Deck 21: Regulating the Competitive Environment

Question 1

Under the European Commission's block exemption, the parties whose agreements fall under certain exempted categories only have to seek de minimis approval for their transactions to be considered exempt under competition law.

Answer 1

False

Question 2

The analytical framework established by American antitrust law distinguishes between actions that are wrong per se and actions to which the rule of reason applies.

Answer 2

True

Question 3

The form of antitrust laws are enacted based on the particular circumstances of each nation and therefore are not uniform.

Answer 3

True

Question 4

Antitrust laws have been enacted in all of the WTO members after World War II.

Question 5

Through what is called a block exemption, the European Commission grants an automatic competition exemption to a variety of different types of transactions and agreements.

Question 6

The Airtours v. Commissioner of European Communities case involved the question of whether a merger between two members of the oligopoly in the short haul segment of the airline industry would create a "collective dominant" business firm.

Question 7

In the Hartford Fire Insurance Co. case, the U.S. Supreme Court determined that it could not assert jurisdiction over European companies in competition matters unless the companies had a direct physical presence in a U.S. state.

Question 8

Foreign competition law is similar in substance are modeled after American antitrust law and similar in the sanctions for violating the law.

Question 9

European courts addressing a patent issue are generally more favorable to patent holders than U.S. courts.

Question 10

The Tetra Laval BV v. Commission of the European Communities case applied correctly the "leveraging" theory in the rejection of the merger of Tetra Laval and Sidel that would horizontally and vertically dominate the plastic bottle plugs industry.

Question 11

The antitrust laws of the European countries developed much earlier and were the model for the antitrust legislation in the United States.

Question 12

The European Union's competition law exemption system functions very much like the American antitrust law rule of reason.

Question 13

Prohibitions against agreements that restrict competition in the United States by the Justice Department are reviewed in the context of determining such an arrangement would enhance or inhibit a competitive market place.

Question 14

Antitrust law in the European Union are implemented by the Commission of the European Communities and are known as competition law.

Question 15

The U.S. has an analogous system to the European Union's system for resolving antitrust law issues prior to the transaction taking place.

Question 16

The European Union's sophisticated antitrust law is based on and implemented through Article 1 and Article 2 of the Clayton Act.

Question 17

The Europeans have structured their system to provide for resolution of competition law issues after the transaction has taken place, typically through litigation.

Question 18

The European Parliament has criticized the European Commission for its flexible approach in the granting of block exemptions from normal competition rules for vertical agreements.

Question 19

Du e t o th e fac t tha t foreig n competitio n la w violation s offe r few , i f any , damag e awards , ther e i s ver y littl e private litigation.

Question 20

In smaller countries, there tends to be a relatively lower tolerance for market domination.

Question 21

Prohibitions against agreements that restrict competition are relevant in international business transactions.

Question 22

The court that hears appeals from the EU's antitrust enforcement agency and referrals from the courts of the EU member states on competition issues is the:

A) European Court of Justice.
B) Community Supreme Court.
C) European Court of Appeals.
D) Antitrust Appellate Court.

Question 23

Article 81(3) provides for an "individual exemption" of an otherwise violation of the Article 81, if the results there are positive economics effects overall.

Question 24

The U.S. antitrust laws apply to the conduct of U.S. firms outside the territorial boundaries of the United States.

Question 25

American policy tends to be more forgiving of a patent holder's restrictions than the European Commission.

Question 26

The European Court of Justice has issued a decision giving franchisor-franchisees great flexibility in structuring.

Question 27

The European Commission is even less flexible with respect to know-how transfer agreements than it is to patent licenses.

Question 28

Because The Sherman Act is a U.S. statutory law, it cannot be used to regulate or bring an action against a foreign company.

Question 29

In Japan, there are few remedies for private causes of action for damages due to antitrust violations in civil court system.

Question 30

The Europeans view the monopoly in a patent as a danger to competition that should be minimized as much as possible.

Question 31

The U.S. takes the position that a patent monopoly is essential to protect the patent holder and encourage innovation.

Question 32

The European Union and foreign nations have begun a spirited effort to beef up their competition laws.

