Antitrust Laws and Violations Common in Real Estate

Question 1

What are antitrust laws?

Answer 1

State and federal laws designed to maintain and preserve business competition. These laws are based on the belief that free enterprise and healthy competition are good for individual consumers as well as the economy

Question 2

What 3 parameters are needed to violate an antitrust law regarding a business activity?

Answer 2

1. There is a monopoly, a contract, a conspiracy, or a combo of such
2. The existence of the monopoly or conspiracy creates a restraint of trade - which is a negative impact on an individual’s or a company’s ability to do business
3. The restraint of trade unreasonably restricts competition and functions against the public interest

Question 3

What is the Sherman Antitrust Act of 1890?

Answer 3

It’s the principal federal statute that covers competition. It’s one of the most important pieces of antitrust legislation.

Question 4

What do state and federal antitrust laws prohibit brokers from?

Answer 4

Price fixing: collusion b/t or among members of a particular trade to maintain prices at a set level

Group boycotts: agreement b/t or among members that would prevent other members from fair participation in the trade’s activities

Market allocation: to avoid doing business in specific market areas

Tie-in arrangements: to purchase additional or unrelated products or services when making a product purchase

Question 5

What was the Clayton Antitrust Act of 1914 designed to do?

Answer 5

To cover restraints on interstate trade of commerce that aren’t covered under the Sherman Antitrust Act. This included preventing individuals from serving as directors at competing companies.