A Teaching Note on Antitrust and Business
top of page
Asian Institute of Research, Journal Publication, Journal Academics, Education Journal, Asian Institute
Asian Institute of Research, Journal Publication, Journal Academics, Education Journal, Asian Institute

Education Quarterly Reviews

ISSN 2621-5799

asia institute of research, journal of education, education journal, education quarterly reviews, education publication, education call for papers
asia institute of research, journal of education, education journal, education quarterly reviews, education publication, education call for papers
asia institute of research, journal of education, education journal, education quarterly reviews, education publication, education call for papers
asia institute of research, journal of education, education journal, education quarterly reviews, education publication, education call for papers
crossref
doi
open access

Published: 18 March 2023

A Teaching Note on Antitrust and Business

Richard J. Hunter, Jr., John H. Shannon, Henry J. Amoroso

Seton Hall University, University of Tulsa

asia institute of research, journal of education, education journal, education quarterly reviews, education publication, education call for papers
pdf download

Download Full-Text Pdf

doi

10.31014/aior.1993.06.01.722

Pages: 476-489

Keywords: Antitrust, Per Se Violation, Rule of Reason, Horizontal Restraint, Vertical Restraint, Tying Arrangements, Conscious Parallelism, Turn-Key Operation, Consignment Sale

Abstract

This article is the second in a series on “teaching notes” on subject matter materials found in a standard business law or legal environment of business course. The topic of this teaching note is antitrust. The article discusses the various antitrust statutes as they are applied to business; the reasoning employed by various courts in analyzing antitrust allegations; and the rules utilized by courts in judging any antitrust violations. The article cites many of the most important cases decided by courts in the United States in interpreting how the various statutory and administrative materials should be applied in the context of American business practices. Once these materials have been fully explored, the basic principles and ideas can be applied to the functional area of the business curriculum such as marketing, management, finance, and sports, and the specialized area of franchising.

References

  1. Adams, W. & Brock, J.W. (2015). 1980’s gigantomania follies. Challenge, 35(2): 4-8.

  2. Ahlborn, C., Evans, D.S., & Padilla, A.J. (2004). The antitrust economics of tying: A farewell to per se illegality. Antitrust Bulletin, 49(1/2): 287-341.

  3. Andrews, J.C. et al. (2022). What exactly is marketing and public policy? Insights from JPPM researchers. Journal of Public Policy and Marketing, 41(1): 10-33.

  4. Areeda, P.E. & Hovenkamp, H. (2007). Antitrust law: An Analysis of antitrust principles and their application (3rd ed.).Wolters Kluwer Law & Business: New York.

  5. Armor All Products v. Amoco Oil Co., 194 Wisc. 2d 35 (1995). Supreme Court Wisconsin.

  6. Bao, J. (2019). The economic effect of resale price maintenance and the regulation of antitrust law. 2019 5th International Conference on Economics, Management and Humanities Science (ECOMHS 2019: 28-33.

  7. Berry, C., Burton, S., Kees, J. & Andrews, J.C. (2021). A longitudinal assessment of corrective advertising mandated in United States v. Philip Morris USA, Inc. Journal of Business Ethics, 171: 757-770.

  8. Blair, R.D., & Durrance, C.P. (2015). Private damage actions under the Robinson-Patman Act. The Antitrust Bulletin, 60(4): 384-401.

  9. Blair, R.D. & Sokol D.D. (2012). The rule of reason and the goals of antitrust: An economic approach. Antitrust Law Journal, 78(2): 471-504.

  10. Blair, R.D. & Wang, W. (2020). Rethinking major league baseball’s antitrust exemption. Journal of Legal Aspects of Sport, 30(1): 18-40.

  11. Bork, R.H. (1977). Vertical restraints: Schwinn overruled. Supreme Court Review (University of Chicago), 1977: 171-192.

  12. Boushey, H. & Knudsen, H. (2021). The importance of competition for the American economy (Blog), Ground News (July 9, 2021), https://ground.news/article/the-importance-of-competition-for-the-american-economy; https://www.whitehouse.gov/cea/written-materials/2021/07/09/the-importance-of-competition-for-the-american-economy/

  13. Briggs, T.R. (1971). What is price fixing? Antitrust Law Journal, 41(1): 74-83.

  14. Brueller, N.N., Carmeli, A. & Drori, I. (2014). How do different types of mergers and acquisitions facilitate strategic agility? California Management Review, 56(3): 39-57.

