General - Chapter 7 Lesson 2 Flashcards
Antitrust
any business activity that attempts to monopolize, contract, or conspire in a way that negatively impacts another’s ability to do business
Sherman Antitrust Act (1890)
first federal law outlawing practices considered harmful to consumers
Primary concern with the Sherman Antitrust Act is…
collusion
Early application of SAA: Restraint of Trade
unreasonably restrained trade subject to Sherman Antitrust Act
Early application of SAA: Rule of Reason
doctrine gives a court a degree of flexibility in determining the illegality of an act
Clayton Antitrust Act (1914)
enhance the SAA by prohibiting specific anticompetitive practices
CAA bans…
mergers and acquisitions + price discrimination that lesson competition and create monopolies
CAA provides…
more stringent penalties
CAA authorizes…
private parties to sue for damages when harmed by conduct that violates either Sherman or Clayton. Can lead to a court order prohibiting the business from further anticompetitive practices
Federal Trade Commission Act (1914)
created Federal Trade Commission (FTC), nation’s consumer protection agency
FTC mission
prevent business practices that are anticompetitive, deceptive, or unfair to consumers
enhance informed consumer choice and public understanding of the competitive process
accomplish fair competition without unduly burdening legitimate business activity
illegal per se
legal term means that particular act is defined as illegal through statute, constitution, or case law and so obviously harmful that detailed analysis of activity is not required
Examples of illegal per se
price-fixing
allocating customers or territories
tying agreements
boycotting
disparaging the competition
Price-fixing
antitrust violation that occurs when two or more competitors agree on an amount to charge for services or products
representation duration
version of price-fixing but instead with duration of representation agreements
market allocation
licensees from different brokerage firms agree to split their city into specific territories or handle properties within a certain price range or neighborhood
tie-in agreement
someone tries to make one transaction or agreement contingent on a second transaction or agreement
boycott
concerted refusal to deal with a particular party
Kelly and Rhianna are licensed sales associates at Malik Realty. One day over lunch with employing broker Malik, they agree that Buck’s Discount Real Estate is really hurting their commission earnings, so they decide not to show Buck’s listings to their buyer clients and focus on properties where the commission split is more generous. Are they guilty of group boycotting?
no, from the same brokerage
disparaging the competition
false, misleading, or negative comments about a competitor to a client, customer, or fellow licensee
