Deck 33: Antitrust Law

Question 1

The Sherman Act is the only major antitrust act that includes criminal sanctions.

Answer 1

True

Question 2

Although the federal government has enacted antitrust laws,most antitrust actions are brought under state law.

Answer 2

False

Question 3

The Federal Trade Commission is empowered to enforce federal antitrust laws.

Answer 3

True

Question 4

The Jackson Act is a federal statute,enacted in 1890,that makes certain restraints of trade and monopolistic acts illegal.

Question 5

Federal antitrust laws provide for both government and private lawsuits.

Question 6

The Clayton Act is a federal statute,enacted in 1914,that regulates mergers and prohibits certain exclusive dealing arrangements.

Question 7

Effective antitrust law existed as part of the common law in the early days of the United States.

Question 8

The Federal Trade Commission Act (FTC Act)is a federal statute,enacted in 1970,that prohibits unfair methods of competition.

Question 9

The Robinson-Patman Act is a federal statute,enacted in 1930,that prohibits price discrimination.

Question 10

Negligence is the prerequisite for criminal liability under the Sherman Act.

Question 11

The government may seek quadruple damages for violations of antitrust laws.

Question 12

From the 1940s through the 1970s,antitrust enforcement was quite stringent.

Question 13

Because the common law could not deal effectively with monopolies,the United States Congress enacted a comprehensive system of antitrust laws to limit anticompetitive behavior.

Question 14

The federal antitrust statutes are narrowly defined to reflect the government's enforcement policy and to allow it to respond to economic,business,and technological changes.

Question 15

Government enforcement of federal antitrust laws is divided between the Antitrust Division of the Department of Justice and the Bureau of Competition of the Federal Trade Commission (FTC).

Question 16

Most of the major antitrust statutes provide for criminal penalties.

Question 17

The government may seek civil damages for violations of antitrust laws.

Question 18

Private parties may not intervene in public antitrust actions brought by the government.

Question 19

The aggressiveness with which antitrust laws are enforced varies considerably,based on the differing political ideologies of the administrations that occupy the Office of the President of the United States.

Question 20

From the 1980s through the first decade of the 2000s,government enforcement of antitrust laws was more relaxed.

Question 21

Because of the possibility of bias,a government judgment against a party in an antitrust action cannot be used as evidence against that party by a private party in a civil action.

Question 22

Section 1 of the Robinson-Clayton Act permits any person who suffers antitrust injury in his or her "business or property" to bring a private civil action against the offenders.

Question 23

Section 16 of the Clayton Act permits the government or a private plaintiff to obtain an injunction against anticompetitive behavior that violates antitrust laws.

Question 24

If Section 1 of the Sherman Act were read literally,it would prohibit almost all contracts.

Question 25

Only the Interstate Commerce Commission can obtain an injunction under the FTC Act.

Question 26

There are no defenses available to the accused if a "per se" restraint of trade occurs.

Question 27

Actual damages or treble damages are recoverable for violations of the Federal Trade Commission Act.

Question 28

A private antitrust civil treble-damage action,in which there is no suit by the government,must be brought within four years from the date that the plaintiff's injury occurred.

Question 29

The two (2)tests the United States Supreme Court has developed for determining the lawfulness of a restraint of trade are the rule of inquiry and the per diem rule.

Question 30

The per se rule holds that only unreasonable restraints of trade violate Section 1 of the Sherman Act.

Question 31

Antitrust defendants often opt to settle government-brought antitrust actions by entering into a plea of nolo contendere in a government civil action.

Question 32

A government judgment obtained against a defendant for an antitrust violation may be used as prima facie evidence of liability in a private civil treble-damages action.

Question 33

Section 1 of the Sherman Act outlaws contracts,combinations,and conspiracies in restraint of trade.

Question 34

In the landmark case Exxon Mobil Corporation of Texas v.United States,the United States adopted the "rule of reason" standard for analyzing Section 1 of the Sherman Act cases.

Question 35

The Sherman Act applies to unlawful conduct by one (1)or more parties.

Question 36

A private plaintiff in an antitrust action must have dealt directly with the alleged violators in order to have standing to sue,and indirect injury resulting from higher prices being passed on is insufficient.

Question 37

The Sherman Act has been called the "Magna Carta of free enterprise."

Question 38

The per se rule is applicable to restraints of trade that are considered inherently anticompetitive.

Question 39

Consumers who have to pay higher prices because of an antitrust violation have recourse under Section 4 of the Clayton Act.

Question 40

Antitrust defendants often opt to settle government-brought antitrust actions by entering into a consent decree in a criminal action.

