Business Law Final

Incredibly wealthy people who become that way by unethical means (implying thay steal from the poor)

created a monopoly over the oil industry

seek to make businesses compete fairly and prevent monopolies

• 1. must show ACTUAL monoploy violation
• 2. not very specific
• 3. applied to labor unions
• 4. criminal sanctions

to carry on a legal contest by judicial process

• 1. encourages innovation in new products
• 2. prices tend to drop in competitive market
• 3. fair distributions of income to all parties

• 1. Encourage large number of competitors
• 2. PREVENT MONOPOLY
• 3. Provide workable competitionw (only room for a few competitors)
• 4. Prevent accumulation of economic power/wealth (ex: only two companies build commercial air crafts)

• people don't believe that govt. should be used to put a cap on how wealthy a person can become SO antitrust laws should not be crossed to become wealthy.
• IF YOUR NOT CROSSING THE LINE THERE IS NO CAP!

• 1. Prevent a Monopoly
• 2. Illegally enter into a CONTRACT IN RESTRAINT OF TRADE

• a contract agreeing not to compete
• (Microsoft vs. DELL)

• Criminal Sanctions-a fine against corporation or executives face jail time
• Equitable Sanctions-injunctions or divestiture
• Treble Damages

if you can prove damage by a company and that they were violating the Sherman Act you will get the amount of damages x 3.

required by court to refrain from certain behaviors/acts

order to an offending party to rid itself of property in order to prevent a monopoly

• Competitiors (use it most)
• Customers
• Attorney General
• (Walmart vs Vitamins)

• Guilty
• Not Guilty
• Nolo Contendere
• Plea of Guilty or a conviction (prima facie cases for treble damages)

Yes

• NOT every contract in restraint of trade is illegal.
• Prevents thats that are an "unreasonable" restraint of trade
• (fondu restaurant contract not to compete allowed because of rule of reason)

• ALWAYS illegal whether prices are fair and unreasonable or not
• Includes dividing up market territories or limiting supply (causes prices to rise)

agreeing on a price

• eliminates competition
• what is beneficial today may not be tomorrow

• 1. easier to prove a violation
• 2. sanctions not criminal (can't put in jail for what has not yet been done)
• 3. FTC may enforce
• 4. Justice department can enforce
• 5. antitrust laws do NOT apply to labor unions

Interlocking directories

one person can't be on the board of two corporations if they are or have been competitors (could result in price fixing)

Price Discrimination

• Unlawful for seller to discriminate in price where effect MSLC or TCM
• NOT EFFECTIVE SECTION of clayton act

Robinson-Patman Act

Robinson-Patman Act

unlawfuly sold at low prices to drive out competitors and then raised the prices after the mom n' pop shops went out of business.

• Cost difference (shipping)
• Manafacture ( may cost more or less for other people)
• Administrative (no overhead)
• Changing Conditions (prices are constantly changing)

Tying Contracts

• unlawful to sell of lease a product tied to another whre effect might be to SLC or TCM
• generally unlawful when one product is pattened
• (salt processing machines)

• requires purchaser to purchase full line of products in order to get major product.
• (chicken delight case)

Mergers

no comopany may acquire stock of assets of another company if is MSLC or TCM

• Horizontal Mergers
• Vertical Mergers
• Conglomerate Mergers
• Product Extesion Mergers

two companies merge

By directly merging with suppliers, a company can decrease reliance and increase profitability

firms to want to merge, to increase market share, synergy and cross selling. Firms also merge to diversify and reduce their risk exposure. However, if a conglomerate becomes too large as a result of acquisitions, the performance of the entire firm can suffer.

prohibits entities from engaging in unfair or deceptive acts or practices in interstate commerce

stop a violoation before it has happened (section 5)

• cease and desist order
• daily fine
• consent order (order to stop/injunction)
• settlement

• health hazard warning for cigarettes
• leak-proof battery

methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are hereby declared unlawful.

"regular price" or manafactures' list price may only be used if it regularly sells at that price

• is the second item really free?
• Mary Carter lost for deception, pain was originally less so the free gallon was actually $2

run ad at low price (bait), bait runs our so you offer more expensive alternative (switch).

• making the bait look worse that other products by upselling alternative items.
• (subtle form of bait and switch)

• Corrective Advertising
• Advertising Substantiation
• Comparative Advertising

• Must reverse deception and let consumers know the truth.
• Ads must be replace in all the same spots until the same amount of money is spent.

• Proof of claim
• Mock-ups can be use in advertising but not to establish proof

Ice cream ads

Campbell's alphabet soup

• became legal more recently
• (french fry wars)

way for FTC to decide if the advertisement is breaking some regulations

• 1938
• Restricted child labor and set wages for first tme

• Loss of income 60%-70% of normal pay
• Death Benefit for family
• permenant/partial disability by shcedule lump sum check
• Medical benefits

• state law so different w/in each state
• eliminated defenses for employers

• assumption of risk
• contributory negligence
• fellow servant doctrine (negligence of another employee caused injury so suit is served to them)

employer passes cost on to product increasing prices in order to cover the new cost of wokers comp.

• 1866
• after slump in 1930 membership tripled by 1936

• 1935
• Was passed because employers had too much power

• gave employees rights to organize and bargain effectively
• outlawed unfair labor practices of employers (yellow dog contracts & black list)
• Created nation labor relations board

• refuse to bargain in good fith with employees
• interfere with efforts to join union
• dominate union
• discriminate against union members
• agree with union to SECONDARY BOYCOTT

• Yellow-Dog Contracts
• Black List
• Lock-out

contratc between employer and employee that the employee will not join the labor union

prohibited members of labor union from being hired.

• still legal today
• employer locks out employees because they know they uion is going to go on strike

• 1947
• union members were gaining too much power after WWII so congress reacted with this act

• refusal to bargain in good faith
• coercing employee to join union
• causing an employer to discriminate agains non-union members
• secondary boycott
• requirement of excessive fees
• featherbedding

unions making employers pay people even if there is no job for them to do

president can issue if a union strike can affect national defense

• supervise union elections
• ajducated charges
• jurisdiction over interstate commerce
• "cease and desist" order

• 1959
• resulted from hearings of the Senate committee on improper activities in the fields of labor and management, which uncovered evidence of collusion between dishonest employers and union officials.

• participate in elections
• free expression
• vote on dues
• sue union
• fair hearing before diciplinary action
• could see a copy of collective bargaining agreement