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Ch. 6, 24, 25, 27 (Ch. 27: Antitrust Law (Intro (Market Power: The power…

- - - - Regulate the business conduct in order to promote the forms of competition that benefit society
      - Rein in the underestimated exercise of market power
    - - Trust: an arrangement in which some party, referred to as a trustee, holds legal title to property for the benefit of another
      - Common law - ineffective means of protecting competition
  - - - (2 or more persons) Every contract in restraint of trade or commerce is illegal
      - Per Se Violations: in and of itself
      - Rule of Reason
        
        DEF: the court balances the reasons for the agreement against its potentially anticompetitive effects-- Factors:
        
        The purpose of the agreement
        
        parties power to implement the agreement to achieve the purpose
        
        effect or potential effect of the agreement on competition
        
        whether the parties could have relied on a less restrictive means to achieve their purpose
      - Horizontal Restraints
        
        DEF: Any agreement that in some way restrains competition between rival firms competing in the same market (retailers of a similar product in same geographical area)
        
        Price Fixing: Restricting output by eliminating price competition
        
        Group Boycotts: Agreement by two or more sellers to refuse to deal with another person or company
        
        Horizontal Market Division: Agreements to divide up the market between rival companies (territory or customers)= per se violation
      - Vertical Restraints
        
        DEF: Any agreement between firms at different levels in the manufacturing and distribution process (company's entire chain of production)
        
        TYPES that are illegal under Federal Law:
        
        Territorial or Customer Restrictions: Manufacturers instituting territorial restrictions or attempting to prohibit wholesalers or retailers from selling the products to certain classes of buyers (competing retailers)= Rule of Reason
        
        Resale Price Maintenance Agreements: An agreement between a manufacturer and a distributor or retailer in which the manufacturer specifies what the retail prices of its products must be= Rule of Reason
    - - (1 person or company) Every person who shall monopolize, attempt to monopolize, or combine or conspire with any other person or persons to monopolize any part of the trade or commerce is guilty of a felony
      - Two TYPES of behavior violate
        
        Conduct pursued by a firm that is already a monopolist is condemned as monopolization if the conduct INTERFERES with free trade -AND- INTENDED to preserve the firm's monopoly
        
        Conduct INTENDED to capture monopoly power is condemned as an attempt at mobilization
        
        Predatory Pricing
      - Monopolization
        
        DEF: The possession of monopoly power in the relevant market and the willful acquisition or maintenance of the power as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident
        
        Violation of Section 2 = Must prove monopoly power -AND- an intent to monopolize
        
        Monopoly Power: control of the relevant market
        
        To win plaintiff must show: firm had dominant share of relevant market -AND- significant barriers for new companies entering that market
        
        Relevant Market--Factors:
        
        Relevant PRODUCT Market: all products with identical attributes and are interchangeable (sugar, sweet-n-low, stevia...)
        
        Relevant GEOGRAPHIC Market: Nationwide vs. local markets
        
        The Intent Requirement - must then be proven
      - Attempts to Monopolize - Proof of 3 Elements:
        
        Anticompetitive Behavior
        
        Specific intent to exclude competition & garner monopoly power
        
        "Dangerous" probability of success in achieving monopoly power
  - - - Price Discrimination
      - Exclusionary Practices (exclusive-dealing contracts and tie-in sales agreements)
      - Corporate Mergers
      - Interlocking Directorates
  - - - DOJ and FTC enforce Fed. Antitrust Laws
      - Sherman Act violations are prosecuted by DOJ as civil or criminal
      - DOJ/FTC enforce Clayton Act as civil cases
    - - Private parties injured due to violation of Sherman/Clayton Act can sue for: treble damages, attorney's fees, and sometimes injunctive relief
    - - Labor Unions
      - Insurance Companies
      - Business persons' joint efforts to seek government action
- - - - Passed to create an administrative agency. Specifies name, purposes, functions and powers of the agency
    - - Federal Executive Agencies
        
        Formed to help the president carry out executive functions
      - Independent Regulatory Agencies
        
