Question 1

Which U.S.Act prohibits mergers and acquisitions when the effect may be substantially to lessen competition or to tend to create a monopoly?
A) The Clayton Act
B) The Hart-Scott-Rodino Act
C) The Smoot-Hawley Act
D) The Kyoto Protocol

Accepted Answer

The Clayton Antitrust Act was passed in 1914 and is aimed at preventing anticompetitive mergers and acquisitions. Section 7 of the Clayton Act prohibits mergers and acquisitions that have the potential to lessen competition substantially or create a monopoly. The Act also gives the Federal Trade Commission (FTC) and the Department of Justice (DOJ) the power to investigate and challenge such mergers or acquisitions.

Question 2

Under the EU merger regulations,preapproval is not needed under which of the following conditions?
A) Where a non-EU firm is involved in the merger.
B) Where the firms are involved in agricultural trade.
C) Where the merger falls under a de minimis exception or has the benefit of a block exception.
D) All of these are correct.

Accepted Answer

The option C is correct as mergers falling under a de minimis exception or having the benefit of a block exception do not require pre-approval under EU merger regulations. Options A and B are incorrect because the EU merger regulations apply to all mergers that have an impact on the EU market, regardless of whether the firms involved are based in the EU or not, and regardless of the sector involved. Option D is incorrect because only option C is correct.

Question 3

In 1982,the U.S.Congress passed a law to clarify the standard to be applied in determining the extraterritorial effect of American antitrust laws.This was:
A) The Foreign Trade Antitrust Improvements Act.
B) The Miller-Hastings Antitrust Extraterritorial Act.
C) The Antitrust Effect Act.
D) The Jones-Burden Competition Act.

Accepted Answer

The correct law passed by the U.S. Congress in 1982 to clarify the standard to be applied in determining the extraterritorial effect of American antitrust laws is the Foreign Trade Antitrust Improvements Act.

Question 4

In the U.S.,which type of merger is considered to pose the biggest threat to competition because they are the most likely to create or enhance dominance in the market?
A) Horizontal
B) Vertical
C) Multi-industry
D) All of these are correct

Accepted Answer

Horizontal mergers involve the consolidation of companies in the same industry and can result in the creation of a dominant player in the market. This can lead to reduced competition, increased prices, and decreased consumer choice. Therefore, horizontal mergers are considered to pose the biggest threat to competition. Vertical and multi-industry mergers can also have anticompetitive effects, but they are generally less concerning than horizontal mergers.

Question 5

Under U.S.antitrust law,certain mergers and joint venture agreements must be brought before whom before they are concluded?
A) Congress
B) President
C) Federal Trade Commission
D) Department of Justice

Accepted Answer

The answer of Under U.S.antitrust law,certain mergers and joint venture...

Question 6

The 1982 act passed by Congress in order to clarify the standard to be applied in determining the extraterritorial effect of American antitrust law provides that:
A) American antitrust law extends to all countries that do not have enforceable antitrust laws of their own.
B) American antitrust law does not apply outside the U.S.
C) American antitrust law applies only to conduct that has a direct, substantial, foreseeable effect on U.S. commerce.
D) American antitrust law applies only to firms whose economic power is so substantial that they could directly and significantly dominate foreign markets.

Accepted Answer

The 1982 Act passed by Congress established the Foreign Trade Antitrust Improvements Act (FTAIA), which clarified that American antitrust law applies only to conduct that has a direct, substantial, and foreseeable effect on U.S. commerce. Therefore, option C is the correct answer. Options A, B, and D are incorrect as they contradict the provisions of the FTAIA. Option A is incorrect because American antitrust law does not extend to all countries that do not have enforceable antitrust laws. Option B is incorrect because American antitrust law does apply outside the United States in certain circumstances. Option D is incorrect because American antitrust law does not apply only to firms whose economic power is so substantial that they could directly and significantly dominate foreign markets.

Question 7

The American antitrust law policy toward patent licenses:
A) tends to be more forgiving of a patent holder's restrictions on its licenses.
B) views the patent monopoly as a danger to competition.
C) lends itself to abuse by the patent holder.
D) none of these are correct.

Accepted Answer

American antitrust law generally allows patent holders some leeway in imposing restrictions on their licenses, recognizing the exclusive rights granted by patents. This approach is based on the understanding that patents incentivize innovation by allowing inventors to protect and profit from their inventions, even though it also carefully monitors for abuses that could harm competition.

