1. Antitrust Law

Antitrust Law

Playlist: 24 Videos: 65 Minutes



Topics: Learning Material

Introduction to Antitrust Law
Antitrust law concerns the regulation of certain business practices that result in lower levels of competition among businesses in the market. A lower level of competition in a given market is generally understood to be detrimental to consumer interests. It can cause higher prices and shortages in supply or availability of products. This chapter introduces antitrust law and the primary federal statutes providing consumer protections. It then examines the various types of conduct or situations that are deemed illegal under these laws. For further written and video explanation, discussion and practice questions, see Antitrust Law (Intro)

What is “Antitrust Law”?
  • Federal and state laws that seek to promote competition among businesses
  • Benefits consumers,
  • Practices by businesses employing trusts to monopolize industries and thwart competition.

For further written and video explanation, discussion and practice questions, see What is "antitrust law"?

Major Antitrust Laws
  • The Sherman Act of 1890,
  • The Clayton Act of 1914, and
  • The Federal Trade Commission Act of 1914.

For further written and video explanation, discussion and practice questions, see What are the Major Antitrust Laws?

Government Agencies Enforce Antitrust Law
  • The Federal Trade Commission (FTC)
  • Protect consumers by preventing anticompetitive business practices.
  • Issues trade regulations
  • Determines what is “unfair”

For further written and video explanation, discussion and practice questions, see What government agency enforces antitrust law?

Sherman Act of 1890
  • Contracts, combinations, or conspiracies in restraint of trade or commerce, and
  • Monopolies and attempts to monopolize.

For further written and video explanation, discussion and practice questions, see What is the "Sherman Act of 1890" (Sherman Act)?

Clayton Act of 1914
  • Preventing early-stage anticompetitive practices.
  • Focused on regulating conduct to prevent harm from occurring.

For further written and video explanation, discussion and practice questions, see What is the "Clayton Act of 1914" (Clayton Act)?

Federal Trade Commission Act of 1914
  • Created the Federal Trade Commission,
  • Primary responsibility for enforcing the Sherman Act, Clayton Act, and the regulatory provision of the FTC
  • FTC pursues civil remedies, while the Department of Justice enforces the criminal (and some civil) provisions

For further written and video explanation, discussion and practice questions, see What is the "Federal Trade Commission Act of 1914"?

“Contract, Combination, or Conspiracy” restraining trade
  • Section 1 of the Sherman Act prohibits “contracts, combinations, and conspiracies in restraint of trade or commerce”,
  • does not define these types of agreements.
  • generally broken into “vertical restraints” and “horizontal restraints” of trade.

For further written and video explanation, discussion and practice questions, see What is a "Contract, Combination, or Conspiracy" in restraint of trade?

“Per Se Illegality” and the “Rule of Reason”
  • Per Se Illegal - A “naked restraint” of trade i
  • Rule of Reason
  • Quick-Look or Truncated Rule of Reason

For further written and video explanation, discussion and practice questions, see What is "per se illegality" and the "rule of reason"?

What is a “Monopoly”?
  • Section 2

Monopoly

⁃ "(1) the possession of monopoly power in the relevant market

⁃ (2) the willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident.”

Attempts to monopolize

Conspiracy

For further written and video explanation, discussion and practice questions, see What is a "Monopoly"?

Businesses Exempt from Sherman Act
  • State Action Exemption
  • Lobbying Exemption

For further written and video explanation, discussion and practice questions, see What businesses are exempt from the Sherman Act?

“Horizontal Restraint of Trade” under Sherman Act
  • Agreement - Was there an agreement between or among market participants?
  • Restraint - Was there an identifiable restraint of trade?
  • pro-competitive justification?
  • Rule of Reason vs Per Se Illegal

For further written and video explanation, discussion and practice questions, see What is "horizontal restraint" of trade under the Sherman Act?

Sharing Information – Horizontal Restraint
  • sharing of information among competitors with the purpose of restraining trade is per se illegal.
  • Factors used in determining whether information sharing is harmful may include the:
    • Nature of the Information
    • Availability of Information
    • Market Structure

For further written and video explanation, discussion and practice questions, see "Sharing information"?

