Chapter 47 - Antitrust law. After reading this chapter, you will be able to answer the following questions: What is the rationale for antitrust law? What is the Sherman Act? What is explored in Section 1 of the Sherman Act? What is explored in Section 2 of the Sherman Act? What is the Clayton Act? What is the Federal Trade Commission Act? | Chapter 47 Antitrust Law Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Chapter 47: Antitrust Law 47- Exhibit 47-1: Antitrust Law Rationale Traditional Antitrust Theories To foster competition, a few powerful sellers should not dominate the economy; there should be many buyers and sellers in the market Accumulation of economic power leads to accumulation of political power, which leads to political consequences for consumers Efficiency should not be the only or most important goal of antitrust law Chicago School Theories Do not argue that concentrated economic power leads to political consequences If a company held great economic power and if the power led to efficiency, company should be left alone Purpose of antitrust law is to encourage economic efficiency Traditional antitrust theorists argue that a few, powerful sellers should not dominate the economy. They argue that accumulation of power leads to an accumulation of political power. Traditional antitrust theories believe that efficiency is an important goal of antitrust law but is not the only goal, or even the most important goal. Chicago school theorists argue that the central, and perhaps only, purpose of antitrust law is to encourage economic efficiency. They are not persuaded by the traditional antitrust argument that concentration of economic power leads to undesirable social and political consequences. If concentrated power leads to efficiency, Chicago theorists believe the company with such power should be left alone. The Sherman Antitrust Act Applies to business practices that restrain trade/commerce 47- The Sherman Antitrust Act applies to business practices that restrain trade or commerce. 47- Sherman Antitrust Act “Section 1” Violations Elements of violation: Agreement between parties Unreasonable restraint on trade Restraint affects interstate commerce Essential . | Chapter 47 Antitrust Law Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Chapter 47: Antitrust Law 47- Exhibit 47-1: Antitrust Law Rationale Traditional Antitrust Theories To foster competition, a few powerful sellers should not dominate the economy; there should be many buyers and sellers in the market Accumulation of economic power leads to accumulation of political power, which leads to political consequences for consumers Efficiency should not be the only or most important goal of antitrust law Chicago School Theories Do not argue that concentrated economic power leads to political consequences If a company held great economic power and if the power led to efficiency, company should be left alone Purpose of antitrust law is to encourage economic efficiency Traditional antitrust theorists argue that a few, powerful sellers should not dominate the economy. They argue that