  15. Bush, D. (2006). Mission creep: Antitrust exemptions and immunities as applied to deregulated industries. Utah Law Review, 2006(3): 761-810.

  16. Carrier, M.A. (2019). The four-step rule of reason. Antitrust, 33(2): 50-55.

  17. Carrier, M.A. & Tushnet, R. (2021). An antitrust framework for false advertising. Iowa Law Review, 106(4): 1841-1884.

  18. Cal. v. Am. Stores Co., 495 U.S. 271 (1990). Supreme Court of the United States.

  19. Chicago Board of Trade v. United States, 264 U.S. 231 (1918). Supreme Court of the United States.

  20. Cellar-Kefauver Act. 64 Stat. 1125 (1950).

  21. Clark, J.M. (1954). Competition and the objectives of government policy. In

  22. Monopoly and competition and their regulation, E.H. Chamberlain (ed). International Economic Association Conference Numbers 1-50. Palgrave Macmillan: London.

  23. Clayton Act. 38 Stat. 730 (1914).

  24. Cliently (2021). What is tie-in sales and how to avoid it: Everything you need to know. Cliently.com (December 18, 2021), https://www.cliently.com/blog/tie-in-sales

  25. Counts, C.W. (1975/1976). Goldfarb v. Virginia State Bar – Applying the antitrust laws to the legal profession. Howard Law Journal Bar Association, 19: 149-158.

  26. Crane, D.A. (2020). The new crisis in antitrust (?). Antitrust Law Journal, 83(1): 253-268.

  27. Dairy Queen v. Wood, 369 U.S. 469 (1962). Supreme Court of the United States.

  28. DePasquale, C. (2015). The Robinson-Patman Act and the consumer effects of price discrimination. Antitrust Bulletin, 60(4); 402-413.

  29. Dogrul, M. & Korkut, C. (2022). Transformation of the institutional political economy of Japan: From rice field property reform to zaibatsu. EGE Academic Review, 23(1): 89-105.

  30. Dr. Miles Medical Company v. John D. Park & Sons Company, 220 U.S. 373 (1911). Supreme Court of the United States.

  31. Dressler, E.H., Warpula, CC., & Young, C. (2021). Current advice on managing resale prices in franchising. Franchise Lawyer, 24(4): 3-6.

  32. Eastman Kodak Co. v. Image Tech. Servs., 504 U.S. 451 (1992). Supreme Court of the United States.

  33. Emamalizadeh, H. (1983). Bait-and-switch advertising: A conceptual approach. Proceedings of the 1983 Academy of Marketing Science: 458-460, https://link.springer.com/chapter/10.1007/978-3-319-16937-8_109.

  34. Emerson, R.W. (2010). Franchise territories: A community standard. Wake Forest Law Review, 45: 779-851.

  35. Erickson, M.L. (1971). Siegel v. Chicken Delight: Continued erosion of defenses to tying arrangements. American Business Law Journal, 9(1); 21-38.

  36. Faulkner, H.U. (1951/2016). The decline of laissez faire, 1897-1917. Routledge: New York.

  37. Federal Baseball Club of Baltimore v. National League of Professional Baseball Clubs, 259 U.S. 200 (1922). United States Supreme Court.

  38. Federal Trade Commission (2023). Exclusive dealing or requirement contracts, https://www.ftc.gov/advice-guidance/competition-guidance/guide-antitrust-laws/dealings-supply-chain/exclusive-dealing-or-requirements-contracts(last accessed February 25, 2023).

  39. Federal Trade Commission Act. 38 Stat. 719 (1914).

  40. Federal Trade Commission v. Great Lakes Chemical Corp., 528 F. Supp. 84 (1981). U.S. District Court for the Northern District of Illinois

  41. Federal Trade Commission v. Sysco Corp., 83 F. Supp. 3d 271 (2015). U.S. District Court for the District of Columbia.

  42. Fletcher, A., Peitz, M., & Thepot, F. (2022). Introduction to special issue on common ownership and interlocking directorates. Journal of Competition Law & Economics, 18(1); 1-4.

