Details Title: Bus 404 Test Description: test #2 Total Flash Cards: 39 Created: 05/17/2009 12:48:55		New Users: To study from this flashcard set, or to create your own your own study flash cards, REGISTER HERE. Existing Users: CLICK HERE. Additional Business Flashcards
Cards in this set: Term   Antitrust Statutes   Definition   A series of laws enacted to limit anticompetitive behavior in almost all industries, businesses, and professions operating in the United States   Term   Antitrust Statutes   Definition   Originally designed to protect the viability of a market system composed of small businesses.   Term   Social Policy & Antitrust Laws   Definition   As social policy, the antitrust laws express concern about concentrations of economic power and the potential for abuse inherent in that concentration. The constitution controls political power through checks and balances among the branches of government and through popular elections, antitrust policy has focused on controlling economic power.   Term   1890 Sherman Act    Definition   unreasonable restraint of trade -monopolizing is a felony   Term   1914 Clayton Act    Definition   substantially lessen competition -discriminating in the price between different purchasers -prohibits mergers that may lessen competition or create a monopoly   Term   1914 Federal Trade Commission Act    Definition   unfair methods of competition   Term Language of Satutes Definition   Lack of specificity General terms Ambiguity Left open to interpretation in their application Current application of the antitrust statutes: Economic efficiency – the more competition there is the better it is for the consumer. Competition keeps an industry healthy.     Term Economic efficiency Definition   the more competition there is the better it is for the consumer. Competition keeps an industry healthy   Term Monopoly Definition   to affect the price of goods or services.   Term Monopoly Power Definition   has the ability to control prices or exclude competition.   Term Act of monopoly  Definition willful act to acquire or maintain the power Term Antitrust Policy Making Institutions Definition Congress: legislation, appropriation, exemption Federal Court System:  interpret ambiguities leaning to economic efficiency Administrative Agencies:  DOJ & FTC Executive: appointments – political philosophy Private Sector: private actions to recover Term Department oF Justice Definition Cabinet level More aligned with President Sherman & Clayton Acts Criminal enforcement Complaint driven  Disclosure statement revealed Term Federal Trade Commission Definition - Created by the federal trade commission act Independent Regulatory Agency 5 commissioners no more than 3 of the same political party 7-year term Sherman, Clayton & FTC Acts Complaint driven  Disclosure statement revealed Term Private Party Action: Definition Injunction Specific performance Damages  The above plus Costs, attorney’s fees, treble damages Term Definition Term Consent Decree Definition An agreement reached by the litigants under the sanction of a court. Reduces liability, it is not a law violation. Benefits the market, generally involves restrictions on the actions by defendant. Term In restraint of trade Definition Only unreasonable restraint of trade is prohibited. Weigh out the benefits against the harms Term Rule of Reason:  Courts examine Definition The pro- and anticompetitive effects of the challenged restraint The competitive structure of the industry The firm’s market share and power The history and duration of the restraint Did the defendant commit the act in question? Was the action unreasonable? Term Per Se Illegality Definition Potential for being so harmful to competition no argument can be made for their benefits. No justifications of any kind can prevent the per se rule from applying. The acts are presumed to be unreasonable. Only defense, the act itself was not done. Term Price Fixing Definition In any shape or form, is deemed anticompetitive and thus unlawful. Term Horizontal Price Fixing  Definition An agreement between competitors to charge specified prices. Term Horizontal Division of Market Areas  Definition An agreement between competitors setting forth which territorial areas each may sell. Term Horizontal Restraints Definition Horizontal Price Fixing Horizontal Division of Market Areas The antitrust laws postulate a competitive marketplace in which rival firms compete with respect to prices, products, and services.  Any behavior contrary to this is highly suspect. Term   Vertical Restraints   Definition Vertical Price Agreements Vertical Non Price Restraints   Stimulates inter-brand competition but reduces intra-brand competition   Term   Vertical Price Agreements    Definition   A seller and a buyer agree with respect to the price at which the buyer will resell.   Term   Vertical Non-price Restraints    Definition   (different levels of the distribution chain)  Supplier of a product or service agrees with a buyer about where or to whom the buyer may resell the product or service.   Term intrabrand competition Definition competition between sellers of the same brand Ex: 2 toyota dealers competing against eachother Term interbrand competition Definition dealers competing against the sellers of other makes of automobiles Term FtC enforcement Definition * only the FTC can enforce the FTC Act -sherman act clayton act Term Monopoly Definition A firm has such a predominant share of the market that it has the power to control prices or exclude competition. Has the firm achieved or maintained its size by engaging in business practices that cannot be justified on efficiency grounds or are otherwise not normal for that industry? Term Anticompetitive Conduct Definition Unchallenged economic power deadens initiative. Anticompetitive conduct vs. superior skill, foresight, or industry Term Clayton Act Section #7 Definition Mergers or acquisitions that may have the effect of substantially lessening competition are illegal. Enforcement of this section is almost exclusively with the administrative agencies. Hart-Scott-Rodino Act requires notification and a waiting period before mergers can go through. Horizontal mergers:  mergers of direct competitors. Ultimate Question:  Whether the effect of the merger may be to substantially lessen competition in the relevant market? Act is intended to arrest anticompetitive effects of market power in its incipiency.   Term Vertical Merger Definition Combinations of firms in buyer-supplier relationship Term Definition Term Injuntion Definition stomp them from doing a certain thing Term Damages Definition what was the economic loss to the competitiors Term Definition Term History Definition -changing economic conditions- industrial revolution -farmers, small business, industrials -large firms may possess to much political power