Refusal to Deal – Horizontal Restraint
  • Refusals to deal with or boycotts of market participants can be illegal as horizontal restraints of trade.
  • Per se Illegal vs Rule of Reason

For further written and video explanation, discussion and practice questions, see "Refusal to deal"?

Territorial Agreement – Horizontal Restraint
  • A territorial agreement that allocates geographical areas among competitors may be a horizontal restraint of trade.
  • an agreement not to compete with or infringe upon another competitor within an exclusive geographic territory.
  • Generally per se illegal under the Sherman Act.

For further written and video explanation, discussion and practice questions, see "Territorial agreement"?

Price Fixing – Horizontal Restraint
  • an agreement among competitors to establish a fixed price among all producers or sellers of goods or services is a horizontal restraint of trade.
  • naked restraint on trade is a purely anticompetitive and is per se illegal.

For further written and video explanation, discussion and practice questions, see "Price fixing"?

Resale Restraint – Vertical Restraint
  • an arrangement or agreement between members of a supply chain (such as manufacturers, wholesalers, distributors, or retailers) to fix the price or supply of goods.
  • common types of vertical restraint:
  • Resale Restraint (Vertical Price Fixing & Price Maintenance)

For further written and video explanation, discussion and practice questions, see "Resale restraint"?

Exclusive Dealing – Vertical Restraint
  • Sherman Act § 1, as well as § 3 of the Clayton Act,
  • exclusive dealing agreements between suppliers and manufacturers can be anticompetitive vertical restraints on trade.
  • not generally considered a naked restraint on trade.

For further written and video explanation, discussion and practice questions, see "Exclusive dealing"?

Tying Products – Vertical Restraint
  • Sherman Act § 1, as well as § 3 of the Clayton Act,
  • tying the purchase of one product to the purchase of another competitor’s product may be anticompetitive and a restraint of trade.
  • 2 or More Products
  • Market Power
  • Commercial Impact
  • Product Quality
  • Single Product

For further written and video explanation, discussion and practice questions, see "Tying products"?

Territorial Agreements – Vertical Restraint
  • an agreement between a manufacturer and a distributor of a product
  • grants an exclusive territory in which to distribute the product.
  • manufacturer agrees not to sell to other distributors in that territory i
  • dealer agrees not to operate outside of her assigned area.
  • Not naked restraints on trade.

For further written and video explanation, discussion and practice questions, see "Territorial agreements"?

Monopolization under the Sherman Act
Exclusionary Act

Closing of Resources

Exclusive Sales Agreements

Tying Relationships

Forced Acquisition

Mandatory Leasing

Reviewed pursuant to the rule of reason. Anticompetitive effect exists - defendant may offer a pro-competitive justification for the activity.

  • Refusing to Deal
  • Predatory Pricing

For further written and video explanation, discussion and practice questions, see What is "Monopolization" under the Sherman Act?

Price Discrimination Under Clayton Act

Special Arrangements – Clayton Act
  • Section 3 of the Clayton Act
  • Exclusivity Contracts

Line of Commerce

Area of Effective Competition

Barriers to Entry - How difficult is it for new competitors to enter the market?

For further written and video explanation, discussion and practice questions, see What are "special arrangements" prohibited under the Clayton Act?

Tying Contracts – Clayton Act
  • Tying Contract

Separate Products -

Market Power

Forecloses Trade

Forced Sale

Harm to Competition

No Competitive Justification

For further written and video explanation, discussion and practice questions, see When are "tying contracts" an illegal restraint under the Clayton Act?

Reciprocal Dealing Contracts – Clayton Act
  • a buyer offers to buy a seller’s goods under the condition that the seller buy other goods from the original buyer.
  • Not per se illegal.
  • Pro-competitive justification is a defense.

For further written and video explanation, discussion and practice questions, see When are "reciprocal dealing contracts" an illegal restraint under the Clayton Act?

