Question 1

Horizontal price fixing is also called resale price maintenance.

Accepted Answer

Horizontal price fixing occurs when competitors agree on pricing, while resale price maintenance involves a manufacturer dictating the price at which a retailer can sell its product.

Question 2

From the language of Section 1 of the Sherman Act, it is apparent that the purpose of Section 1 is to attack unilateral action in restraint of trade.

Accepted Answer

The purpose of Section 1 of the Sherman Act is actually to attack agreements and conspiracy between two or more parties that restrain trade. Unilateral action is addressed under Section 2.

Question 3

In terms of standing to sue under the Sherman Act, private plaintiffs must convince the court that they have suffered an indirect injury as a result of the defendant's claimed antitrust violations.

Accepted Answer

Private plaintiffs must prove that they have suffered a direct injury to their business or property as a result of the antitrust violation, not just an indirect injury.

Question 4

The _____ gives the federal courts broad injunctive powers to remedy antitrust violations.

Accepted Answer

The Sherman Act makes contracts in restraint of trade and monopolization illegal. It provides criminal penalties of violations of its provisions (up to a $1 million fine and/or 10 years' imprisonment for individuals and up to a $100 million fine for corporate violators). It also gives the federal courts broad injunctive powers to remedy antitrust violations.

Question 5

Section 2 of the Sherman Act was basically designed to attack three kinds of anticompetitive behavior: tie-in (or tying) contracts, exclusive dealing contracts, and requirements contracts.

Accepted Answer

Section 2 of the Sherman Act primarily targets monopolization or attempts to monopolize any part of interstate commerce, rather than specifically addressing tie-in contracts, exclusive dealing contracts, and requirements contracts. These specific types of anticompetitive behaviors are more directly addressed under Section 1 of the Sherman Act and the Clayton Act.

Question 6

The _____ provides that the Sherman Act shall not apply to nonimport trade unless the conduct has a direct, substantial, and reasonably foreseeable effect on trade or commerce within the United States, on the U.S. import trade, or on the activities of U.S. exporters.

Accepted Answer

Seeking to clarify the confusion surrounding the extraterritorial reach of the antitrust laws, Congress enacted the Foreign Trade Antitrust Improvement Act. Specifically, this statute provides that the Sherman Act shall not apply to nonimport trade unless the conduct has a direct, substantial, and reasonably foreseeable effect on trade or commerce within the United States, on U.S. import trade, or on the activities of U.S. exporters.

Question 7

The Sherman Act:

Accepted Answer

The Sherman Act makes contracts in restraint of trade and monopolization illegal. It provides criminal penalties of violations of its provisions. It also gives the federal courts broad injunctive powers to remedy antitrust violations.

Question 8

Section 3 of the Clayton Act applies only to commodities (goods), so tie-in, exclusive dealing, and requirements contracts that involve services must be attacked under Section 1 of the Sherman Act.

Accepted Answer

Section 3 of the Clayton Act specifically addresses practices involving the sale or lease of goods, wares, merchandise, machinery, supplies, or other commodities. Therefore, anticompetitive practices involving services rather than goods must be addressed under Section 1 of the Sherman Act, which broadly prohibits anticompetitive agreements.

Question 9

When faced with the difficult problem of deciding what kinds of joint actions amounted to a restraint of trade, the courts concluded that some kinds of behavior always have a negative effect on competition and can never be excused or justified. These kind of acts are classed as per se illegal.

Accepted Answer

The statement accurately describes the concept of per se illegal behavior in antitrust law.

Question 10

The Noerr Doctrine prohibits people and businesses from joining together and lobbying governmental officials.

Accepted Answer

The Noerr Doctrine actually protects people and businesses' rights to join together and petition the government, including lobbying governmental officials. It is a doctrine that recognizes First Amendment protections for political speech and activity.

Question 11

Any behavior that has not been classified as a per se violation of Section 1 of the Sherman Act is judged under a strict liability analysis.

Accepted Answer

Any behavior that has not been classified as per se violation of Section 1 of the Sherman Act is judged under the rule of reason analysis, not strict liability analysis. Strict liability is only applicable to certain types of violations such as price fixing and bid rigging.

Question 12

Attempts by competitors to interfere with the market and control prices are called parallel price-fixing and are illegal per se under Section 1 of the Sherman Act.

Accepted Answer

Attempts by competitors to interfere with the market and control prices are called collusion or price-fixing, not parallel price-fixing. However, they are still illegal per se under Section 1 of the Sherman Act.

Question 13

Since the federal government's power to regulate business flows from the Privileges and Immunities Clause of the Constitution, the federal antitrust laws apply to behavior that affects in any way interstate commerce or international trade.

Accepted Answer

The federal government's power to regulate business, especially in the context of antitrust laws, primarily stems from the Commerce Clause of the Constitution, not the Privileges and Immunities Clause. The Commerce Clause grants Congress the power to regulate commerce with foreign nations, and among the several states, and with the Indian Tribes.

Question 14

Federal antitrust laws apply to:

Accepted Answer

The federal government's right to regulate business is derived from the Commerce Clause of the U.S. Constitution. The federal antitrust laws apply only to behavior that substantially affects interstate commerce or international trade. Behavior that affects only intrastate (purely local) commerce is outside the scope of the federal antitrust laws and must be challenged under state antitrust statutes, some of which are not vigorously enforced.

Question 15

The federal government's right to regulate business is derived from the _____ Clause of the U.S. Constitution.

Accepted Answer

The federal government's right to regulate business is derived from the Commerce Clause of the U.S. Constitution. The federal antitrust laws apply only to behavior that substantially affects interstate commerce or international trade. Behavior that affects only intrastate (purely local) commerce is outside the scope of the federal antitrust laws and must be challenged under state antitrust statutes, some of which are not vigorously enforced.

Question 16

Behavior that affects intrastate commerce is within the scope of the federal antitrust laws and may be challenged under federal antitrust statutes.

Accepted Answer

The answer of Behavior that affects intrastate commerce is within...

Question 17

Private plaintiffs who seek to recover treble damages under the Sherman Act need not convince the court that they have standing to sue.

Accepted Answer

Private plaintiffs must demonstrate that they have suffered an injury to their business or property that the antitrust laws were designed to prevent, thereby establishing standing to sue for treble damages under the Sherman Act.

Question 18

To violate Section 2(a) of the Robinson-Patman Act, the discriminatory sales must occur roughly within the same period of time and involve goods of like grade and quality.

Accepted Answer

The language of Section 2(a) specifies that the discriminatory sales must occur "at or about the same time" and involve "goods of like grade and quality."

Question 19

Section 2 of the Sherman Act outlaws monopolies.

Accepted Answer

The answer of Section 2 of the Sherman Act outlaws...

Question 20

A requirements contract is created when a buyer agrees to purchase all of its needs in a certain item from one seller.

Accepted Answer

A requirements contract is a contract between a purchaser and supplier whereby the purchaser agrees to buy all of its requirements of a particular good or service from the supplier.

Quiz 45: The Antitrust Laws