Question 33

In keeping with the litigious character of the American legal system, U.S. antitrust laws:
I. Are stated in general terms.
II. The details are to be worked out through administrative regulations.

A) I only.
B) II only.
C) Both I and II.
D) Neither I nor II.

Question 34

The European Court of Justice has shown little reluctance to find competition conspiracies between a European subsidiary and its American parent.

Question 35

The Europeans tend to be reluctant to apply their competition law to activity outside the EU.

Question 36

During the 1980s, the U.S. Justice Department took the offensive and aggressively enforced American antitrust laws in order to signal to the business community that any transactions that in violation of antitrust laws would be prosecuted.

Question 37

A clawback provision allows a foreign company to sue in their own country to recover against local American assets all or part of an antitrust judgment rendered in the U.S.

Question 38

Despite the differences in antitrust laws among nations the substances of competition law is similar.

Question 39

​ Paten t license s ar e no t covere d b y th e Commissio n o f th e Europea n Unio n bloc k exemptions.

Question 40

The European Union's enforcement agency in antitrust matters, which is analogous to the U.S. Federal Trade Commission and Justice Department, is the:

A) Commission of the European Union.
B) European Enforcement Agency.
C) European Antitrust Task Force.
D) none of the above.

Question 41

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

Question 42

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.

Question 43

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.

Question 44

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) both A and B.

Question 45

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 the above.

Question 46

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

Question 47

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.

Question 48

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 the above.

Question 49

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.

Question 50

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.

Question 51

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.

Question 52

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.

Question 53

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 the above.

Question 54

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.

Question 55

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 the above

Question 56

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 the above.

Question 57

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.

Question 58

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 the above.

Question 59

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

Question 60

"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 the above.

Question 61

​ I n wha t instance s woul d bot h th e U.S . an d E U extraterritoria l jurisdictio n o f competitio n law s apply ?

Question 62

Conside r i n wha t way s th e historie s o f th e U.S. , Japan , an d Europ e ma y explai n thei r respectiv e law s regarding marke t competitio n.

Question 63

In China, a qualifying merger or acquisition is referred to as a:

A) concentration of businesses.
B) concentration of undertakings.
C) controlled undertaking.
D) none of the above.

Question 64

In what ways is the U.S. "rule of reason" analysis inappropriate and appropriate under EU competition laws?

Question 65

Antitrust law in _________ poses the possibility of criminal liability, but this is not possible in ______.

A) the United States; Europe
B) the United States; China
C) China; the United States
D) Europe; Japan

Question 66

Compare and contrast the approaches of the EU and the U.S. with regard to IPR issues (patents, know-how transfer agreements).

Question 67

Weigh the relative benefits and short-comings of the EU preapproval model and the U.S. litigation model as exemplified by the Hart-Scott-Rodino Antitrust Improvements Act.

Question 68

Draft guidelines for the application of anti-trust laws to anti-competitive practices outside of the U.S. or critique any (existing) proposed guidelines.

Question 69

Compare and contrast the EU implementation within the community test with the U.S. effects test.

Question 70

Under Chinese law, a merger or acquisition qualifies for review if:

A) a transfer of control must occur.
B) it will result in the acquisition of control over another undertaking.
C) it results in the ability to exercise decisive influence over another undertaking.
D) all of the above.

Question 71

Weigh the benefits and detriments of the EU and U.S. rules regarding jurisdiction and forum in privately enforced competition laws.

Question 72

Discuss the advantages and disadvantages -- from the perspective of competition law -- in having a wholly foreign subsidiary in Europe.

Question 73

Write an argument that clawback provisions violate international law.

Question 74

Compare and contrast the Sherman Act and Articles 81 and 85 of the EU Treaty and/or other Competition laws.

Question 75

Knowledgeable that Canada, Germany, and the UK have enacted blocking legislation, craft a treaty on this issue. How might the different interests of these countries and partnerships (or lack thereof) with them affect any treaty? Students may also wish to read Laker Airways v. Sabena, Belgian World Airlines , 731 F.2d 909 (D.C. Cir. 1984) for further background).