Deck 22: Antitrust Law and Unfair Trade Practices

Question 1

Federal antitrust law comprises ________ major statute(s) that prohibit certain anticompetitive and monopolistic practices.

A) one
B) two
C) several
D) hundreds of

Answer 1

several

Question 2

Antitrust defendants often opt to settle government-brought antitrust actions by entering a plea of ________.

A) guilty
B) not guilty
C) nolo contendere
D) corpus juris secundum

Answer 2

nolo contendere

Question 3

Name the four major antitrust laws enacted by Congress in the late 1800s and early 1900s.

Answer 3

In the late 1800s and early 1900s, Congress enacted four major federal antitrust statutes aimed at curbing abusive and monopoly practices by business, specifically:
The Sherman Antitrust Act (or Sherman Act), enacted in 1890, makes certain restraints of trade and monopolistic acts illegal.
The Clayton Antitrust Act (or Clayton Act), enacted in 1914, regulates mergers and prohibits certain exclusive dealing arrangements.
The Federal Trade Commission Act (FTC Act), enacted in 1914, prohibits unfair methods of competition.
The Robinson-Patman Act, enacted in 1930, prohibits price discrimination.

Question 4

Describe the effect of a government judgment against a defendant in an antitrust case.

Question 5

Contracts, combinations, and conspiracies in restraint of trade are outlawed by Section 1 of the ________ Act.

A) Clayton
B) Hart-Scott-Rodino
C) Robinson-Patman
D) Sherman

Question 6

Price fixing is a per se violation of Section 1 of the ________ Act.

A) Clayton
B) Sherman
C) Hart-Scott-Rodino
D) Robinson-Patman

Question 7

Resale price maintenance occurs when a party at one level of distribution enters into an agreement with a party at another level to adhere to a schedule that ________ prices.

A) suggests
B) makes no reference to
C) allows flexible
D) either sets or stabilizes

Question 8

The legality of ________ under Section 1 of the Sherman Act is examined by using the rule of reason.

A) division of markets
B) nonprice vertical restraints of trade
C) price fixing
D) market sharing

Question 9

Group boycotts can be either a ________ violation or a ________ violation.

A) literal; figurative
B) per se; rule of reason
C) price fixing; restraint of trade
D) civil; criminal

Question 10

Division of markets is considered to be a type of ________.

A) horizontal restraint of trade
B) vertical restraint of trade
C) group boycott
D) price fixing

Question 11

Conscious parallelism occurs if two competing manufacturers of a similar product ________ not deal with a retailer.

A) both conspire to
B) both organize a boycott to
C) both collude to
D) separately reach an independent decision to

Question 12

Briefly explain the "rule of reason"
and list factors that a court will examine when conducting a rule of reason analysis in a Sherman Act Section 1 case.

Question 13

Predatory pricing, which is used to drive out competition, is in violation of ________ Act.

A) Article 7 of the Clayton
B) Section 2 of the Sherman
C) Title I of the Hart-Scott-Rodino
D) Section 8 of the Robinson-Patman

Question 14

Natural monopoly is a defense to a charge of ________ which recognizes that a small market can support only one competitor, such as a small-town newspaper.

A) conspiracy
B) monopolizing
C) price fixing
D) obstruction of justice

Question 15

________ prohibits the act of monopolization.

A) Article 7 of the Clayton Act
B) Section 2 of the Sherman Act
C) Title II of the Emmanuel-Lewis-Webster Act
D) Section 8 of the Robinson-Patman

Question 16

Mergers between firms ________ are known as conglomerate mergers.

A) which are competitors
B) in similar industries
C) which are upstream/downstream from each other in a supply chain
D) in unrelated businesses

Question 17

Briefly describe a "tying arrangement."Which antitrust statutes do tying arrangements potentially violate, and what must be shown to establish the violation?

Question 18

Explain why Section 5 of the Federal Trade Commission Act is considered to be broader than the other antitrust laws. What agency is empowered to enforce this Act, and what has the Act enabled it to do?

Question 19

The exemption of railroads from antitrust laws is an example of a(n) ________ exemption.

A) statutory
B) implied
C) deliberate
D) Erin