Mergers and Acquisitions – Clayton Act
  • Clayton Act § 7 makes certain mergers and acquisitions illegal.
  • Horizontal Merger

⁃ the offsetting pro-competitive market responses, such as new competitors entering the market; and

⁃ the efficiency gains that could not reasonably be achieved without the merger.

  • Vertical Merger

⁃ Erect barriers to entry for competitors,

⁃ Serve as a vehicle for promoting collusion, or

⁃ Serve as a vehicle for regulatory evasion (by spreading profits across vertical entities).

  • Conglomerate Merger

For further written and video explanation, discussion and practice questions, see How does the Clayton Act regulate "mergers and acquisition"?

Regulations Under Federal Trade Commissions Act
  • The FTC Act §5 proscribes “unfair or deceptive acts or practices” and “unfair methods of competition.”
  • Mission
  • Civil Actions - Seek monetary redress and other relief for conduct injurious to consumers;
  • Regulatory Authority
  • Investigate
  • Public Reports

For further written and video explanation, discussion and practice questions, see Regulation of Federal Trade Commission Act.

Sanctions under Antitrust Law
  • Criminal Fines and Imprisonment (felonies)
  • Injunctions of Activity
  • Treble (triple) Damages
  • Nolo Contendere

For further written and video explanation, discussion and practice questions, see What "sanctions" are available under antitrust law?


Flashcards: Study Practice

Q1
__________ is a combination of federal and state laws that seek to promote competition among businesses (both large and small).

A1
“Antitrust laws”

Resource Video: https://thebusinessprofessor.com/what-is-antitrust-law/

Q2
Concerted activities, such as sharing of resources and information, are often beneficial to society even though they reduce competition. The question or legality focuses on whether ___________.

A2
consumers suffer a detriment from the activity.

Resource Video: https://thebusinessprofessor.com/what-is-antitrust-law/

Q3
The three major antitrust laws are:

A3
The Sherman Act of 1890; The Clayton Act of 1914; and The Federal Trade Commission Act of 1914.

Resource Video: https://thebusinessprofessor.com/federal-trade-commission-enforcing-antitrust-laws/

Q4
____________ is the independent federal agency primarily charged with developing regulations to prevent anticompetitive business practices and preventing violations of the federal antitrust laws.

Q5
Congress broadly defined “unfair” methods of competition to allow administrative agency and federal court interpretation to add specificity. Generally, the FTC makes the determination of what it deems to be “unfair” by asking the following questions:

A5
Does the conduct injure consumers significantly? Does the conduct offend an established public policy? Is the conduct oppressive, unscrupulous, immoral, or unethical?

Resource Video: https://thebusinessprofessor.com/federal-trade-commission-enforcing-antitrust-laws/

Q6
______________ was the first major federal law passed with the purpose of ensuring competition across and within industries.

Q7
The Sherman Act, which seeks to preserve competition by prohibiting two types of anticompetitive business behavior:

A7
Section 1 - Contracts, combinations, or conspiracies in restraint of trade or commerce, and Section 2 - Monopolies and attempts to monopolize.

Resource Video: https://thebusinessprofessor.com/what-is-the-sherman-act/

Q8
___________ is an antitrust law passed to protect consumers by providing a means of preventing early-stage anticompetitive practices with a specific focus on the sale of commodities.

Q9
The Clayton Act prohibits conduct that does not presently amount to an injury to consumers but has the tendency to lead to consumer injury. True or False

Q10
Congress passed the ____________ o create the Federal Trade Commission, an independent administrative agency charged with consumer protection.

A10
Federal Trade Commission Act (FTC Act).

Resource Video: https://thebusinessprofessor.com/what-is-the-federal-trade-commission-act/

Q11
Section 1 of the Sherman Act prohibits ____________, but it does not define these types of agreements.

A11
“contracts, combinations, and conspiracies in restraint of trade or commerce”

Resource Video: https://thebusinessprofessor.com/contract-combination-conspiracy-in-restraint-of-trade/

Q12
Common law surrounding the Sherman Act identifies numerous forms of concerted actions between market competitors or members, generally broken into ________.

A12
“vertical restraints” and “horizontal restraints” of trade.

