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Exam 47: Antitrust Law

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Question 21

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Bellin's which is and American oil and gas company located in Oklahoma works to control the oil prices in the Saudi Arabian basin with Cliemente, an oil and gas conglomerate owned by the Saudi government. Many Oklahoma and world oil and gas producers complain about this type of collaboration. Is this a violation of law?

A) No, because the Saudi Arabian company would not be subject to Sherman Act violations because it is a foreign government.
B) No, because world oil and gas companies have not right to complain about an American company's actions.
C) Yes, this is a violation of the Sherman Act
D) Yes, this is a Clayton Act violation.
E) This would be a violation if Congress determined there was a violation of an American law.

F) A) and B)
G) A) and C)

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Question 22

Multiple Choice

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Which of the following is false regarding enforcement of the Sherman Act?

A) The Antitrust Division of the Department of Justice can bring criminal or civil actions against violators.
B) If a corporation commits a crime under the Sherman Act, the corporation could face a $10 million fine for each offense.
C) Officers and employees who are convicted under the Sherman Act face a maximum fine of $350,000 and/or jail time of up to three years.
D) If a party is harmed by a company's anticompetitive behavior, the party can bring a private suit under the Sherman Act.
E) Treble damages are not available under the Sherman Act.

F) B) and C)
G) A) and E)

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Question 23

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Antitrust law was created to encourage anticompetitive behavior among businesses based on the belief that such behavior would lead to greater efficiency.

Which of the following references the type of conglomerate merger that occurs when a firm attempts to extend the market for one of its current products by merging with a firm already active in the target market?

Is it a valid defense for a seller to engage in price discrimination in order to compete in good faith with another seller's low price?

What does a judge consider when conducting a rule-of-reason analysis?

Bottom's Up pants manufacturer decides to purchase the local outlet mall's only pants store to sell their pants. This is known as a ________ merger.

In the text case Spirit Airlines Inc., v. Northwest Airlines Inc., in which Spirit Airlines claimed that Northwest Airlines lowered its prices on certain flights once Spirit Airlines began to compete, what was the result on appeal?

Colorado, being home to many microbreweries, has established an alcohol distributorship that controls all distribution of beer within the state. Breweries in the surrounding states have complained to the FTC about this, complaining that Colorado has established a monopoly on the beer distribution market in that state that is harming their business. Will their complaints result in Colorado being assessed a violation of Section 2 of the Sherman Act?

[On the Town] Mateo began taking people on tours of historic sites in his town. This had not been done before because no one thought the town contained much in the way of historical significance. Mateo, however, did some research and, with a very active imagination on his part, came up with some good stories. He started to make a nice profit with the tours, particularly with tourists passing through the town on the way to the mountains. Mateo began hearing of rival tour groups that were planning to start giving tours in the area. Mateo sent a memo to his secretary asking, "How can we shut down other potential tour groups in order to keep all the business?" One rival company started operations, but Mateo still had 85 percent of the business. He planned to run the rival out of business and prevent the start-up of any other tour operations in his town. Mateo offered to do a free advertising brochure for any business that would put up a poster advertising his tour group and agree not to advertise, or mention in any way, any other tour group. Mateo was particularly successful in making that agreement with hotels and restaurants in his town due to his likeable personality. When Robyn, who ran a rival tour group, heard about Mateo's actions, she was furious and accused him of an antitrust violation because he was trying to keep all the tour business for himself. Mateo told Robyn she was crazy and that the only reason she had no business was that she focused her tours on dry historical fact and did not do research on romantic relationships in the area in order to "spice-up" her tours. He also told her that he was not a monopolist because he did not have all the business as evidenced by Robyn's own tour service. -With Robyn's claim that Mateo was attempting to keep all the tour business for himself, which of the following would she mostly likely be alleging?

[Scuba Gear] Katie is a popular manufacturer of scuba gear. Before she allows a store to carry her line of scuba gear, she requires that the store owner agree that her line is the only line of scuba gear the store will carry. She also requires that if a store carries her line of scuba gear, it must also carry her line of wet suits. Sales of other manufacturer's gear and wet suits have begun a steady decline. Katie is accused of violating antitrust laws. However, Katie replies that she is simply conducting good business practices. Lara, the president of Deep Blue Scuba, calls Katie and tells her that she is prepared to bring suit against Katie for antitrust violations. Katie tells Lara that although she is not in violation, only the government could take action against her, and the government is way too busy to get involved in a dispute over scuba gear. -Katie's requirement that before she will sell scuba gear to a business, the business must carry her line of wet suits is a ________ arrangement.

Under the Clayton Act, who would most likely challenge horizontal mergers?

Which of the following is a defense to predatory pricing allegations?

To demonstrate a seller engaged in the violation known as price discrimination, a plaintiff must show that the defendant seller was involved in ________ and the defendant seller's action substantially lessened competition or tended to create a monopoly.

The broad language of the Federal Trade Commission Act permits ________ to investigate and bring antitrust claims.

Bid rigging has recently been removed from the category of price fixing, and is therefore legal.

In the Supreme Court Case California Dental Association v. Federal Trade Commission, the Court

Which of the following is true regarding Katie's statement that only the government could take action against her?

Blimpos and Comandos are both manufacturers of gaskets for oil wells. The two decide to merger their business. This is known as what type of merger?

Assume that Blinko's offers Mom n' Pop's Print Shop the chance to set their prices at the same rate, in an effort to avoid any antitrust action Mom n' Pop's wants to file. Blinko's tells them that if they do that, they will get just as much business as Blinko's does and the other competitors will be unable to compete. What possible violation might this be?