The Sherman Antitrust Act Pertains To Agreements That Unreasonably Restrain Trade

Indeed, the Supreme Court found that a discussion of prices and the need to increase competitors in a matter of days, followed by a uniform price increase, is little less than evidence of a positive agreement. As a result, these contacts should be minimized or even avoided. Territorial restrictions and customers. Orderly marketing plans have often entered into agreements in which merchants agree to resell the product only within certain areas and to solicit transactions only from certain categories of customers. Therefore, these restrictions are imposed on the buyer. Such restrictions are governed by the motivational rule, which depends on economic justification, provided that the agreements are purely vertical and do not involve a horizontal conspiracy between distributors. On the other hand, if the price leader announced a significant increase in the face of the sharp decline in demand and a condition of chronic overcapacity, then if one in two companies announced an identical increase, it might be difficult to convince a court or jury that each company`s decision was made individually. Assuming a specific concentration takes place between competitors, the market shares held by the companies resulting from the merger and the concentration in the market are the touchstones of illegality. The guidelines measure the concentration of a market by the Herfindahl-Hirschman Index (HHI), calculated by squares of the percentages of market share of each company in the market. Based on the HHI that followed the transaction, markets are considered to be decentralized, moderately concentrated and highly concentrated. In the latter two categories, the HHI increases specified by the acquisition are intended to give a presumption of anti-competitive effects, but they can be rebutted by evidence that the merger should not create opportunities for competition to increase prices. Horizontal trade restrictions – that is, concerted actions between companies in real or potential competition between them – have traditionally been considered the most serious cartel and abuse offences and are the most sensitive category of offences to criminal sanctions.

The reason for this harsh treatment is obvious: antitrust laws postulate a competitive market where competing companies compete in terms of price, products and services. Any agreement contrary to this axiomatic behaviour between competing companies is therefore suspect. In addition to these federal laws, most states have antitrust laws enforced by attorneys general or civil parties. Many of these statutes are based on federal agreement law. The price difference must be between the different buyers. This means that a refusal to sell can only be considered discriminatory at a higher price, which does not result in a sale or a mere offer to sell on discriminatory terms.

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