R8 Antitrust Law Flashcards
Under the Antitrust Laws, what does the term “illegal per se” connote?
The term “illegal per se” connotes anti competitive conduct or agreements that are inherently illegal and without legal justification (horizontal agreements)
What was the major impetus for enacting the Clayton Act?
to proscribe anti-competitive conduct in its incipiency (stop before it happens)
Under the Antitrust laws, what does the term “rule of reason” connote?
The rule of reason is the balancing test used to determine whether contracts, combinations, attempts to monopolize etc., unreasonable restrain trade and so violate the antitrust laws. Courts will consider factors such as:
- Nature of the business involved
- The defendant’s position in the industry (minor or major player)
- How the restraint will affect the industry, and
- The purported goal of the restraint (to achieve economies of scale vs. to stifle competition)
Under the Antitrust Laws, what are “horizontal restrains”?
Horizontal restrains involve agreements between industry player that are on the same marketing level (agreements between two competing manufacturers or between two competing retailers). Horizontal restrains are generally illegal per se
Under the Antitrust Laws, what does the term “vertical restrain” means?
Vertical restrains are agreements between industry players that are on different marketing levels (an agreement between a manufacturer and a retailer) they are generally judged under the rule of reason
Backward vertical merger - firm acquires supplier
Forward vertical merger - firm acquires customer
What is the Sherman Act?
Prohibits retrains of trade and monopolies
Section 1 - Restrains of trade: Balance anti-competitive and competitive effects including concentration actions, price fixing, market allocations, boycotts, tying arrangements, joint ventures and trade associations
Section 2 - Restrains of monopoly and attempts to monopolize if a company has a market share of more than 70% it is considered a monopoly
