Antitrust Laws Overview

These flashcards cover key concepts, laws, and terminology related to antitrust laws as discussed in the lecture.

What are antitrust laws?

A series of laws enacted to limit anticompetitive behavior in almost all industries, businesses, and professions operating in the United States.

What is the Sherman Act (1890)?

It makes certain restraints of trade and monopolistic acts illegal.

What does the Clayton Act (1914) regulate?

It regulates mergers and prohibits certain exclusive dealing arrangements.

What is prohibited by the Federal Trade Commission Act (1914)?

It prohibits unfair methods of competition.

What type of discrimination does the Robinson-Patman Act (1930) prohibit?

It prohibits price discrimination.

What is the role of the Antitrust Division of the Department of Justice?

It is authorized to investigate suspected antitrust violations and to prosecute criminal antitrust lawsuits.

What does the Bureau of Competition of the Federal Trade Commission do?

It investigates suspected antitrust violations and can bring civil actions.

What are civil damages in the context of antitrust laws?

Damages awarded for violations of antitrust laws, including treble damages.

What is a private civil action under Section 4 of the Clayton Act?

A lawsuit that any person suffering antitrust injury in their business or property can bring against offenders.

What is antitrust injury?

Injury suffered by a person or business to their business or property caused by an antitrust violation.

What are treble damages?

Ch triple the amount of actual damages, plus reasonable costs and attorney's fees.

What effect does a government judgment have in a private action?

It may be used as prima facie evidence of liability in a private civil, treble damages action.

What does 'nolo contendere' mean?

A plea where a criminal defendant does not admit guilt but agrees to the imposition of a penalty.

What is a consent decree?

A plea entered by a civil defendant agreeing to a penalty without admitting liability.

What does Section 16 of the Clayton Act permit?

It permits the government or private plaintiff to obtain an injunction against anticompetitive behavior.

What does Section 1 of the Sherman Act prohibit?

Contracts, combinations, and conspiracies in restraint of trade.

What is the rule of reason?

A standard that holds only unreasonable restraints of trade violate Section 1 of the Sherman Act.

What are reasonable restraints?

Restraints of trade that do not violate Section 1 of the Sherman Act.

What is a per se violation?

Restraints that are inherently anticompetitive and automatically violate Section 1 of the Sherman Act.

What is price fixing?

A restraint of trade where competitors agree to set the price of goods or services.

What is horizontal restraint of trade?

When competitors at the same distribution level agree to restrain trade.

What is market sharing?

When competitors agree to serve only designated portions of the market.

What is group boycott?

When two or more competitors agree not to deal with others at a different distribution level.

What is vertical restraint of trade?

When parties at different distribution levels conspire to restrain trade.

What is resale price maintenance?

An agreement to adhere to a price schedule that sets or stabilizes prices.

What is unilateral refusal to deal?

A choice by one party not to deal with another; does not violate Section 1 of the Sherman Act.

What is conscious parallelism?

When firms independently act similarly without a concerted agreement; not a violation of the Sherman Act.

What does Section 2 of the Sherman Act prohibit?

Monopolization and attempts or conspiracies to monopolize trade.

What must be proven to show monopolization?

Monopoly power, a willful act of monopolization, and a relevant market.

What constitutes monopoly power?

The power to control prices or exclude competition, typically measured by market share.

What is a relevant market?

The defined market for a Sherman Act Section 2 charge, including product and geographical market.

What defines a horizontal merger?

A merger between two or more companies that compete in the same market.

What defines a vertical merger?

A merger between businesses operating at different stages of production and distribution.

What is a backward vertical merger?

When a business acquires one of its suppliers.

What is a forward vertical merger?

When a business acquires one of its customers.

What is a market extension merger?

A merger between companies in similar fields but whose sales do not overlap.

What is a conglomerate merger?

A merger between firms in unrelated businesses.

What is the failing company doctrine?

Allows a competitor to merge with a failing company if there are no reasonable alternatives.

What are tying arrangements?

A vertical trade restraint where the seller refuses to sell a product unless the customer purchases a second product.

What does the Robinson-Patman Act prohibit?

Price discrimination in the sale of goods under certain conditions.

What is direct price discrimination?

Selling commodities of like grade and quality at different prices to different purchasers.

What is indirect price discrimination?

Less readily apparent price discrimination, such as favorable credit terms.

What does Section 5 of the Federal Trade Commission Act prohibit?

Unfair methods of competition and unfair or deceptive acts affecting commerce.