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Unformatted text preview: 363 C HAPTER 46 A NTITRUST L AW A NSWERS TO Q UESTIONS AT THE E NDS OF THE C ASES CASE 46.1—(PAGE 942) THE E-COMMERCE DIMENSION How does the Internet provide pro-competitive benefits without encouraging violations of the antitrust laws? The Internet provides opportunities for economically efficient methods of doing business, such as rapid business-to-business connections for transactions that can eliminate a necessity for large inventories. The Internet can facilitate such methods without fostering antitrust violations by creating a competitive price environment. CASE 46.2—QUESTIONS (PAGE 943) 1A. Should the Court have applied the doctrine of stare decisis to hold that minimum resale price maintenance agreements are still subject to the per se rule? Why or why not? The Court explained that the doctrine of stare decisis did not block the overruling of the previous common law application of the per se rule to minimum resale price maintenance agreements primarily because of “the dynamics of present economic conditions.” In other words, the economic situation had changed since the per se rule was first applied to these agreements. Also, as is indicated in the text’s discussion of other practices among competitors, the trend in antitrust law has been away from the application of such per se rules. 2A. What factors might the courts consider in applying the rule of reason to minimum resale price maintenance agreements? The Court acknowledged that “[r]esale price maintenance, it is true, does have economic dangers.” As factors to consider in applying the rule of reason to such agreements, the Court listed, as examples, “the number of manufacturers that make use of the practice in a given industry” and “[t]he source of the restraint,” and added “that a dominant manufacturer or retailer can abuse resale price maintenance for anticompetitive purposes may not be a serious concern unless the relevant entity has market power.” 364 UNIT NINE: GOVERNMENT REGULATION CASE 46.3—(PAGE 949) THE ETHICAL DIMENSION What are the ethical values underpinning antitrust laws, and why are those laws applied to tying arrangements in particular? The ethical values underlying the antitrust laws include honesty and equity (and liberty or freedom if those can be characterized as ethical values). A challenge to a tying arrangement is generally justified on the basis that the seller’s position of power in the marketplace for the tying product is used to restrain competition in the marketplace for the tied product. The essential characteristic of an invalid tying arrangement lies in a seller’s exploitation of its control over a tying product to force a buyer to buy a tied product that the buyer either does not want or might prefer to buy elsewhere on different terms....
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- Spring '09
- Law, Sherman Antitrust Act, Resale price maintenance, antitrust law