Question 8

The European Commission has given exemptions in all of the following areas except:
A) exclusive purchasing agreements.
B) patent license agreements.
C) motor vehicle distribution agreements.
D) merger agreements.

Accepted Answer

The European Commission has given exemptions in exclusive purchasing agreements, patent license agreements, and motor vehicle distribution agreements under certain conditions. However, it has not given exemptions for merger agreements as they must be evaluated on a case-by-case basis to prevent anti-competitive practices.

Question 9

The U.S.antitrust law distinguishes between actions that are:
A) per se wrong and actions to which the role of reason applies.
B) marginally wrong and actions to which the rule of reason applies.
C) partially wrong and actions to which the rule of best judgment applies.
D) good and bad.

Accepted Answer

The U.S. antitrust law distinguishes between actions that are per se wrong, meaning they are automatically deemed illegal without the need for further analysis, and actions to which the rule of reason applies, meaning they require a more in-depth analysis to determine whether they violate antitrust laws. Choices B, C, and D are all inaccurate descriptions of how the U.S. antitrust law works.

Question 10

Under U.S.antitrust law:
I.Most actions are brought by private individuals.
II.Successful litigants can collect treble damages.
A) I only.
B) II only.
C) Both I and II.
D) Neither I nor II.

Accepted Answer

Under U.S. antitrust law, both statements are true. Private individuals can bring actions under antitrust laws, and successful litigants can collect treble damages.

Question 11

"Blocking Legislation" in international antitrust action refers to:
A) laws that block certain goods from entering a country.
B) provisions that prevent the discovery of documents by foreign countries and bar enforcement.
C) setting aside certain blocks of businesses exempt from antitrust laws.
D) none of these are correct.

Accepted Answer

Blocking Legislation in international antitrust action refers to provisions that prevent the discovery of documents by foreign countries and bar enforcement. Such legislation is enacted by governments to protect their domestic industries and businesses from foreign antitrust actions. It hinders foreign antitrust investigations by restricting the availability of information and cooperation from local entities.

Question 12

Which of the following Acts created a review process under which mergers,joint venture agreements,and similar transactions must be brought before the Department of Justice for review before they are concluded?
A) The Clayton Act
B) The Smoot-Hawley Act
C) The Hart-Scott-Rodino Act
D) The Kyoto Protocol

Accepted Answer

The Hart-Scott-Rodino Act (HSR Act) created a review process under which mergers, joint venture agreements, and similar transactions must be brought before the Department of Justice for review before they are concluded. The act requires that parties involved in a merger or acquisition notify the Federal Trade Commission and the Department of Justice before the transaction is concluded. This provides government regulators with an opportunity to review the transaction for antitrust concerns before it is completed.

Question 13

The European Union regulation that deals with "A concentration which creates or strengthens a dominant position...(impeding)competition...in the common market..." is:
A) EU Antitrust Act.
B) EU Workers Regulation.
C) EU Unfair Trade Regulation.
D) EU Merger Regulation.

Accepted Answer

The EU Merger Regulation deals with concentrations that create or strengthen a dominant position and impede competition in the common market. It ensures that mergers and acquisitions do not result in a concentration that would significantly impede effective competition in the European Union.

Question 14

The substance of many countries' antitrust law is very similar in focusing on two types of activity.The two types of activities are:
A) prohibitions against price cutting and resale price agreements.
B) prohibitions against agreements attempting to restrict competition and the abuse of a dominant market position.
C) prohibitions against economizing to achieve greater market share and lack of marginal return.
D) All of these are correct.

Accepted Answer

Most antitrust laws primarily focus on prohibiting two types of activities: agreements attempting to restrict competition (including price-fixing and market division) and the abuse of dominant market positions (including predatory pricing and exclusive dealing). These activities are seen as the most harmful to consumer welfare and fair competition. The other answer choices do not accurately reflect the substance of antitrust law.

Question 15

EU competition law applies only to agreements and transactions that:
A) involve an EU-based company.
B) have an effect on intra-EUC trade.
C) the EU wishes to have its approval and involvement.
D) have a direct impact on foreign commerce.

Accepted Answer

EU competition law applies to agreements and transactions that have an effect on intra-EU trade. It doesn't necessarily have to involve an EU-based company, require EU approval or involvement, or have a direct impact on foreign commerce.

Question 16

In recent years,Japan has brought its stance on mergers more into line with international practices by revising its Antimonopoly Act to require:
A) horizontal mergers.
B) confidential prior consultation.
C) prior notification.
D) all of these are correct.