Question 41

Under the "rule of reason" for violations under the Sherman Act,certain restraints of trade can be legal in some circumstances,and illegal in others.

Question 42

If the three (3)largest automobile manufacturers agreed among themselves what price they would pay to purchase tires from tire manufacturers,this would be buyers' illegal per se price fixing.

Question 43

A vertical restraint of trade occurs when two (2)or more parties at different levels of distribution enter into a contract,combination,or conspiracy to restrain trade.

Question 44

If a restraint of trade is inherently anticompetitive,it becomes a violation by applying the rule of reason.

Question 45

With a "per se" antitrust violation under Section 1 of the Sherman Act,a balancing of those effects helping competition and those hurting competition is considered in determining if an action was illegal.

Question 46

A group boycott is also known as a refusal to deal.

Question 47

Horizontal price fixing occurs when the competitors in the same line of business agree to set the price of goods or services they sell.

Question 48

A group boycott occurs when two (2)or more competitors at one level of distribution agree not to deal with others at a different level of distribution.

Question 49

All restraints of trade are unlawful.

Question 50

The doctrine of conscious parallelism provides that,even if there is no concerted action,a violation of the Sherman Act occurs if two or more firms decide not to deal with a retailer.

Question 51

Price fixing is a conditional violation of Section 1 of the Sherman Act.

Question 52

Today,resale price maintenance is a per se violation for both price floors and price ceilings.

Question 53

If the three (3)largest automobile manufacturers agreed among themselves what prices to charge automobile dealers for this year's models,this would be seller's illegal per se price fixing.

Question 54

Illegal price fixing includes setting minimum or maximum prices of fixing the quantity of a product or service to be produced or provided.

Question 55

A horizontal restraint of trade occurs when two (2)or more competitors at the same level of distribution enter into a contract,combination,or conspiracy to restrain trade.

Question 56

The United States Supreme Court has applied the per se rule,but not the rule of reason,in determining the legality of vertical restraints of trade under Section 1 of the Sherman Act.

Question 57

Resale price maintenance is also known as vertical price fixing.

Question 58

Although most price fixing agreements occur between sellers,an agreement among buyers to set the price they will pay for goods or services is also price fixing.

Question 59

Restraints of trade that are not characterized as per se violations are examined using the rule of reason.

Question 60

Competitors who agree that each will serve only a designated portion of the market are engaging in market subordination.

Question 61

A firm can violate Section 2 of the Sherman Antitrust Act only by acting in collusion with another firm.

Question 62

For purposes of Section 7 of the Clayton Act,the relevant geographical market is traditionally identified as the entire country.

Question 63

If a firm unilaterally chooses not to deal with another firm,they are not in violation of the law.

Question 64

Horizontal price fixing occurs when a manufacturer sets the retail price of the items they produce.

Question 65

Fred owns a tractor business that has been in his family for fifty years,and it is the only tractor business in his small rural town.Others have tried to compete with him,but despite the fact that Fred did nothing out of the ordinary,the others failed and went out of business.Nevertheless,Fred's business is an illegal monopoly in violation of the Sherman Act.

Question 66

A company that bundles its products and requires the bundle be purchased such that competitors are excluded violates Section 2 of the Sherman Act.

Question 67

Section 7 of the Clayton Act tries to prevent potentially anticompetitive mergers before they occur.

Question 68

Proof of actual lessening of competition must be shown in order to prevent a merger in action based on Section 7 of the Clayton Act.

Question 69

By definition,monopolies can impact the price of goods and services.

Question 70

Under Section 2 of the Sherman Act,monopolies are not outlawed,although acts of monopolizing are outlawed.

Question 71

All group boycotts are per se illegal.

Question 72

The legality of non-price vertical restraints of trade under Section 1 of the Sherman Act is examined using the "rule of reason."

Question 73

"Line of commerce" refers to products,but not to services.

Question 74

A book publisher acquiring a retail bookstore chain would be a backward vertical merger.

Question 75

Under Section 7 of the Clayton Act,mergers can be prevented only if the companies proposing to merge are currently competitors.

Question 76

In a Sherman Act Section 2 action,a court must define both the relevant geographic market and the relevant product or service market.

Question 77

The Noerr Doctrine protects competitors in all circumstances where they jointly petition the government regarding the enactment or repeal of law,or to get the government to take some other action.

Question 78

Under the Sherman Act,horizontal price-fixing arrangements are per se illegal.

Question 79

A horizontal merger is a merger between two or more companies that compete in the same business and geographical market.

Question 80

Determining the line of commerce that will be affected by the merger involves defining the relevant product or service market.