Resource Video: https://thebusinessprofessor.com/contract-combination-conspiracy-in-restraint-of-trade/

Q13
If the FTC determines an action to be a restraint of trade, the following standards apply to determine whether the arrangement is illegal:

A13
Per Se Illegality; Rule of Reason; Truncated Rule of Reason

Resource Video: https://thebusinessprofessor.com/antitrust-rule-of-reason-and-per-se-illegality/

Q14
A “naked restraint” of trade is one that is explicitly anticompetitive, such as an agreement controlling the price of a good or the output from production. A naked restraint with no pro-competitive justification is generally held to be ________.

Q15
__________ standard applies to any restraint that is not deemed a naked restraint.

Q16
Per Section 1, “every contract, combination, or conspiracy” is illegal if it constitutes undue or “unreasonable” restraint of trade. The test for reasonableness concerns whether the challenged contracts or acts ____________.

A16
unreasonably restrict competitive conditions in the market or industry.

Resource Video: https://thebusinessprofessor.com/antitrust-rule-of-reason-and-per-se-illegality/

Q17
The rule of reason balances pro-competitive and anti-competitive effects. In determining whether a restraint of trade is reasonable, the court would consider:

A17
facts peculiar to this business; actual and probable effects of restraint (including the effect on competitors); history of the restraint; purpose of restraint; scope of the restraint; convenience to suppliers and consumers; and creation of new products.

Resource Video: https://thebusinessprofessor.com/antitrust-rule-of-reason-and-per-se-illegality/

Q18
This is a test employed by the court in very limited circumstances. It is feasible that a naked restraint may be legal if there is a pro-competitive justification. Under the __________ a court will allow a defendant to introduce evidence that conduct that would otherwise be per se illegal has a pro-competitive aspect.

A18
Truncated Rule of Reason (Quick-look test)

Resource Video: https://thebusinessprofessor.com/antitrust-rule-of-reason-and-per-se-illegality/

Q19
Section 2 of the Sherman Act regulates _________.

A19
monopolies or conspiracies or attempts to monopolize any part of interstate or foreign commerce. It is directed at single firms and does not purport to cover shared monopolies or oligopolies.

Resource Video: https://thebusinessprofessor.com/sherman-act-monopoly/

Q20
Monopoly can be defined as __________.

A20
”(1) the possession of monopoly power in the relevant market and (2) the willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident.”

Resource Video: https://thebusinessprofessor.com/sherman-act-monopoly/

Q21
__________ is generally understood to mean “the power to control prices or exclude competition”.

A21
“Monopoly power”

Resource Video: https://thebusinessprofessor.com/sherman-act-monopoly/

Q22
The __________ is determined by the geographic area where the product or service is sold, either by the subject party or competitors.

A22
“relevant market”

Resource Video: https://thebusinessprofessor.com/sherman-act-monopoly/

Q23
An attempt to monopolize or create a monopoly requires the following proof:

A23
“(1) that the defendant has engaged in predatory or anticompetitive conduct, (2) with a specific intent to monopolize, and (3) a dangerous probability of achieving monopoly power.”

Resource Video: https://thebusinessprofessor.com/sherman-act-monopoly/

Q24
To be liable under the Sherman Act, it only requires an attempt to monopolize. The attempt does not have be successful. True or False

A24
True - It is sufficient that there was intent and a dangerous probability of success exists.

Resource Video: https://thebusinessprofessor.com/sherman-act-monopoly/

Q25
To be liable for a “Conspiracy to monopolize”, it requires:

A25
an agreement between two or more parties with the specific intent of acquiring monopoly power; at least one overt act to accomplish the objectives.