Accepted Answer

Japan revised its Antimonopoly Act to require prior notification for mergers, aligning its practices more closely with international standards. This change aims to prevent anti-competitive mergers before they occur.

Question 17

When evaluating the effect of a merger,the European Union seeks to determine:
A) the impact of the merger by totaling the total number of competitors left.
B) amount of capital invested in the combined companies in relation to the remaining competitors.
C) the compatibility of the merger with the common market, which is presumed if market share will not exceed 25 percent.
D) none of these are correct.

Accepted Answer

The European Union evaluates the compatibility of the merger with the common market by considering factors such as market share, competition, and consumer benefits. A merger is presumed to be compatible with the common market if the combined market share of the merging companies is below 25 percent. This is known as the "one-stop-shop" principle. Options A and B do not accurately reflect the EU's evaluation criteria for mergers. Option D is incorrect as there is a correct answer.

Question 18

The primary reason for the absence of much litigation under foreign competition law is:
I.The preapproval process reduces the necessity for litigation.
II.Differences in the remedies and types of sanctions for violations.
III.Cultural attitudes toward antitrust law differ.
A) I only.
B) II only.
C) III only.
D) I and I.
E) I, II, and III.

Accepted Answer

The answer of The primary reason for the absence of...

Question 19

The European Union uses an exemption system in its competition law.This means that:
A) certain industries are exempted from antitrust law because of their technology.
B) an agreement can be entered into if the prospective parties can obtain a "negative clearance" from the European Commission.
C) certain countries are exempt from the competition law until they reach further economic development.
D) none of these are correct.

Accepted Answer

The exemption system in the EU competition law allows for agreements to be exempted from antitrust law if the involved parties can obtain a "negative clearance" from the European Commission. This means that the Commission examines the agreement and declares it does not violate competition rules. However, this exemption system does not apply to certain industries or countries based on their technology or economic development.

Question 20

Under U.S.antitrust law,the rule of reason applies to situations where:
A) a person must decide to bring a lawsuit or not.
B) through analysis, an action is not found to be anticompetitive.
C) the amount of damages awarded is reasonable.
D) a merger is anticipated and valid if reasonable.

Accepted Answer

The rule of reason is a legal standard applied in antitrust cases to determine whether a specific business practice or arrangement is anticompetitive or not. In cases where the rule of reason applies, a full analysis of the facts, context, and potential impact on competition is required before determining whether the action is legal or not. Thus, option B is the correct answer. The other options do not accurately describe the application of the rule of reason.

Quiz 21: Regulating the Competitive Environment

Which U.S.Act prohibits mergers and acquisitions when the effect may be substantially to lessen competition or to tend to create a monopoly?

Under the EU merger regulations,preapproval is not needed under which of the following conditions?

In 1982,the U.S.Congress passed a law to clarify the standard to be applied in determining the extraterritorial effect of American antitrust laws.This was:

In the U.S.,which type of merger is considered to pose the biggest threat to competition because they are the most likely to create or enhance dominance in the market?

Under U.S.antitrust law,certain mergers and joint venture agreements must be brought before whom before they are concluded?

The 1982 act passed by Congress in order to clarify the standard to be applied in determining the extraterritorial effect of American antitrust law provides that:

The American antitrust law policy toward patent licenses:

The European Commission has given exemptions in all of the following areas except:

The U.S.antitrust law distinguishes between actions that are:

Under U.S.antitrust law: I.Most actions are brought by private individuals. II.Successful litigants can collect treble damages.

"Blocking Legislation" in international antitrust action refers to:

Which of the following Acts created a review process under which mergers,joint venture agreements,and similar transactions must be brought before the Department of Justice for review before they are concluded?

The European Union regulation that deals with "A concentration which creates or strengthens a dominant position...(impeding) competition...in the common market..." is:

The substance of many countries' antitrust law is very similar in focusing on two types of activity.The two types of activities are:

EU competition law applies only to agreements and transactions that:

In recent years,Japan has brought its stance on mergers more into line with international practices by revising its Antimonopoly Act to require:

When evaluating the effect of a merger,the European Union seeks to determine:

The primary reason for the absence of much litigation under foreign competition law is: I.The preapproval process reduces the necessity for litigation. II.Differences in the remedies and types of sanctions for violations. III.Cultural attitudes toward antitrust law differ.

The European Union uses an exemption system in its competition law.This means that:

Under U.S.antitrust law,the rule of reason applies to situations where: