Term
| important act that began the antitrust law |
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Definition
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Term
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Definition
| increase cometition in all areas and eliminate monoplies |
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Term
| Why did they want to increase competition |
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Definition
-price reduction
-innovation
-more competitors
-equitable distribrution of income
-provide workable cometition
-prevent accumulation of economic power |
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Term
| 2 basic provisions of the the sherman act |
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Definition
-prevent a monopoly
-illegally enter into a contract in restraint of trade
-- entering into contracts agreeing not to compete with each other |
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Term
| Sactions for violation of the sherman act |
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Definition
-criminal
-equitable:
--injunctions: stop someone from doing something
-- divestiture: break up w/ the company or break-up parts of the company
-Treble damages: triple x3
-- actual provable damages x3
--if the state is who was damaged the Attorney General will prosecute |
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Term
| Pleas for violations of the sherman act |
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Definition
guilty, not guilty, nolo contrendre
they can be part of a civil case at the same time |
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Term
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Definition
not every contract in restratint of trade is illegal:
For example: a non compete is a a reasonable restraint of trade |
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Term
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Definition
when 2 or more companies agree on a price to create a good margin for themselves
Illegal PER SE-where prices are reasonable or not it is ALWAYS illegal
includes dividing up markets and dividing up supply
what is beneficial today isn't necessarily beneficial tomorrow |
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Term
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Definition
easier to prove a violation: congress was divided- removed the criminal sanction
federal trade commission and justice can enforce the clayton act
anti trust laws: don't apply to labor unions |
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Term
| Sherman act changed 2 times |
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Definition
1: 1911-- rule of reason
2: 1914 -- Clayton act |
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Term
| Clayton act how is it easier to prove a violation? |
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Definition
| -More specific in defining practices: where the company "might substatioally lessen competition, or tend create a monopoly" |
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Term
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Definition
| Interlocking directorates : can't be on the board of 2 competiting companies |
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Definition
| someone was on the board of both, they both make tires -- could result in price fixing |
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Term
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Definition
price discrimination: from the sellers perspective:
- can't sell the SAME thing at two different prices
illegal if you substantially lessen competition or tend to create a monopoly |
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Term
| What company caused the clayton act to amend section 2? |
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Definition
A&P - with the Robinson & Patman Act: changed price discrimation:
killed off all little stores; started with low prices and then once competition was gone they raised their prices-- that is price discrimination |
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Term
| When are low prices against the law? |
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Definition
| when their purpose is to drive out competition so they can raise prices at a later date |
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Term
| Defenses for sellers against price discrimination |
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Definition
Affirmative defense:
-costs
-shipping
-manufacture
-admini
-changing conditions: perishables
-distress sales/obsolete/fire
-good faith (meeting competition) |
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Term
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Definition
tying contracts unlawful to sell or lease a product tied to another where effect may be to lessen competition or tend to create a monopoly
there is one product that people want, you force them to buy another product to have the "right" to purchse the product they want
-generally unlawful if one of the products is patented |
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Term
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Definition
requires purchaser to buy full line of products to get the major product: they get crap they don't want
Ex: franchisers-- to run a mcdonalds you "need" all this junk -- they can over price since they are the only supplier |
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Term
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Definition
| no company may aquire the stock or assest of another if it lessens competition or tends to create a monopoly |
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Term
| Merger Guidelines: conglomerates |
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Definition
Single ownership of lots of unrelated companies
ex- ITT had 140 companies and they wanted another insurance company however the gov challenged it but they setteled
Gov: didn't want them to win and set the president
Company: they didn't want to get forced to break up all companies |
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Term
| Merger Guidelines: horizontal mergers |
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Definition
depends on size of market share-- safer to have no more than 10% of market share, gov will be watching you
-concentrating market share: when market contracts into fewer competitors |
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Term
| -concentrating market share: |
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Definition
| when market contracts into fewer competitors |
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Term
| Merger guidlines: vertical merger |
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Definition
attaining a business in your supply chainbad when: it would raise barriers to entry or disadvantage th other firms
-consider probable competitive effect in market of purchaser and supplier especially where either controls 10% of the respective market |
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Term
| failing company doctrine: |
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Definition
| if one company is going to fail in disappear a merger is allowed |
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Term
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Definition
| bleach example - explain- p & g wanted to buy clorx it was already established, but then they would benefit their product using the new "clorx" |
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Term
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Definition
| enforces section 5 of the FTC Act-- prove and stop a violation of inpiency -- can get you into trouble if they think you are "planning" on doing something |
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Term
| What can the FTC order you to do |
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Definition
Cease and Desist order: daily fine
consent order- happens when they decide to settle |
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Term
| What can the FTC order you to do |