Resource Video: https://thebusinessprofessor.com/sherman-act-monopoly/

Q26
Developing a monopoly is alway illegal, even if it is created through a valid competitive advantage. True or False

Q27
Businesses in certain industries may be exempt from some of the antitrust provisions of the Sherman Act, including:

A27
State actors (or state-owned entities); Efforts to lobby government officials; Grants of intellectual property rights

Resource Video: https://thebusinessprofessor.com/exemptions-from-antitrust-regulation/

Q28
A horizontal restraint is any situation that meets the following elements:

A28
an agreement between or among market participants; an identifiable restraint of trade;

Resource Video: https://thebusinessprofessor.com/sherman-act-horizontal-restraint-of-trade/

Q29
To determine whether it is legal, a horizontal restraint is examined under the following tests:

A29
Naked restraint with no pro-competitive justification is per se illegal. A Naked restrain with a pro-competitive justification, apply the quick-look rule of reason. If it is not a naked restraint, the rule of reason applies.

Resource Video: https://thebusinessprofessor.com/sherman-act-horizontal-restraint-of-trade/

Q30
Information sharing is illegal if the information sharing is or could be harmful to competition and restrain trade. Factors used in determining whether information sharing is harmful may include the:

A30
Nature of the Information, Actions taken by Either Party, Availability of Information, Market Structure

Resource Video: https://thebusinessprofessor.com/sherman-act-sharing-of-information/

Q31
Under the Sherman Act § 1, refusals to deal with or boycotts of market participants can be illegal as horizontal restraints of trade if:

A31
There is a pure restraint of trade; or, under the Rule of Reason, there is sufficient restraint of trade to make the conduct illegal.

Resource Video: https://thebusinessprofessor.com/sherman-act-refusal-to-deal/

Q32
Under the Sherman Act § 1, a ___________ that allocates geographical areas among competitors in an agreement not to compete with or infringe upon another competitor within an exclusive geographic territory is illegal.

A32
Horizontal Territorial Agreements

Resource Video: https://thebusinessprofessor.com/sherman-act-territorial-agreement/

Q33
Under the Sherman Act § 1, ____________ is an agreement among competitors to establish a fixed price among all producers or sellers of goods or services.

Q34
Businesses may develop all sorts of arrangements to control the ultimate price of a good or service. These are illegal whether or not the fixed prices are fair or reasonable. True or False

Q35
__________ is an arrangement or agreement between members of a supply chain (such as manufacturers, wholesalers, distributors, or retailers) to fix the price or supply of goods.

Q36
Under the Sherman Act § 1, an agreement among manufacturers or distributors of a product to control the retail price for a product is an illegal restraint of trade, known as _________.

Q37
A manufacturer controlling the maximum price at which distributors can resale a product is known as __________.

Q38
Vertical price fixing involving an agreement among competitors is a naked restraint of trade and is _______.

Q39
Resale price maintenance is not generally considered a naked restraint of trade. As such, a court examining such a relationship will apply ___________ to determine if the restraint is anticompetitive and therefore illegal.

Q40
Under the Sherman Act § 1, as well as § 3 of the Clayton Act, ___________ is when a seller requires that a buyer of a product only purchase that product from that seller.

Q41
Exclusive dealings contracts are considered Naked Restrains of Trade? True or False

A41
False - This is not generally considered a naked restraint on trade. As such, a court would evaluate such an agreement under the rule of reason and examine its pro-competitive justifications.

Resource Video: https://thebusinessprofessor.com/sherman-act-exclusive-dealing-arrangements/

Q42
Under the Sherman Act § 1, as well as § 3 of the Clayton Act, ________ is when a seller requires that a buyer agree that if seller sells product A, the buyer can only buy product B from the seller (or another identified seller).

Q43
For product tying to be illegal, this practice must have a substantial impact on trade or commerce. To have a substantial effect on trade, a seller must generally __________.

A43
hold substantial market power.

Resource Video: https://thebusinessprofessor.com/sherman-act-product-tying/

Q44
A tying arrangement must generally have the following elements:

A44
2 or More Products; Buyers are coerced by the tying relationship to purchase the tied product; The defendant must have substantial market power in the tying product; The tying arrangement forecloses a substantial volume of commerce in the tied product (affects competition).

Resource Video: https://thebusinessprofessor.com/sherman-act-product-tying/

Q45
Tying arrangements are generally considered a naked restraint of trade. True or False

A45
False - A court will examine to see if there are any pro-competitive justifications for tying.

