Antitrust Does Google have monopoly power? Microsoft? On what? Why? Why Not? Is that bad? Why? Can...
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Antitrust Does Google have monopoly power? Microsoft? On what? Why? Why Not? Is that bad? Why? Can you name monopolies in other industries? Is Monopoly
Antitrust Does Google have monopoly power? Microsoft? On what?
Why? Why Not? Is that bad? Why? Can you name monopolies in other
industries? Is Monopoly Power Necessarily Harmful to Society?
Slide 2
Why Do We Have Antitrust Laws? Standard Oil Trust Created the 7
Sisters (Made Rockefeller even richer)
Slide 3
Section 2 of the Sherman Act Section 2 condemns every person
who shall monopolize, or attempt to monopolize. There are two
distinct types of behavior that are subject to sanction under
Section 2: Monopolization Attempts to Monopolize Section 2: Every
person who shall monopolize, or attempt to monopolize, or combine
or conspire with any other person or person, to monopolize any part
of trade or commerce among the several States, or with foreign
nations, shall be deemed guilty of a felony.
Slide 4
Sherman Antitrust Act Unreasonable Restraints. U.S. Supreme
Court added unreasonable Restraint is greater than needed to
protect legitimate business interest Restraint poses an undue
hardship on the promisor or likely injury to the general public
Contracts in Restraint of Trade. Contract or combination in
restraint of trade is illegal. Monopoly or Attempt to Monopolize.
Monopolies or attempts to monopolize are illegal. Interstate
Commerce. The Sherman Act applies only to activities that have a
significant impact on interstate commerce. Interstate Commerce
(commerce clause). Section 1: 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
hereby declared to be illegal
Slide 5
Current Antitrust Example: JACOBI INDUSTRIES PLEADS GUILTY TO
BID RIGGING (July 2007) Bid Rigging. The president and owner of
Jacobi Industries Inc., a Medford, N.Y. company, pleaded guilty to
conspiring to rig bids on U.S. Department of Defense (DOD)
contracts for military tiedown equipment and cargo securing
systems. $20,000 Fine 6 Months Prison. Jacobi has agreed to pay a
criminal fine of $20,000, and to cooperate with the Department's
ongoing investigation. Jacobi could also serve up to six months in
prison. The terms of the plea agreement are subject to court
approval. Maximum 10 years of prison and $1million fine (or twice
the gain or twice the loss). Conspiracy. Jacobi participated in the
bid-rigging conspiracy from November 2001 to January 2005, during
which time he and co-conspirators discussed and agreed among
themselves not to compete by agreeing not to submit prices or bids
against each other on certain contracts. Attending meetings and
engaging in discussions regarding the sale of military tiedown
equipment and cargo securing systems; Agreeing during those
meetings and discussions not to compete on certain contracts with
the DOD by not submitting prices or bids on those contracts;
Submitting bids in accordance with the agreements reached; Selling
military tiedown equipment and cargo securing systems to the DOD
under those agreements at collusive and non- competitive prices;
and
Slide 6
Restraints of Trade Overview Price Fixing OPEC School Milk Scam
NCAA Cap of assistant coach salaries Any agreement among
competitors to fix prices is a per se violation. Horizontal Market
Division Trade Associations Joint Ventures Resale Price Maintenance
Agreements (rule of reason) Territorial Restrictions Free Rider
Problem Horizontal Vertical