19: Antitrust Law
- Page ID
- 41879
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\(\newcommand{\avec}{\mathbf a}\) \(\newcommand{\bvec}{\mathbf b}\) \(\newcommand{\cvec}{\mathbf c}\) \(\newcommand{\dvec}{\mathbf d}\) \(\newcommand{\dtil}{\widetilde{\mathbf d}}\) \(\newcommand{\evec}{\mathbf e}\) \(\newcommand{\fvec}{\mathbf f}\) \(\newcommand{\nvec}{\mathbf n}\) \(\newcommand{\pvec}{\mathbf p}\) \(\newcommand{\qvec}{\mathbf q}\) \(\newcommand{\svec}{\mathbf s}\) \(\newcommand{\tvec}{\mathbf t}\) \(\newcommand{\uvec}{\mathbf u}\) \(\newcommand{\vvec}{\mathbf v}\) \(\newcommand{\wvec}{\mathbf w}\) \(\newcommand{\xvec}{\mathbf x}\) \(\newcommand{\yvec}{\mathbf y}\) \(\newcommand{\zvec}{\mathbf z}\) \(\newcommand{\rvec}{\mathbf r}\) \(\newcommand{\mvec}{\mathbf m}\) \(\newcommand{\zerovec}{\mathbf 0}\) \(\newcommand{\onevec}{\mathbf 1}\) \(\newcommand{\real}{\mathbb R}\) \(\newcommand{\twovec}[2]{\left[\begin{array}{r}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\ctwovec}[2]{\left[\begin{array}{c}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\threevec}[3]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\cthreevec}[3]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\fourvec}[4]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\cfourvec}[4]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\fivevec}[5]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\cfivevec}[5]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\mattwo}[4]{\left[\begin{array}{rr}#1 \amp #2 \\ #3 \amp #4 \\ \end{array}\right]}\) \(\newcommand{\laspan}[1]{\text{Span}\{#1\}}\) \(\newcommand{\bcal}{\cal B}\) \(\newcommand{\ccal}{\cal C}\) \(\newcommand{\scal}{\cal S}\) \(\newcommand{\wcal}{\cal W}\) \(\newcommand{\ecal}{\cal E}\) \(\newcommand{\coords}[2]{\left\{#1\right\}_{#2}}\) \(\newcommand{\gray}[1]{\color{gray}{#1}}\) \(\newcommand{\lgray}[1]{\color{lightgray}{#1}}\) \(\newcommand{\rank}{\operatorname{rank}}\) \(\newcommand{\row}{\text{Row}}\) \(\newcommand{\col}{\text{Col}}\) \(\renewcommand{\row}{\text{Row}}\) \(\newcommand{\nul}{\text{Nul}}\) \(\newcommand{\var}{\text{Var}}\) \(\newcommand{\corr}{\text{corr}}\) \(\newcommand{\len}[1]{\left|#1\right|}\) \(\newcommand{\bbar}{\overline{\bvec}}\) \(\newcommand{\bhat}{\widehat{\bvec}}\) \(\newcommand{\bperp}{\bvec^\perp}\) \(\newcommand{\xhat}{\widehat{\xvec}}\) \(\newcommand{\vhat}{\widehat{\vvec}}\) \(\newcommand{\uhat}{\widehat{\uvec}}\) \(\newcommand{\what}{\widehat{\wvec}}\) \(\newcommand{\Sighat}{\widehat{\Sigma}}\) \(\newcommand{\lt}{<}\) \(\newcommand{\gt}{>}\) \(\newcommand{\amp}{&}\) \(\definecolor{fillinmathshade}{gray}{0.9}\)- Understand the important federal antitrust laws, along with their exemptions.
- Learn the factors used to determine whether a monopoly exists.
- Comprehend the common types of unreasonable restraints on trade.
- 19.1: Introduction
- This page discusses antitrust laws designed to promote fair competition and prevent monopolies, highlighting key legislation like the Sherman Act and the Clayton Act. It addresses challenges in the tech sector regarding market dominance and the misuse of antitrust complaints. Emphasizing the importance of market analysis, the page cautions against using these laws opportunistically against competitors.
- 19.2: Historical Development
- This page discusses the U.S. economy's foundation in free enterprise and the exploitation of this system by industrialists during the Industrial Revolution. It highlights the creation of trusts that manipulated prices and competition, leading to the enactment of antitrust laws, starting with the Sherman Antitrust Act of 1890.
- 19.3: Monopoly
- This page explains monopolies as control by a single supplier over a market. Some are legal, while others may be illegal if they suppress competition. Key factors include market definition (product substitutability and geography), business intent (including predatory behavior), market share, entry barriers, and the economic context. Courts assess these elements to determine monopoly power and intent, noting that not all dominant positions result from anti-competitive practices.
- 19.4: Unreasonable Restraints on Trade
- This page discusses antitrust laws that aim to prevent trade restrictions and promote competition. Such laws target horizontal agreements among competitors, typically deemed illegal, and vertical agreements assessed through a "rule of reason" test. Key practices examined include price fixing, predatory pricing, market division, group boycotts, exclusionary contracts, and mergers.
- 19.5: Price Discrimination
- This page discusses price discrimination, which is the practice of charging different prices for the same goods based on various factors. It classifies into direct and indirect types, as per the Robinson-Patman Act, which defines three discrimination lines related to buyer pricing, bulk purchasing negotiations, and consumer discounts. Price discrimination is permissible if it promotes fair competition or is based on good faith.
- 19.6: Enforcement
- This page discusses antitrust laws that impose penalties to curb anticompetitive practices. Injured businesses can sue for damages, receiving treble damages and attorneys' fees if successful. The government, mainly the Department of Justice and the Federal Trade Commission, enforces these laws through investigations and remedies like injunctions and fines.
- 19.7: Concluding Thoughts
- This page discusses antitrust laws that regulate a free enterprise system to prevent unethical practices and ensure competition. It emphasizes that while markets generally thrive with minimal government intervention, some regulation is necessary to prevent monopolies that can harm consumers and the economy. The laws aim to protect both interests while allowing free enterprise to operate effectively.