Antitrust Law - Environment of Business - Lecture Slides, Slides of Business Management and Analysis

Download Antitrust Law - Environment of Business - Lecture Slides and more Slides Business Management and Analysis in PDF only on Docsity! Chapter 21 Antitrust Law Docsity.com INTRODUCTION • Antitrust Laws – Regulate economic competition • Restraints of trade • Monopolies – Specific antitrust laws addressed • Sherman Act • Clayton Act • Federal Trade Commission Act Docsity.com US v. Socony-Vacuum Oil Co. Landmark Case • The US Supreme Court affirmed the judgment of the trial court that illegal price fixing took place when the oil companies agreed to purchase distressed oil from independent refiners • Such price fixing was a violation of the per se rule of the Sherman Act Docsity.com Standard Oil of NJ v. US Landmark Case • The US Supreme Court reasoned that Congress intended the Sherman Act to apply only to unreasonable restraints on trade that would result in monopolization • The US Supreme Court thusly created the rule of reason Docsity.com Monopoly Power • Monopoly power is based on structural analysis • Courts have found that no monopoly exists when a firms control less than 65% of its relevant markets, but that 2/3 of the relevant market would questionably constitute a monopoly • After monopoly power is examined, a court must determine whether a firm holds such substantial power over a market that it can engage in actions not associated with natural growth to exclude competitors and control prices Docsity.com Mergers • Horizontal – Occurs when two or more companies that previously competed with the same or similar products in the same geographic area merge • Vertical – Occurs when a company at one stage of distribution acquires a company at a higher or lower stage of distribution • Conglomerate – Combination of two or more firms dealing in unrelated products and operating in markets not horizontally or vertically linked Docsity.com Consolidation • Occurs when two companies are consolidated and a new corporate entity is created Docsity.com Defenses • Changing market conditions • Colgate Doctrine • “Thrust upon” defense • Failing company and inadequate resources defense Docsity.com International Considerations • Many nations do not have a history of regulating anticompetitive behavior • International Antitrust Enforcement Assistance Act provides guidance to businesses engaged in international operations • EU has antitrust legislation modeled after US antitrust laws Docsity.com Summary • Sherman Act – Monopolies and Restraint of Trade • Restraint of Trade, Sec.1 • US v. Sacony-Vacuum Oil Co • Standard Oil of NJ v. US • Monopoly Power • Clayton Act • Federal Trade Commission • Mergers • Consolidation • Defenses • Exceptions • Enforcement of Antitrust Laws • International Considerations Docsity.com