Resource Video: https://thebusinessprofessor.com/sherman-act-product-tying/

Q46
Examples of pro-competitive justifications for product tying include:

A46
Product Quality; A seller may be able to demonstrate that the two items should be treated as one single product.

Resource Video: https://thebusinessprofessor.com/sherman-act-product-tying/

Q47
A __________ is an agreement between a manufacturer and a distributor of a product that grants an exclusive territory in which to distribute the product.

Q48
A vertical territorial agreement is not a naked restraint on trade. True or False

A48
True - If such actions are challenged, a court will apply the rule of reason in determining whether the conduct is sufficiently anticompetitive to constitute an illegal restraint on trade.

Resource Video: https://thebusinessprofessor.com/sherman-act-vertical-territorial-agreements/

Q49
Monopoly power obtained through an exclusionary act is prohibited. Examples of anticompetitive, exclusionary acts may include:

A49
Buying up raw materials (especially if you do not need them) to the exclusion of other competitors; Enforcing agreements with suppliers requiring them not to sell to your competitors; Tying the sale of one product to the purchase of a separate product; Forcing a competitor to sell its business to you to eliminate competition; Requiring long-term leases or foreclosing a secondary market by leasing and not selling a product are examples of exclusionary acts.

Resource Video: https://thebusinessprofessor.com/sherman-act-monopolization/

Q50
The acquisition of monopoly power is per se illegal? True or False

A50
False . It will be reviewed pursuant to the rule of reason. If a court determines that an anticompetitive effect exists, the defendant may offer a pro-competitive justification for the activity.

Resource Video: https://thebusinessprofessor.com/sherman-act-monopolization/

Q51
Acquiring monopoly power in a market may be illegal under Sherman Act § 2 if such power is obtained through refusal to deal with competitors and _________.

A51
no valid business justification and the refusal is economically harmful to market competition in the long run.

Resource Video: https://thebusinessprofessor.com/sherman-act-monopolization/

Q52
_______ exists where one competitor prices a product arbitrarily low in an effort to monopolize a market.

Q53
Predatory pricing is per se illegal under The Sherman Act § 2. True or False

Q54
The Clayton Act covers only the sale of _________.

Q55
Price discrimination under the Clayton Act means charging a different price for a commodity based upon something other than ___________.

A55
quality, quantity, or cost of selling.

Resource Video: https://thebusinessprofessor.com/clayton-act-price-discrimination/

Q56
Under the Robinson-Patman Act, an amendment to the Clayton Act § 2, _________ can be anticompetitive when the price is below costs and gives one customer a competitive edge in the market that is not related to operational superiority.

Q57
A claim under the Robinson-Patman Act must meet the following requirements:

A57
Commodities, that are effectively the same. There must be some effect on the market (interstate commerce), in either: The reduction of prices for a buyer in a specific region causes an injury to competitors in that market, or Buyers who are customers of a seller’s supplier receive a particular discount.

Resource Video: https://thebusinessprofessor.com/clayton-act-price-discrimination/

Q58
The Robinson-Patman Act specifically prohibits the following conduct:

A58
Section 2(c) - limits brokerage commissions related to the sale of goods; Section 2(d) - outlaws granting promotional allowances or payments on good bought for resale, unless such allowances are available to all competing customers.; Section 2(e) - prohibits giving promotional facilities or services on goods bought for resale, unless they are made available to all competing customers.

Resource Video: https://thebusinessprofessor.com/clayton-act-price-discrimination/

Q59
The Clayton Act does allow for defenses to or justifications for price discrimination, including:

A59
Cost Justification - Price differentials based on differences in the cost of manufacture, sale, or delivery of commodities are permitted; Good-faith Defense - A seller in good faith may meet the equally low price of a competitor.

Resource Video: https://thebusinessprofessor.com/clayton-act-price-discrimination/

Q60
___________ of the Clayton Act limits the use of certain types of contracts involving goods when the impact of these contracts may substantially lessen competition or tend to create a monopoly.

Q61
The Clayton Act § 3 applies to ________, situations where a seller requires a buyer to only purchase from it or another seller.

