"SEMINAR ON THE ANTITRUST LAWS"
SEMINAR ON THE ANTITRUST LAWS OF THE UNITED STATES OF AMERICA Robert G. Levy, JD Johns Hopkins University Baltimore, MD, USA This seminar will provide an overview of the antitrust laws of the United States with particular attention paid to Sections 1 and 2 of the Sherman Antitrust Act, Section 7 of the Clayton Act and Section 5 of the Federal Trade Commission Act, the major antitrust statues of the United States. The United States has a long history of antitrust enforcement which has the preservation of competition and the protection of consumer welfare as its principal aims. The Sherman Antitrust Act was enacted in 1890. Since that time, cartels involving price fixing and market allocation, mergers which threatened to restrain competition and monopolies which engaged in predatory and exclusionary behavior have been found to violate U.S. antitrust laws in landmark decisions of the Supreme Court of the United States. This seminar will explore many of the Supreme Court as well as lower federal court decisions involving cartels, mergers and exclusionary behavior by a monopolist. Students who have studied E.U. competition law will recognize that the U.S. antitrust laws have much in common with Articles 81 & 82. But there are differences of importance as U.S. firms such as Microsoft and General Electric have discovered after being challenged by the EC for business practices which were deemed acceptable in the United States. Similarly, there are antitrust pitfalls which a European firm must be aware of when entering the U.S. market. Certain differences will be discussed during seminar sessions. It has been a crime (punishable by fines and/or imprisonment) for competitors to fix prices since the enactment of the Sherman Act in 1890. The first seminar class will address the criminal offense of horizontal (among competitors) price fixing and market allocation. Following the discussion video recordings of meetings of members of an international cartel will be shown. This film was made by agents of the Federal Bureau of Investigation when the members of the cartel were not aware that they were being photographed or that their conversations were being recorded. After viewing and discussing the film, we will turn to vertical price fixing, a civil (not criminal) violation of the Sherman Act in cases where the conduct does not satisfy the “rule of reason” test. Readings which discuss horizontal and vertical price fixing and market allocations and certain antitrust doctrines such as the “rule of reason” will be assigned in advance of class. The recent U.S. Supreme Court decision concerning vertical price fixing in Leegin v. Kay’ Carpet will be argued by student counsel during the last day of class. After arguments are completed, student counsel have the opportunity to respond to questions posed by the instructor and the class. The seminar will also review case law concerning mergers which threaten to restrain competition as analyzed under Section 7 of the Clayton Act, “the anti-merger statute.” The recent merger of Whole Foods and Wild Oats, two U.S. organic food retail chains, will be argued by 4 seminar students, two representing the retail chains and two representing the Federal Trade Commission, which shares responsibility for enforcing Section 7 of the Clayton Act with the U.S. Department of Justice. A principal issue in the case involves the definition of the relevant product market, always an essential element in a Section 7 case. Readings concerning Section 7 of the Clayton Act as well as the facts in Whole Foods and Wild Oats will be assigned in advance of class. Students who are assigned to argue Leegin and Whole Foods are expected to meet separately with the instructor to discuss the structure of oral argument. Oral argument in Whole Food will also be held on the last day of class. The seminar will also consider the offense of monopolization under Section 2 of the Sherman Act and specific types of exclusionary conduct. Cases deciding issues of tying, exclusive dealing, boycotts, refusals to deal and predatory pricing and the price squeeze will be discussed. Grades will be based upon oral presentations and participation in class discussions.