  43. Fordham, H. (2019). Muckraker. In George Seides’ war for the public good. Palgrave: London.

  44. Fordice, N.J., Louvis, E., Narula, M., & Salem-Mackall, T. (2021). Antitrust violations. American Criminal Law Review (Annual Survey of White Collar Crime), 58(3): 563-610,

  45. Friedman, D.A. (2013). Explaining “bait and switch” regulation. William & Mary Business Law Review, 4: 575-638.

  46. Friedman, D.A. (2018). “Dishonest search disruption”: Taking deceptive-pricing tactics seriously. University of California Davis Law Review Online, 50: 121-147.

  47. Geller, M.A. (2013). Advertising and the maintenance of competition- The Federal Trade Commission. Routledge: New York.

  48. Gillis, W.E., Combs, J.G., & Yin, X. (2020). Franchise management capabilities and franchisor performance under alternative franchise ownership strategies. Journal of Business Venturing. 35(1): 1-20, https://econpapers.repec.org/RePEc:eee:jbvent:v:35:y:2020:i:1:s0883902617307760

  49. Goldfarb v. Virginia State Bar, 421 U.S. 773 (1975). Supreme Court of the United States.

  50. Graf, R. (2020). Truth in the jungle of literature, science, and politics: Upton Sinclair’s The Jungle and food control reforms during the progressive era. Journal of American History, 106(4): 901-922.

  51. Greco, A.J. (2020). A concise history of United States resale price maintenance arrangements and its current status under state and federal laws. Journal of Advanced Research in Law and Economics, 47: 26-36.

  52. Hajdini, I & Windsperger, J. (2019). Contractual restraint and performance in franchise networks. Industrial Marketing Management, 82: 96-105.

  53. Harkins, J.G. ((1979). Tying and the franchisee. Antitrust Journal, 47(4): 903-914.

  54. Hayes, A., Rhinehart, & Kvilhaug, S. (2022). Turnkey business: Definition, how to operate with examples. Investopedia (December 17, 2022), https://www.investopedia.com/terms/turnkeybusiness.asp

  55. Hovenkamp, E. & Hovenkamp, H. (2015). Chapter 14: Tying arrangements. In The Oxford handbook of international antitrust economics, Vol. 2, R.D. Blair & D.D. Sokol (eds.), https://scholarship.law.upenn.edu/faculty_scholarship/1902/

  56. Huffman, M. (2022). Civil sanctions in antitrust enforcement. In The Cambridge handbook of competition law sanctions, T. Toth (ed): 205-217. Cambridge University Press: Cambridge, UK.

  57. Hunter, R.J. (1990). Insider trading revisited. Res Gestae, 33(8): 393-395.

  58. Hunter, R.J. (2011). Judicial review of administrative rule making. Mustang Journal of Law and Legal Studies, 2: 31-39.

  59. Hunter, R.J. & Frese (1989). The genesis of an ethical imperative: The Sec in transition. [The ethical. Implications of statutory and administrative solutions to insider trading: A comprehensive legislative, administrative, judicial and policy study.] Gonzaga University Law Review, 25(1): 9-64.

  60. Hunter, R.J. & Loviscek, A. (1997). Insider trading revisited: The misappropriation theory and beyond. The Howard University Law Review, 41(1): 79-123.

  61. Hunter, R.J. & Lozada, H.E. (2013a). A primer on franchising in the United States: A vehicle for economic mobility. Global Journal of Management and Business Research: Economics and Finance, 13(4): 43-52.

  62. Hunter, R.J. & Lozada, H.E. (2013b). The legal aspects of the franchise relationship. Global Journal of Management and Business Research: Finance, 13(6): 1-14.

  63. Hunter, R.J., Shannon, J.H., O’Sullivan-Gavin, & Blodgett, M.S. (2011). Regulation: A historical perspective and discussion of the impact of the commerce clause and the fourteenth amendment and the move to deregulate the American economy. University of LaVerne Law Review, 32: 137-164.

  64. Iacobucci, E.M. (2003). Tying as quality control: A legal and economic analysis. The Journal of Legal Studies, 32(2): 435-464.

  65. Interstate Circuit v. United States, 306 U.S. 208 (1939). Supreme Court of the United States.

  66. In the matter of McWayne, Inc., and Star Pipe Products, FTC Matter/File Number 101 0080b (April 17, 2005). Federal Trade Commission.

