Slide 1IntroductionSherman Antitrust ActSherman Antitrust ActSherman Antitrust ActSection 1 of the Sherman ActSection 1 of the Sherman ActSection 1 of the Sherman ActSection 1 of the Sherman ActSection 1 of the Sherman ActSection 1 of the Sherman ActSection 1 of the Sherman ActSection 1 of the Sherman ActSection 1 of the Sherman ActSection 1 of the Sherman ActSection 1 of the Sherman ActSection 1 of the Sherman ActSection 1 of the Sherman ActSection 2 of the Sherman ActSection 2 of the Sherman ActSection 2 of the Sherman ActSection 2 of the Sherman ActSection 2 of the Sherman ActSection 2 of the Sherman ActSection 2 of the Sherman ActSection 2 of the Sherman ActThe Clayton ActThe Clayton ActThe Clayton ActThe Clayton ActThe Clayton ActThe Clayton ActThe Clayton ActThe Clayton ActEnforcement and ExemptionsEnforcement and Exemptions© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.Business Law Today 10th Ed.Text and Summarized CasesDiverse, Ethical, Online and Global EnvironmentRoger LeRoy MillerGaylord JentzChapter 39 Antitrust Law and Promoting CompetitionJ-Elgaard/iStockphoto.com© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.INTRODUCTION•Common law actions intended to limit restraints on trade and regulate economic competition.•Embodied almost entirely in:The Sherman Antitrust Act of 1890.The Clayton Act of 1914.2© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.SHERMAN ANTITRUST ACT•Section 1 and 2 contain the main provisions of the Sherman Act.Section 1: •Requires two or more persons, as a person cannot contract, combine, or conspire alone.•Concerned with finding an agreement.3© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.SHERMAN ANTITRUST ACT•Section 1 and 2 contain the main provisions of the Sherman Act.Section 2: •Applies both to an individual person and to several people, because it refers to every person.•Deals with the structure of monopolies in the marketplace.4© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.SHERMAN ANTITRUST ACT•Jurisdictional Requirements.Only applies to restraints that have a substantial impact on interstate commerce.Also extends to U.S. nationals abroad engaged in activities that have an effect on U.S. foreign commerce.5© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.SECTION 1 OF THE SHERMAN ACT •Section 1 regulates what are called “horizontal” and “vertical” restraints. 6© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.SECTION 1 OF THE SHERMAN ACT •Per se violations versus the Rule of Reason.Per se violations are blatant and substantially anticompetitive.Rule of reason agreements do not unreasonably restrain trade.7© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.SECTION 1 OF THE SHERMAN ACT •Horizontal Restraints.•Horizontal restraints are agreements among Sellers (or Buyers) that restrain competition between rival firms competing in the same market.8© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.SECTION 1 OF THE SHERMAN ACT •Horizontal Restraints: Price Fixing.An agreement between competing firms in the market to set an established price for the goods or services they offer.Price fixing is a per se violation.9© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.SECTION 1 OF THE SHERMAN ACT •Horizontal Restraints: Group Boycotts.Agreement between two or more sellers to refuse to deal with a particular person or firm.Group boycotts are per se violations.10© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.SECTION 1 OF THE SHERMAN ACT •Horizontal Restraints: Horizontal Market Division.Occurs when competitors in the same market agree that each will have exclusive rights to operate in a particular geographic area.Horizontal market divisions are per se violations.11© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license