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Definition
Cease and Desist order: daily fine
consent order- happens when they decide to settle |
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Term
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Definition
| they have a lot of power-- they can issue regulations for entire industries: ex - tabaco |
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Term
| FTC - “unfair methods of competition” |
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Definition
| o Related to how companies are marketing to give them an unfair advantage over competitors |
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Term
| FTC “Deceptive Trade Practices” |
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Definition
| o If you have certain Key Words in your ads the FTC will come in and review it |
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Term
| FTC: “Regular price” or manufacturers’ list price may only be used if it in fact regularly sells at that price, example |
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Definition
- Have a key word list to search advertisements (some of these words are “free” and “regular price”
FTC v. Mary Carter Paint |
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Term
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Definition
- Sears is the corporation that has been sued by the FTC the most time. Not always clear what the law is until you have precedents. So when you are on the cutting edge, you have the risk to be sued cause you work in the gray area
Classic Bait and switch:
o When the customer gets there to buy it, the store doesn’t have it. It will be at a great price and even when people are slightly thinking about buying it they will want to buy it because it is such a good price. That is the “bait.” When they get to the store, employee says, “Sorry, we are sold out. But we have this other model that costs $200.” Have already made the decision to buy a washing machine and you have made the trip to the store already so you psychologically want to complete the sale and you will buy even when the product is “switched.” |
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Term
| how does sears protect themselves from "bait and switch" |
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Definition
| o Sears covers themselves by saying they will give you a “rain check” and when more of the product comes in you will have one on reserve. If no more of the items come in, you are entitled to one of equal or greater value at the same price. |
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Term
| Recent Developments in Trade Practice Regulation |
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Definition
-- Corrective Advertising Will correct misconceptions in advertisements
- Advertising Substantiation if you are making a claim, you must be able to substantiate it, in other words, be able to prove what you claim
- Comparative Advertising |
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Term
| Unfair or Deceptive Trade Practices: FTC uses |
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Definition
“fool” test but not “crazy man” test
- We will protect all the fools from being tricked, but it the ad is so outrageous only a crazy man would believe it then we can’t help you |
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Term
| - Fair Labor Standards Act, 1938: |
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Definition
restricted child labor and set minimum wage for the first time; the 1938 minimum wage was $.25 an hour
Came from the textile factories out east |
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Term
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Definition
-Rights of employees to organize and bargain collectively
-Outlawed certain acts by employers
-Allowed employees to elect collective-bargaining
-Created NLRB
-Unfair Labor Practices by Employers |
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Term
- Rights of employees to organize and bargain collectively
o |
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Definition
| They must bargain as a group, cannot bargain for yourself |
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Term
| - Outlawed certain acts by employers |
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Definition
o “unfair labor practices”
o Remove most of the weapons that employers could use, no leverage therefore reduces power
Did so by saying certain things were unfair labor practices
Unions then become m ore powerful |
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Term
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Definition
o National Labor Relations Board
o Federal government preempting the field
When this was created, it was deemed the only government agency where they could hold elections in the workplace
o Mediator for complaints
If mediator thinks that employer is violating the Wagner Act, then they would go to the NLRB |
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Term
| - Unfair Labor Practices by Employers |
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Definition
o Wagner is pro-Union/Labor
o Only wanted to boost the Unions, very one-sided, nothing in it for employers
o Boosted Union membership |
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Term
| Things employers can't do according to wagner act |
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Definition
1. Refusing to bargain in good faith
2. Employers cannot interfere with efforts of employees to join a Union
3. Employers cannot dominate the Union
4. Employers cannot discriminate against Union members
5. Cannot discriminate against employees for filing charges
6. Employer cannot agree with the union to create a secondary boycott |
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Term
| Taft-Hartley Act (1947), Stakeholder Issues |
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Definition
| Same as wagner: 100% pro employer and then some |
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Term
| Things unions can't do: taft hartley act |
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Definition
1. Unions refusing to bargain in good faith
2. Union cannot be caught coercing an employee to join union
3. Causing an employer to discriminate against non-union members
4. Requiring excessive fees of members
5. Unions cannot engage in “Featherbedding”
6. Union cannot Picket for recognition
7. Cannot agree with employer to a secondary boycott |
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Term
| - 80 day “Cooling-Off” period |
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Definition
o Hasn’t been seen for a while
o If you have a large enough strike, it could affect national defense
US president can stop the strike and make the workers go back to work for 80 days because it is a national defense issue
If you put people back to work, they are happier and no tempers are flaring and they will cool off and hopefully will get a settlement in 80 days. |
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Term
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Definition
- Supervise elections
- Adjudicate charges
- Jurisdiction over
- Interstate commerce
- “Cease and desist” order
o One side or the other complains and says someone is discriminating. NLRB can issue a cease and desist order that says quit discriminating
o After this, they might adjudicate the charges |
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Term
| Landrum-Griffin Act: 1959 |
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Definition
- Caused as a result of corruption and irresponsibility; included embezzlement and conversion
-- Called the “Bill of Rights” for union members |
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Term
What were the rights given to union memebers from the-- “Bill of Rights” for union members
aka - Landrum-Griffin Act |
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Definition
o Participate in elections and transactions
o Free expression
o Vote on dues
o The right to sue the union
o Fair hearing before disciplinary action
o Copy of collective bargaining agreement |
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