DSST Business Law

Price fixing agreeing to set a common price ai1b

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price fixing (agreeing to set a common price), (a.i.1.b) group boycotts (agreements by competitors not to deal with another business to make them pay a higher price) – noneconomic political expressions are not illegal (a.i.1.c) production quotas, (an agreement to restrict production or output, illegal because it raises prices) (a.i.1.d) horizontal market divisions, Divisions, horizontal territorial limitations – (agreement not to compete, agreeing to divide territories, illegal because it monopolizes the market) (a.i.1.e) tying arrangements or Tie-In – (sale of one product is a condition of another, illegal because it harms competition) (a.i.2) antitrust laws are tested by the ‘rule of reason’ test established in 1911 Supreme Court ruling allows reasonable restraints of trod if determined by the court to be economically efficient and valid business purpose (a.i.2.a) Resale Price Maintenance - agreements involve a vertical agreement between a (seller) supplier and a (buyer) dealer that fixes the minimum resale price (a.i.2.b) Exclusive Distributorship – when a firm is the only one to sell a product in a specific region (a.i.2.b.i) Only violates the antitrust laws if there is little competition (a.i.2.c) Exclusive Dealings – where a firm is required to sell productions from only one manufacturer (a.i.2.c.i) Violates antitrust laws if it lessens competition b) Clayton Act of 1917 – replaced the Sherman Act and it’s vague terms, much stricter than the Sherman Act b.i)Clayton Act requires probable adverse impact , where the Sherman Act required actual adverse impact b.ii) Forbids Interlocking Directorship - occurs when firms compete with one another that have common board of directors b.iii) Horizontal Mergers – merging of firms operating the same business at same level (often illegal, reduce competition) b.iv) Vertical Mergers – Integration – involves merging firms of the same type at different levels – cotton suppler and cotton clothes manufacturer. (illegal if it significantly reduces competition) b.v) Conglomerates – merged companies in unrelated businesses Failing Firm Defense – commonly used for justifications of mergers accused of antitrust law violations
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BUSINESS LAW - CLEP ( Allowed because there was not suitable merger partners (to save a competitor from failing) c) Robinson-Patman Act – forbids price discrimination (a seller charges different prices to different buyers) c.i) To be in violation some form of injury to the competitor or customer must be proved (c.i.1) Primary Line injuries – affect the sellers competitors (c.i.2) Secondary Line injuries – buyers is affected because the seller’s price was lower to competitors (c.i.3) Tertiary line injuries – is to a customer of a buyer d) Federal Trade Commission Act of 1914 – creates a commission to enforce antitrust laws d.i)Has the power to bring civil action against antitrust law violators d.ii) Works with U.S. Justice Department (d.ii.1)
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