Antitrust-Fox-Fall06

Antitrust-Fox-Fall06 - ANTITRUST LAW OUTLINE Prof. Eleanor...

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ANTITRUST LAW OUTLINE Prof. Eleanor Fox Fall 2006 1 • INTRODUCTION I. I NTRODUCTION A. goals/values of antitrust 1. major goal: to prohibit transactions that will make things worse for consumers (not so interventionist to be proactively trying to create a market that is best for consumers) a) note: AT isn’t about protecting competitors from competition 2. desire to have a better distribution of wealth – vis-à-vis anti-monopolistic aspects? 3. efficient use of resources – don’t want to allow companies to gain while shrinking the size of the pie (i.e., not gaining by good business practices, but by cheating…) B. three major historical turning points in US antitrust 1. Industrial Revolution – brought about the first antitrust laws a) led to better communication, transport of goods, etc. – regional businesses suddenly found themselves in competition with distant businesses b) competitors wanted to quell competition, so they came together into cartels – creation of the trust form, which arose in all major industries c) huge aggregations of wealth/power within the trusts d) concerns re aggregations of power – exploitation of the ordinary person economically, politically, etc. 2. Hitler/WWII – shock of observing how fascist govts used big enterprise to carry out their designs; big enterprise came to work lockstep with Hitler a) hugely dangerous politically – high concentration of economic power could play into the hands of a despot this led to strengthening of merger laws (1950) 3. globalization – impact starting around 1980 a) barriers to entry had become much lower as a result of trade agreements that lowered tariffs, etc., and now US companies besieged by robust competition from abroad b) led to rethinking of laws in general – many groups began to argue that US law was too handicapping of US business great drive to cut back law, let business do what it had to do to be competitive in the global market c) loosening took place not in the wording of statutes (which were very broad), but also in those enforcing the laws (judges, commissioners, etc.) d) US AT law is now much more relaxed than it used to be with the exception being hard-core cartels II. M AJOR S TATUTES AND L AWS A. main federal AT laws 1. Sherman Act (1890) a) §1 prohibits agreements/conspiracies in restraint of trade b) §2 prohibits monopolization, attempts to monopolize, and conspiracies to monopolize 2. Clayton Act (1914) a) §3 – prohibits potentially anticompetitive acquisitions, exclusive dealings, tie-ins, and interlocking directorates b) §4 – establishes standing under the Clayton Act c) §7 – prohibits anticompetitive mergers note: doesn’t apply to persons purchasing such stock solely for investment, and doesn’t prevent a corp from forming a subsidiary 3. Federal Trade Commission Act (1914) a) §5 – prohibits unfair methods of competition and unfair/deceptive acts/practices 1
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b) FTC – admin agency, can’t sue criminally, but can sue civilly
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This note was uploaded on 04/04/2008 for the course LAW ALL taught by Professor Multiple during the Fall '06 term at NYU.

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Antitrust-Fox-Fall06 - ANTITRUST LAW OUTLINE Prof. Eleanor...

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