        Outside major executive departments
  - - - Courts should hold "unlawful and set aside" agency actions found to be "arbitrary, capricious, an abuse of discretion, or not in accordance with the law. Factors:
      - (1) Failed to provide rational explanation for decision
      - (2) Changed its prior policy without justification
      - (3) Considered legally inappropriate factors
      - (4) Entirely failed to consider a relevant factor
      - (5) Rendered a decision plainly contrary to the evidence
    - - "Rule" = "an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law and policy"
      - Notice and comment rule-making
        
        Notice of the Proposed Rule-making
        
        Comment Period
        
        Final Rule
    - - Interpretive Rules: specifically exempted from APA requirement
  - - - Inspections: examine records and documents
      - Subpoenas
        
        Subpoena ad testificandum
        
        To testify
        
        Subpoena duces tecum
        
        "Bring it with you" = produce documents
        
        Limits
        
        Purpose, relevance, specificity of the demand, burden of demand
      - Searches During Site Inspections
        
        Show up to make sure company is complying with law
    - - DEF: The process of resolving a dispute by presenting evidence and arguments before a neutral decision maker
      - Negotiated Settlements
        
        Simple conversations or informal conferences to rectify the problem to agency's satisfaction and avoid additional proceedings
      - Formal Complaints
        
        Charges/allegations against you in written form
      - The Role of the Administrative Law Judge
        
        Presides over hearing and has the power to administer oaths, take testimony, rule on questions of evidence, and make determinations of fact
      - Agency Orders
        
        Binding orders that can be appealed later
- - - - The Complaint Order
        
        The complaint against the advertiser that says they have been deceptive
      - The Cease and Desist Order
        
        DEF: a sanction making advertisers stop running the advert in dispute
        
        Counter Advertising
        
        A sanction where they are making the advertiser fix the advert
        
        Multiple Product Orders
        
        Stop ads on all of their products
        
        Restitution
        
        Pay back consumer who have been hurt by this ad
    - - Telephone Consumer Protection Act
        
        Prohibits telephone solicitation using automatic dialing or a prerecorded voice -AND- prohibits ads via fax without first obtaining the recipient's consent
      - Telemarketing and Consumer Fraud and Abuse Prevention Act
        
        Before sales pitch must inform that it is a sales call, identity of seller, what product is, total costs of good, restrictions in obtaining/using good, whether or not sale is final, and must remove consumer's name if asked
  - - - Fair Packaging and Labeling Act requires product label to identify:
        
        (1) Product
        
        (2) Net quantity
        
        (3) If the state the number of servings then they have to state serving size
        
        (4) Manufacturer
        
        (5) Packager/Distributor
      - Nutrition Labeling and Education Act of 1990 (USDA certified)
  - - - Protects consumers against misbranded and adulterated foods and drugs
      - Establishes food standards, specifies safe levels of potentially hazardous food additives, and sets classification of food and food advertising
      - FDA monitors and enforces the FFDCA:
        
        Drugs must be proven effective and safe before marketed to public
        
        Food additives suspected of causing cancer are banned
        
        FDA regulates medical devices and equipment
    - - Applies to consumer products
      - Excludes products intended for industrial purposes and consumer products already covered by other regulatory agencies
      - Established the Consumer Product Safety Commission--authority:
        
        Sets standards for consumer products
        
        Ban the manufacture/sale of any product that has "unreasonable risk" to consumers
        
        Removes "imminently hazardous" products
        
        Requires manufacturers to immediately notify CPSC of products already sold that are found to be hazardous
        
        Administer other product safety legislation
- - - - A person may be liable if they use their property in a manner that unreasonably interferes with others' rights to use or enjoy their own property
      - Private Nuisance: just affecting you and you owned property first
      - Public Nuisance: affects everyone in the community (public at large), you can still have private nuisance claims
    - - Toxic Tort: A theory of negligence or strict liability (depending on circumstance) against those who pollute the environment with toxic substances
  - - - Created the EPA
      - EPA passes regulation on:
        
        Mobile sources of air pollution such as cars
        
        Stationary sources of air pollution such as electric/utility and industrial plants
  - - - Limits discharges of pollutants into water use for recreation, navigation, or swimming
    - - Empowers the EPA to set maximum levels for pollutants into public water systems
    - - Regulates the transportation and dumping of pollutants into ocean waters
    - - Creates liability for dangers to natural resources, private property, and local economies caused by the discharge of oil into navigable water or onto adjoining shores