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SUNY Buffalo Law School
Bartholomew, Christine P.




· Anti-trust is not just about economic theory but about stories

· Politics play a significant part in position

· Effects everyday life (products… how do they affect everyday life)


o 3 hrs; 3 essay questions (1 hr each); closed book

o Possibly look into antitrust glossary for understanding of terms



a. The Development of Analytical and Evidentiary Rules

i. Introduction: The Problems of Horizontal Arrangements

· Covered by §1 of the Sherman Act

o Requires CAR

§ Competitors

§ Agreement

§ Restrain in trade

· Is there a restraint in price or output?

· Only reviews if involves more than one entity

· A horizontal agreement is one btwn competitors (same level of distribution chain)

o Includes, inter alia, price fixing, market divisions or allocations, bid rigging, group boycotts, and other concerted activities that restrict output or exclude competition

· Not all agreements are illegal

· “the protection of competition is the central policy of the Sherman Act”

o In a competitive market, individual firms attempt to maximize profits within the context of consumer desires and limited available resources

o Each firm takes costs and prices as given and sets output at a level maximizing returns at the given prices

· Cartel = firms agreeing on price and output (similar effect to that of a monopoly)

o Success varies by type of industry and number of members… e.g. fewer = easier

o If cartel member have diff costs, it could be problematic/ cartel members could lose money

§ If all have same price by agreement therefore if higher cost for one member it jeopardizes their profits… this is why many cartels are inherently unstable

o Enforcement problems w/in a cartel:

§ If the cartel sets the price of the product too high, it may encourage new firms to enter the market, which will increase market output and reduce prices

§ The cartel may be subject to cheating by cartel members

· If these conditions exist the cartel will not survive unless artificial entry barriers are erected against the new entrant or unless the discounter is detected and persuaded and to comply

o E.g. entry barrier = complexity of product

§ One DOJ rule would be too excuse first whistleblower of cartel from criminal sanctions

o Will market self correct w/o govt influence

§ New entrants… excess greed?

ii. Rules of Reason and Per Se Illegality

· Only unreasonable restraints of trade were deemed illegal

· 3 prong test for weighing the reasonableness of the restraint

o Must examine effects

o Certain conduct is inherently anticompetitive

§ “price fixing arrangements that have a direct and immediate effect are illegal”

o Per Se test

§ Court must find that a contract, combination, or agreement existed

§ The act in question must restrain trade

§ If likely to have no beneficial effect and if it significantly impairs competition

· If not per se illegal ct applies rule of reason analysis to determine if actions result in unlawful purpose or anti-competitive effect

o Detailed factual inquiry which scrutinizes purpose and effect and reasonable interferences

· Distinctions btwn the per se rule of illegality and the rule of reason analysis are often finely drawn

o The judicial function is to examine the challenged conduct w/in a limited ranger of judicial discretion

§ This discretion is guided by the rules of construction and rules of ev discussed herein

o By definition and practice, the process of decision-making is flexible and multifaceted

o This is not only its strength but its weakness well…

o Must always consider if the court’s approach to antitrust analysis is faithful to the legislative policy and intent

iii. Guidelines for Collaboration Among Competitors

· The Guidelines for Collaborations Among Competitors set forth an enforcement framework for understanding the govt’s current thinking on horizontal agreements among competitors so that businesses can assess whether an antitrust enforcement action is likely

· Consistent with case law, the Guidelines treat conduct that raises price or reduces output as per se illegal

o Eg price fixing, bid rigging, and market divisions

· A more detailed factual inquiry will be undertaken for other agreements that do not always or usually tend to affect price or output

o Market factors are considered under the rule of reason approach

§ The nature of the agreement is considered in the context of a market power analysis

§ Examination will occur whether under the agreement there is an ability for the participants to compete independently of each other

§ Ease of entry into the market will also be considered

o If analysis of these factors reveals no anticompetitive harm, there will be no need to consider any offsetting precompetitive benefits

o If there IS ev of some antitrust harm, the govt will weigh whether the likely precompetitive features of the agreement will outweigh the anticompetitive harms

§ In achieving the substantial efficiencies the methods chosen to accomplish the benefits cannot be broader than necc

· The Guidelines establish safe zones for certain collaborations btwn competitors when anticompetitive effects are unlikely… safe zones include:

o Collaborations among competitors when the mkt share o

· If more than one complaint, complaints are joined or becomes a class action

§ consumers

· usually in form of putative class action

o if FTC and private party both sue…

§ if FTC goes first stat of limitations tolls w/in one yr of last appeal can be filed

· offensive estoppels allows findings of facts to be xferred to private party’s suit

§ if private party goes first, usually requests info from private party

· private party in fed ct… thus here FTC joins, then is in fed ct

o DOJ and private party sometimes join up

§ Filings of antitrust at all time low for Bush admin

· Primarily only filed for criminal sanctions

o Would join private party bringing civil suit (substantial overlap in two types)

· Statute of limitations

o Generally four years… can be tolled if

§ Fraudulent concealment

§ Self concealing

§ Continuing conspiracy

§ If there is a govt suit before private suit (+1 yr)

· Remedies

o Attorney’s fees

o Other costs

o Treble (3x) damages

§ Jury doesn’t know

· Only 1% of suits reach court

· Actual Anti-Trust Laws

o Sherman Act §1

§ Every contract in restraint of trade or commerce is illegal

· Horizontal OR

· vertical

o Sherman Act §2

§ Every person who shall monopolize or attmpt to monopolize shall be deemed guilty of a felony

· monoply

o Robinson-Patman Act

§ It shall be unlawful for any person engaged in commerce to discriminate in price btwn diff purchasers where the effect of such discrimination may be substantially to lessen comp or tend to create a monopoly


o Clayton Act

§ It shall be unlawful to lease or make a sale on the condition that the lessee or purchaser therefor shall not use or deal in the goods of a competitor where there will be anticompetitive effects.

o Pneumonic for types of antitrust law

§ Horizontal

§ Vertical

§ Monopoly

§ Robinson

§ Patman

· Hosting Violent Murders Ruin Playgrounds



· 3 Per Se violations

o Price fixing

o Bid rigging

o Mrkt allocation