act.
trust, restraint, monopolize
Section 1: • Requires ____________ persons, as a person cannot contract, combine, or conspire alone. • Concerned with finding an ________________. • Focuses on agreements that are _______________ (agreements that have a wrongful purpose)
two or more, agreement, restrictive
