Chapter 14: Anitrust Law Flashcards
The Sherman Act
Passed to eliminate certain restraints of trade and monopolistic behaviors
Sherman Act Section 1
a. Applies to actions by two or more individuals or entities
b. Every contract, combination, and conspiracy in restraint of trade in interstate commerce is illegal.
Sherman Act Section 1 established two test to determine wrong doing
Per se test
Rule of reason test
a. Per se test –
defendant has no justification and no defense (Defendant is liable as a matter of law)
b. Rule of reason test –
Defendant must prove to a court a pro-competitive business justification for the acts. Otherwise the defendant is liable
Horizontal Violations
Agreements made among competitors at the same level of distribution (Coke and Pepsi)
Vertical VIolation
apply to agreements made among those in the vertical chain of distribution (McDonalds and potato farmer)
Per se test Horizontal Violations -
Price fixing
Division of markets
Goup boycotts
Rule of Reason horizontal violations
Any behavior other than price fixing, division of markets and group boycotts (trade association activities & rules, Exchange of non-price information, participation in joint ventures)
Per Se Vertical Violations -
Resale price maintenance
Minimum resale price fixing is a per se illegal
Maximum resale price fixing is a rule of reason violation
non price vertical restraints
collage doctrine
Noerr Doctrine
Sherman Section 2
it is illegal for every person to monopolize, attempt to monopolize, or combine or conspire with others to monopolize
relevant product market
availability of substitutes is issue here
Relevant geographic market
availability of substitutes is issue here
monopoly power
the power to control price or exclude competition
intent to monopolize or attempt to do so
general intent for monopolization
