Chapter 13 Antitrust - Chapter 13 Antitrust Historical...

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Chapter 13 Antitrust Historical Development ......................... Antimonopoly provisions were named antitrust because Trusts ................................................ used by Trustee (Rockefeller) to hold his company’s and ................................................ other companies’ shares. The Beneficiary owners profited ................................................ from the trustee running all companies as one monopoly. Sherman Act 1890 .................................... prohibits restraint of trade or commerce & monopolies or ................................................ attempts to monopolize Northern Pacific Ry ........................ Justice Black “free and unfettered competition as rule of trade” ................................................ “best allocation of economic resources, lowest prices, ................................................ highest quality, greatest material progress” Clayton Act 1914 ..................................... made Sherman Act more specific Federal Trade Commission 1914 ............. prevents unfair competition & unfair/deceptive acts & practices Antitrust Enforcement ..................... Federal – Dept of Justice – crim/civil, FTC – civil ................................................ State attorney generals – civil damages/injunctions ................................................ Private parties - civil triple damages/injunctions Sherman Act ........................................... either in interstate commerce or substantially affecting it. Section 1 ................................................ prohibits contracts combinations and conspiracies in restraint ................................................ of trade or commerce Contracts ................................ oral/written agreements Combinations ......................... normally observable through conduct of companies Conspiracies ........................... an agreement and some overt act (circumstantial evidence ok) Examples ......................................... price fixing (same price), dividing territories, Section 2 ................................................ to monopolize, attempt to monopolize, conspire to monopolize Monopoly Power ............................. compared to perfect competition, price > marginal cost Allowable monopoly .............. Patents, copyrights (legal), regulated utilities (AFC↓ natural), ................................................ mere growth w/o deliberate conduct
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