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ANTITRUST

ANTITRUST. Please leave the back row and the aisle seats empty. Music: Isaac Albeniz, Works for Piano (1889-1909) Performed by Alicia de Larrocha (1959) Today’s Class: Introduction to the Course Introduction to the Antitrust Laws. 1. Introduction to the Course.

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ANTITRUST

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  1. ANTITRUST • Please leave the back row and the aisle seats empty. • Music: Isaac Albeniz, Works for Piano (1889-1909) • Performed by Alicia de Larrocha (1959) • Today’s Class: • Introduction to the Course • Introduction to the Antitrust Laws

  2. 1. Introduction to the Course • Generally: Monopoly Stories v. Competition Stories • Mechanics • Themes

  3. 1. Introduction to the Course • Generally: Comp. Stories v. Monopoly Stories • Mechanics: Classroom & Preparation • Class Meetings & Attendance • Course Page • Reading • Lectures • Themes

  4. 1. Introduction to the Course • Generally: Comp. Stories v. Monopoly Stories • Mechanics: Graded Work • Project • Exam • Themes

  5. 1. Introduction to the Course • Generally: Comp. Stories v. Monopoly Stories • Mechanics: Review & Exam Prep • Review Problems • Self-Quizzes • Old Exams • Themes

  6. 1. Introduction to the Course • Generally: Comp. Stories v. Monopoly Stories • Mechanics: • Themes

  7. THEMES OF THIS COURSE • Power of Attorneys & Legal Academics to Change the Law

  8. HISTORICAL TRENDS • 1945-75: Anti-Big Business Ideology • 1975-92: “Antitrust Revolution” • 1992-2000: Line-Drawing and Some Counter-Revolution • 2001-08: Furthering the Revolution

  9. THEMES OF THIS COURSE • Power of Attorneys & Legal Academics to Change the Law • Use of Economics in Legal Argument

  10. THEMES OF THIS COURSE • Power of Attorneys & Legal Academics to Change the Law • Use of Economics in Legal Argument • Conducting Complex Civil Litigation

  11. THEMES OF THIS COURSE • Power of Attorneys & Legal Academics to Change the Law • Use of Economics in Legal Argument • Conducting Complex Civil Litigation ATTORNEYS MATTER A LOT

  12. 2. Introduction to the Antitrust Laws • Passage of the Statutes • Text of the Sherman Act • Background to Passage: US in 1890 • Passage of the Clayton Act & FTC Act • Practices/Concepts Covered by the Course • Enforcement: Goals & Brief History

  13. 15 USC §1. Trusts, etc., in restraint of trade illegal; penalty. Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations is declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony…

  14. 15 USC §1. Trusts, etc., in restraint of trade illegal; penalty. Every contract, combination … or conspiracy, in restraint of trade … is declared to be illegal.

  15. 15 USC §2. Monopolizing trade a felony; penalty. Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony….

  16. 15 USC §2. Monopolizing trade a felony; penalty. Every person who shall monopolize, or attempt to monopolize … shall be deemed guilty of a felony….

  17. 15 USC §1. Trusts, etc., in restraint of trade illegal; penalty. Every contract, combination … or conspiracy, in restraint of trade … is declared to be illegal. = Thou Shalt Not Do Bad Things in Groups

  18. 15 USC §2. Monopolizing trade a felony; penalty. Every person who shall monopolize, or attempt to monopolize … shall be deemed guilty of a felony…. = Thou Shalt Not Do Bad Things Alone

  19. 2. Introduction to the Antitrust Laws • Passage of the Statutes • Text of the Sherman Act • Background to Passage: • US in 1890: End of the Frontier • Productivity Gains & Business Cycles • Stated Purposes of Sherman Act • Passage of the Clayton Act & FTC Act • Practices/Concepts Covered by the Course • Enforcement: Goals & Brief History

  20. End of the Frontier Oklahoma Territory Created Idaho & Wyoming Admitted to Union Battle of Wounded Knee in S.Dakota; Sitting Bull killed; Cattlemen & sheepherders begin fighting b/c of lack of range space Transportation US has 125,000 miles of RR in operation First electric underground railway opens in London Around the World in 72 Days 1890: Seeds of the Modern World

  21. Aluminum saucepan Army-Navy football Corrugated cardboard box Daimler Motorworks Emily Dickinson’s Poems EverReady Batteries Electric chair Peanut butter Poll Tax and Literacy Tests Rock Creek Park, Yosemite & Sequoia Nat’l Parks Sunoco Tetanus & Diptheria Antitoxins US Weather Bureau Cy Young Introduced in 1890

