Antitrust Laws
In what year was the Sherman Antitrust Act passed?
1890
Horizontal restraints
Agreements among competitors are called what type of restraints?
The ability to control price and exclude competitors
What is “market power”?
Does the Sherman Act prohibit “bigness” by itself?
No, bigness alone isn’t illegal
Price discrimination
Charging different prices to different buyers is called what?
The Clayton Act
Which 1914 law strengthened the Sherman Act by targeting practices that could lessen competition?
Vertical restraints
Restraints that happen through the supply chain are called what?
Section 2
Which section of the Sherman Act prohibits monopolization?
What remedy can courts order for an illegal merger?
A divestiture order
Name one lawful reason price discrimination might be OK.
Differences in grade/quality, transport cost, meeting competition, deterioration, or close-out
Robinson-Patman Act
What 1936 law prevents price discrimination that hurts small businesses?
Competitors agree not to deal with certain buyers; it’s a per se violation of the Sherman Ac
What is a boycott, and how is it treated under antitrust law?
Does having market power automatically mean monopoly?
No. Market power from consumer preference isn’t illegal; exclusionary conduct is
The Clayton Act
Which act prohibits mergers that could lessen competition?
Selling one product only if another is purchased is called what?
Tying
The Federal Trade Commission Act
Which act gives the FTC power to stop unfair methods of competition?
What do we call an agreement between competitors to set minimum prices?
Price fixing (horizontal)
Product market and geographic market
What two markets do courts look at when judging monopoly power?
Vertical mergers are tested under what law?
The Clayton Act; the test is whether the merger lessens competition
Resale price maintenance involves agreements between whom?
Manufacturers and distributors/retailer
Name two practices that are per se illegal under Section 1 of the Sherman Act.
Price fixing, dividing markets, group boycotts, or allocating markets
Section 1 of the Sherman Act applies to what kind of conduct?
Agreements, combinations, or conspiracies that unreasonably restrain
If market power is gained by excluding rivals, what might this show?
Evidence of monopolization
Before merging, who must companies notify?
The FTC and DOJ Antitrust Division
When may minimum resale prices be acceptable?
Only if tied to providing customer service