Quiz 47: Professional Liability and Accountability
Group Boycott: Traditionally, courts have considered group boycotts to constitute per se violations of the Sherman Act §1. In this case, No-Glow used unethical persuasion techniques to force supplies to boycott selling appliances to Jorge's Appliances by threatening to take their high-volume purchasing power elsewhere. If Jorge can prove that No-Glow and the suppliers acted in concert to eliminate his business from competition, he will have a successful action.
Using the rule of reason, the courts analyze anticompetitive agreements that allegedly violate Section 1 of the Sherman Act to determine whether they actually constitute reasonable restraints of trade. If the rule of reason had not been developed, almost any business agreement could conceivably be held to violate the Sherman Act.
It is a per se violation of Section 1 of the Sherman Act for competitors to divide up territories or customers. The same violation would take place if the three firms to divide up their territories by customers.