  67. Leegin Creative Leather products v. PSKS, 551 U.S. 877 (2007). Supreme Court of the United States.

  68. Jefferson Parish-Hospital District No. 1 v. Hyde, 466 U.S. 2 (1984). Supreme Court of the United States.

  69. Jhanwar, R. & Khanddia (2020). Advertising and its misleading. International Journal of Law Management & Humanities, 3: 1126-1138.

  70. Joskow, P.L. (2007). Chapter 16. Regulation of natural monopoly. Handbook of Law and Economics, Vol. 2: 1227-1348.

  71. Kanbur, R. (2016). The end of laissez-faire, the end of history, and the structure of scientific revolutions. Challenge, 59(1); 35-46.

  72. Kantor, A.F. (1976). Upton Sinclair and the Pure Food and Drugs Act of 1906. American Journal of Public Health (AJPH), 66(12): 1202-1205.

  73. Kaplow, L. (2011). An economic approach to price fixing. Antitrust Law Journal, 77(2): 343-450.

  74. Kaplow, L. (2018). Price-fixing policy. International Journal of Industrial Organization, 61: 749-776.

  75. Klein, B. & Saft, L.F. (1985). The law and economics of franchise tying contracts. The Journal of Law and Economics, 28(2): 345-361.

  76. Kobayashi, K. (2020). Effects of Japanese financial regulations and keiretsu style groups on Japanese corporate governance. Hastings International & Comparative Law Review, 43: 339-364.

  77. Koku, P.S. (2015). Which laws do your marketers know? Some legal issues on price discrimination (Conference Paper): 395-399. Developments in Marketing Science: Proceedings of the Academy of Marketing Science, https://link.springer.com/chapter/10.1007/978-3-319-18687-0_145

  78. Korr, M. (2020). From MD’s to Muckrakers: Fighting for passage of Pure Food and Drug Act. Rhode Island Medical Journal: 64-66.

  79. Laskowska, M. (2014). Monopoly and public policy. Business Law Review, 35: 211-213.

  80. Lavey, W.G. (1982). Patents, copyrights, and trademarks as sources of market power in antitrust cases. Antitrust Bulletin, 27(2): 433-455.

  81. Leslie, C.R. (2015). The commerce requirement in tying law. Iowa Law Review, 100(5): 2135-2160.

  82. Lessambo, F.I. (2020). Economic effects of antitrust laws on mergers and acquisitions: 17-30. In Mergers in the global markets. Palgrave Macmillan: London.

  83. Loevenger, L. (1964). The rule of reason in antitrust law. Virginia Law Review, 50(1): 23-35.

  84. Mah, S.et al. (2020). Antitrust violations. American Criminal Law Review, 57(3): 413-458.

  85. Mahari, R. (2021). Time for a new antitrust era: Refocusing antitrust law to invigorate competition in the 21st century. Stanford Computational Antitrust, 1: 52-63.

  86. Malone, M. (2021). Sharing is not always caring: Reevaluating the insurance industry’s antitrust exemption and information sharing in the machine-learning era. Houston law Review, 58(4): 987-1014.

  87. Manning, B. (1984). Business judgment rule in overview. Ohio State Law Journal, 45(3): 615-628.

  88. McGuire, J. & Dow, S. (2002). The Japanese keiretsu system: An empirical analysis. Journal of Business Research, 55: 33-40.

  89. Meese A.J. (2020). Antitrust regulation and the federal-state balance: Restoring the original design. American University Law Review, 70: 75-166.

  90. Metro Intercollegiate Basketball Ass’n v. NCAA, 337 F. Supp. 2d 563 (2004). U.S. District Court for the Southern District of New York.

  91. Miller-Tydings Price Maintenance Act. 50 Stat. 693 (1937).

  92. North Am. Soccer League, LLC v. U.S. Soccer Fed’n, Inc., 883 F.3d 32 (2018). U.S. Court of Appeals for the 2nd Circuit.

  93. Northern Pacific R. Co. v. United States, 356 U.S. 1 (1958). Supreme Court of the United States.

  94. Ornstein, S.J. (1989). Exclusive dealing and antitrust. Antitrust Bulletin, 34(1): 65-98.

  95. Page, W.H. (2020). Direct evidence of a Sherman Act agreement. Antitrust Law Journal, 83(2): 347-391.

  96. Parker, E. (2022). The inevitability of major league baseball’s antitrust exemption. Arizona State University Sports and Entertainment Law Journal, 11(2): 23-62.

