Key Terms
Antitrust law exists because of one core tension
Free enterprise works best without government interference, but without some oversight, powerful businesses will crush c
Free enterprise
Private, consensual system of production and distribution, conducted for profit in a competitive environment, relatively
Result
Non-trust companies went bankrupt, new competitors were blocked from entering the market, and consumer prices rose beyon
Definition
Offering identical or similar goods to different buyers at different prices when the costs of producing those goods are
Evidence of intent
Purchasing smaller competitors to grow market share; engaging in predatory pricing.
Intent to monopolize requires all three
1. Predatory or anticompetitive conduct 2.
Intent is evaluated in context
Economic downturns, significant legal changes, industry conditions. Surviving a hard time does not automatically mean a
Restraint on trade
Agreement between businesses intended to eliminate competition, create a monopoly, artificially raise prices, or harm th
Unreasonable restraint on trade
A restraint with a significant anticompetitive effect; violates antitrust laws.
Horizontal agreements
Between direct competitors (same level of the supply chain). Almost always per se violations — courts conclude they are
Vertical agreements
Between businesses at different levels of the distribution chain (e.g., manufacturer and wholesaler). Subject to the rul
Horizontal price fixing
Among competitors at the same level (e.g., competing retailers throughout an industry).
Vertical price fixing
Among businesses in the same chain of distribution (e.g., a manufacturer and its retailers attempting to control resale
Predatory pricing
Pricing below cost to drive out competitors, then raising prices to recover losses.
Three elements of predatory pricing
1. The alleged predator is selling products below cost 2.