The University of Dover and Dover University are bitter cross-town rivals. They compete in everything from sports to academics. The schools, because of shrinking enrollment, make an agreement to give all incoming students free tuition for one semester before raising the existing rates the following semester. This action would be considered:
A) a horizontal agreement in violation of the Sherman Act.
B) a vertical agreement in violation of the Sherman Act.
C) a tying agreement in violation of the Clayton Act.
D) a reciprocal dealing agreement violating the Clayton Act.
E) a licensing agreement violating the Clayton Act.

Question

Quizplus · Accepted Answer

These arrangements among competitors are of a horizontal nature. Courts hold that the sharing among competitors of product information, pricing policies, and territorial allocations is not going to increase competition. Indeed, the anticompetitive results of this sharing results in such arrangements being viewed as illegal per se.

The University of Dover and Dover University Are Bitter Cross-Town