  97. Pettinger, T. (2019). Regulation of monopoly. Economics Help (July 28, 2019), https://www.economicshelp.org/microessays/markets/regulation-monopoly/

  98. Pollock, E.E. (1976/1977). Schwinn per se rule: The case for reconsideration. Northwestern University Law Review, 71(1): 1-16.

  99. Pure Food and Drug Act. 34 Stat. 768 (1906).

  100. Racketeer Influenced and Corrupt Organizations Act (RICO). 84 Stat. 922 (1970).

  101. Robinson-Patman Act. 49 Stat. 1526 (1936).

  102. Rogister, G.T. (1974/1975). Antitrust law- The Sherman Act and minimum legal fee schedules: Learned professions and state-action immunity. North Carolina Law Review, 53(2): 399-409.

  103. Rotherham, C. (1998). Sale or return contracts. The Cambridge Law Journal, 57(3): 429-471.

  104. Roy, A., Hanssens, D.M., & Raju, J.S. (1994). Competitive pricing by a price leader. Management Science, 46(7): 809-823.

  105. Runge, J. (2022). What is goodwill in business? Managing Your Business (May 2, 2022), https://www.legalzoom.com/articles/what-is-goodwill-in-business

  106. Rupert, D.W. (1980). The relationship of patent law to antitrust law. Antitrust Law Journal, 49(2): 755-774.

  107. Sagi, G. 92014). A comprehensive economic and legal analysis of tying arrangements. Seattle University Law Review, 38(1): 1-36.

  108. Schlotzsky’s, Ltd. v. Sterling Purchasing & Nat’l Distrib. Co., 520 F.3d 393 (2008). U.S. Court of Appeals for the Fifth Circuit.

  109. Sea-Land Serv. v. Atlantic Pac. Int’l, 61 F. Supp. 1102 (1999). U.S. District Court for the District of Hawaii.

  110. Seid, M.H. & Mazero, J. (2017). Protected and exclusive areas in franchising. Dummies (August 30, 2017), https://www.dummies.com/article/business-careers-money/careers/franchise-management/protected-exclusive-areas-franchising-243626/

  111. Sherman Act. 26 Stat. 209 (1890).

  112. Siegel v. Chicken Delight, 448 F.2d 43 (1971). U.S. Court of Appeals for the 9thCircuit.

  113. Solomon, L.M. & Joffe, R.D. (1984). Exclusive distribution and antitrust. Fordham Law Review, 53(3): 491-526.

  114. Standard Oil of Indiana v. FTC, 340 U.S. 231 (1951). Supreme Court of the United States.

  115. Standard Oil of New Jersey v. United States, 221 U.S. 1 (1910). Supreme Court of the United States.

  116. Stein, G.A. (2019). Understanding the FTC’s monetary equitable remedies under section 13(b) for antitrust violations. Antitrust, 34(1): 59-65.

  117. Strasser, K.A. (1985). An antitrust policy for tying arrangements. Emory Law Journal, 34(2): 253-294.

  118. Theater Enterprises v. Paramount Distributor Corp., 346 U.S. 537 (1954). Supreme Court of the United States.

  119. United States v. Arnold, Schwinn & Company, 388 U.S. 365 (1967). Supreme Court of the United States.

  120. United States v. Falstaff Brewing Corp., 410 U.S. 526 (1973). United States Supreme Court.

  121. United States v. Glaxo Group Ltd., 410 U.S. 52 (1973). Supreme Court of the United States.

  122. United States v. Keyspan Corp., 763 F. Supp. 2d 633 (2011). U.S. District Court for the Southern District of New York.

  123. United States v. Phillips Petroleum Co., 367 F. Supp. 1226 (1973). U.S. District Court for the Central District of California.

  124. United States v. Philip Morris, 9 F. Supp. 2d 1 (2006). U.S. District Court for the District of Columbia.

  125. United States v. Socony-Vacuum Oil Co., 310 U.S. 150 (1940). Supreme Court of the United States.

  126. United States v. Von’s Grocery Company, 384 U.S. 270 (1966). Supreme Court of the United States.

  127. Velasco, J. (2021). Fiduciary judgment rule. William & Mary Law Review, 62(4): 1397-

  128. Warner-Lambert v. Federal Trade Commission, 361 F. Supp. 948 (1973). U.S. District Court for the District of Columbia.

bottom of page