Question

A May 2005 federal indictment included the following charges against certain Indianapolis ready-mix cement dealers:

For forming and carrying out the charged combination and conspiracy, Defendant and co-conspirators did those

things that they combined and conspired to do, including, among other things:

a. engaging in discussions regarding the prices at which each

would sell ready mixed concrete;

b. agreeing during those discussions to specific price increases

for ready mixed concrete and to the timing of those price increases;

c. issuing price announcements and/or price quotations in

accordance with the agreements reached;

d. selling ready mixed concrete pursuant to those agreements

at collusive and noncompetitive prices; and

e. accepting payment for ready mixed concrete sold at the

agreed-upon collusive and noncompetitive prices.

Assume for the sake of this question that these allegations are true. Discuss, with reference to the antitrust decisions covered in the course, factors determining whether or not these cement dealers have violated Section 1 of the Sherman Act.

Answer 1

Answer: Yes from the above allegations it is clear that the ready-mix cement dealers have violated section 1 of the sherman act.

Sherman antitrust act was passed in 1890 for prohibition of illegal trading, monopolies and manipulation of market etc. sherman act is devided in three section and 1st section of this act states that:

"Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal"

Following are the factors which determine that cement dealers have violated section 1 of the Sherman Act:

• Price Fixing is illegal but the dealers were engaged in discussions regarding the prices at which each would sell ready mixed concrete and they also violated the act by agreeing during those discussions to specific price increases for ready mixed concrete and to the timing of those price increases
• Making dealing agreements is against the rules of Sherman act but the dealers were issuing price announcements and/or price quotations in accordance with the agreements reached.
• The dealers were reducing market competition by forming collusive and making agreements for noncompetitive prices.
• The dealers were doing conspiracies and manipulating the markets by price fixing and forming collusive which is against Sherman Act.

So it is clear from the above mentioned factors that cement dealers violated the Section 1 of Sherman Act.