Q62
Under Sherman Act § 1, legality turns on the question of whether the activity substantially lessens competition. To make this determination, the court will look at:

A62
Does this activity prevent competitors for achieving a sustainable size? To what extent so the sales boundaries confine and potentially effect that region? How difficult is it for new competitors to enter the market?

Resource Video: https://thebusinessprofessor.com/clayton-act-section-3-special-arrangements/

Q63
A defendant may be able to rebut a Clayton Act § 3 allegation by demonstrating that:

A63
There is no foreclosure of competition; The contract is short-term in nature; There are other available modes of distribution; or The pro-competitive aspects of the agreement may outweigh the anticompetitive effects under the rule of reason.

Resource Video: https://thebusinessprofessor.com/clayton-act-section-3-special-arrangements/

Q64
A ___________ is one in which a product is sold or leased only on the condition that the buyer purchase a different product or service from the seller or lessor.

Q65
A common type of tying, known as _________, is where a seller compels the buyer to take a complete product line from the seller.

Q66
Tying unpatented products to a patented product is per se illegal if the following elements are present:

A66
The tying and tied product are two separate products; The defendant has substantial market power in tying the product market; The tying agreement prevents a substantial amount of trade in the relevant market; The defendant effectively forces a substantial number of customers to purchase the tied product under conditions where they may otherwise look to other sellers in the market; There must be an identifiable lessening of competition in the market, and No legitimate pro-competitive justification exists.

Resource Video: https://thebusinessprofessor.com/clayton-act-tying-arrangements/

Q67
The general defenses to tying include:

A67
maintaining company goodwill, pro-competitive or strategic objectives, and generating market efficiencies are available to combat a finding of anticompetitive effect.

Resource Video: https://thebusinessprofessor.com/clayton-act-tying-arrangements/

Q68
___________ Is an agreement where a buyer offers to buy a seller’s goods under the condition that the seller buy other goods from the original buyer.

Q69
These agreement are only illegal if there is a distinct anticompetitive objective with a substantial effect on the product market. True or False

Q70
The Clayton Act ____ makes certain mergers and acquisitions illegal.

Q71
A ________ combines competitors or two businesses in the same industry.

Q72
The court may examine any justifications for the anticompetitive horizontal merger, such as:

A72
procompetitive results of the merger, or the offsetting pro-competitive market responses, such as new competitors entering the market; and gains in the market efficiency.

Resource Video: https://thebusinessprofessor.com/clayton-act-mergers-and-acquisitions/

Q73
A __________ brings together companies that are in the same chain of commerce. That is, it brings together buyers and suppliers.

Q74
A vertical merger may be illegal where it will:

A74
erect barriers to entry for competitors; promote collusion, or allow the companies to evade regulations.

Resource Video: https://thebusinessprofessor.com/clayton-act-mergers-and-acquisitions/

Q75
A ___________ merger is between non-related businesses. These businesses do not compete or operate in the same chain of commerce. This type of merger is illegal when it effectively makes it difficult for new competitors to enter the market.

Q76
The FTC Act §5 proscribes ___________.

A76
“unfair or deceptive acts or practices” and “unfair methods of competition.”

Resource Video: https://thebusinessprofessor.com/federal-trade-commission-act-antitrust-deceptive-practices/

Q77
The primary importance of the FTC Act is the regulatory and enforcement authority that it vests in the FTC, which include:

A77
Regulatory Authority; Investigative Authority; Ability to bring Civil Actions

Resource Video: https://thebusinessprofessor.com/federal-trade-commission-act-antitrust-deceptive-practices/

Q78
Together the Sherman Act, Clayton Act, and FTC Act allows for four legal sanctions:

A78
Injunctions of Activity; Treble (triple) Damages; Criminal Fines and Imprisonment (felonies); Nolo Contendere

Resource Video: https://thebusinessprofessor.com/sanctions-under-antitrust-law/

Q79
__________ may bring actions to enforce antitrust laws and may seek any combination of the above sanctions.

A79
The FTC, DOJ, state governments, and private parties

Resource Video: https://thebusinessprofessor.com/sanctions-under-antitrust-law/


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