Summary of antitrust legislation, including the Sherman Antitrust Act and related regulations.
Instructions
The legal ideas of monopolization, price fixing, and tying agreements are all covered in this assignment. You are required to use what you have learnt in this chapter to solve each of these problems.
Consult Chapter 42 of your text.
Read the chapter summaries in your textbook on pages 945–947.
Check your textbook’s page 947 for the Review Questions and Problems 4, 9, and 10.
Using the sample response
To respond to the questions in each of these issues, download a response template, create a document, and write a five or more page double-spaced response.
4. The talent agencies Best View Theatres (BVT) and Prime Time Entertainment (PTE) were based in Las Vegas, Nevada. Each company actively sought out potential artists and made every effort to book locations for their performers. The leaders of BVT and PTE had supper together while attending a trade show. Each made the decision to tell their individual personnel to stop booking the same performers at the same locations. On a napkin, the two presidents sketched out a “working relationship” that would let each company turn a tidy profit without having to engage in expensive “wars” with the other. Is such a contract legitimate? Why?
9.With 4.7 percent of sales, Von’s Supermarket Company is the third-largest grocery chain in the Los Angeles area. With 2.8 percent of revenues, the sixth-largest company is the one it wants to combine with. Is this permitted? Why?
10. The Japanese company Nippon Material Industries Company produced facsimile (fax) paper. To set the pricing of thermal fax paper across the US, representatives of that firm met with other rivals in the market in Japan. Could American antitrust legislation be used? Why?”
Overview
The Sherman Anti-Trust Act gave the government the right to file lawsuits against trusts and dissolve them. Any arrangement “in the nature of trust or otherwise that was in hindrance of trade or commerce between the different states, or with foreign powers,” was deemed unlawful. People who formed these combinations were subject to $5,000 in penalties and a year in prison. Trust-related losses might be sued for treble damages in federal court by people and businesses.
Although the legislation was intended to restore competition, it was poorly written and lacked definitions for key words like “trust,” “combination,” “conspiracy,” and “monopoly.” Five years later, in United States v. E. C. Knight Company, the Supreme Court struck down the legislation (1895).
Even though it controlled almost 98% of all sugar refining in the US, the American Sugar Refining Company, one of the defendants in the case, was found not to have broken any laws by the court. The company’s control over manufacturing, according to the Supreme Court, did not amount to a control over commerce