  22. Died in 1890: Vincent Van GoghBorn in 1890 • Agatha Christie • Charles deGaulle • Marjory Stoneman Douglas • Dwight David Eisenhower • Rose Fitzgerald Kennedy • Groucho Marx • Ho Chi Minh

  23. 2. Introduction to the Antitrust Laws • Passage of the Statutes • Text of the Sherman Act • Background to Passage: • US in 1890: End of the Frontier • Productivity Gains & Business Cycles • Stated Purposes of Sherman Act • Passage of the Clayton Act & FTC Act • Practices/Concepts Covered by the Course • Enforcement: Goals & Brief History

  24. 2. Introduction to the Antitrust Laws • Passage of the Statutes • Text of the Sherman Act • Background to Passage: • US in 1890: End of the Frontier • Productivity Gains & Business Cycles • Stated Purposes of Sherman Act • Passage of the Clayton Act & FTC Act • Practices/Concepts Covered by the Course • Enforcement: Goals & Brief History

  25. Stated Purposes of the Sherman Act • stop theft (high prices) • break power of trusts: better off w small businesses • federalize common law of competition

  26. Stated Purposes of the Sherman Act • stop theft (high prices) • break power of trusts: better off w small businesses • federalize common law of competition • Some see as empty political move

  27. 2. Introduction to the Antitrust Laws • Passage of the Statutes • Text of the Sherman Act • Background to Passage: US in 1890 • 1914: Passage of the Clayton Act & FTC Act • Practices/Concepts Covered by the Course • Enforcement: Goals & Brief History

  28. Clayton Act: Key Language …where … the effect … may be substantially to lessen competition, or to tend to create a monopoly.

  29. Fed’l Trade Comm’n Act • Outlaws “unfair methods of competition” • Sets up FTC to enforce

  30. 2. Introduction to the Antitrust Laws • Passage of the Statutes • Practices/Concepts Covered by the Course • Enforcement: Goals & Brief History

  31. SHERMAN ACT §1(1) CONCERTED ACTION(2) RESTRAINT OF TRADE

  32. SHERMAN ACT §1(1) CONCERTED ACTION(2) RESTRAINT OF TRADE - Per Se Rule- Rule of Reason

  33. HORIZONTAL RESTRAINTS • PRICE-FIXING • MARKET DIVISION • CONCERTED REFUSALS TO DEAL (BOYCOTTS)

  34. HORIZONTAL RESTRAINTS • PRICE-FIXING • MARKET DIVISION • CONCERTED REFUSALS TO DEAL

  35. HORIZONTAL RESTRAINTS • PRICE-FIXING • MARKET DIVISION • CONCERTED REFUSALS TO DEAL

  36. HORIZONTAL RESTRAINTS • PRICE-FIXING • MARKET DIVISION • CONCERTED REFUSALS TO DEAL • NAKED BOYCOTT • JOINT VENTURES

  37. VERTICAL RESTRAINTS • PRICE-FIXING • MARKET DIVISION • SALES ENHANCEMENT

  38. VERTICAL RESTRAINTS • PRICE-FIXING • MARKET DIVISION • SALES ENHANCEMENT

  39. VERTICAL RESTRAINTS • PRICE-FIXING • MARKET DIVISION • SALES ENHANCEMENT

  40. VERTICAL RESTRAINTS • PRICE-FIXING • MARKET DIVISION • SALES ENHANCEMENT

  41. ABUSE OF DOMINANT POSITION • (ATTEMPTED) MONOPOLIZATION • TYING

  42. ABUSE OF DOMINANT POSITION • (ATTEMPTED) MONOPOLIZATION • MARKET POWER • CONDUCT • TYING

  43. ABUSE OF DOMINANT POSITION • (ATTEMPTED) MONOPOLIZATION • TYING

  44. MERGERS • HORIZONTAL • VERTICAL • CONGLOMERATE

  45. MERGERS • CLAYTON ACT §7 • HART-SCOTT-RODINO

  46. Recurring Concepts • Defining Market/Market Power • Per Se Rule v. Rule of Reason (§1 Only)

  47. 2. Introduction to the Antitrust Laws • Passage of the Statutes • Practices/Concepts Covered by the Course • Enforcement: Goals & Brief History

  48. Possible Goals • Balance Allocative & Productive Efficiency • Protect Small Businesses • Concern re Survival: “Right” to Profit • Concern re Concentrated Political Power • Distributive Justice: Prevent Overcharges to Consumers • Business Ethics: Outlaw Offensive Commercial Practices

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