Question

Leffler, Keith and Santeseban, Cristian. (2017). The LDC Conspiracy: The Sherman Act, Beyond a Reasonable Doubt, and Issues of Extraterritorialty (2014) in John Kwoka and Lawrence White (eds), Antitrust Revolution: Economics, Competition and Policy, 7th edition, Oxford University Press, Case 14, pp. 312-330.

1. What were the firms in the cartel? Why did the Sherman Act apply to their conduct?

Answer 1

Ans. Alleged anticompetitive practices by Google, the NCAA, and Apple. Mergers involving American Airlines and US Airways, General Electric and Electrolux, and Comcast and Time-Warner Cable. Additional allegations of competitive problems, such as Tesla’s difficulties in surmounting many states’ restrictions on how it sells its vehicles, North Carolina’ dentists’ restrictions on who can provide teeth whitening services, and “pay for delay” by pharmaceutical companies when challenged by generics.

The Sherman Antitrust Act was proposed in 1890 by Senator John Sherman from Ohio and was passed as 15 U.S.C. §§ 1-7 and amended by the Clayton Antitrust Act in 1914 in the same year by the 51st U.S. Congress. Passed at the height of what is known as the "Gilded Age" in American history, the legislation is an early example of capitalist "competition law" designed to ensure that the economic playing field remained competitive. The Sherman Antitrust Act is broken down into three sections. Section 1 defines and bans specific means of anticompetitive conduct. Section 2 addresses the end results that are by their nature anticompetitive. As such, Sections 1 and 2 act to prevent the violation of the spirit of the law while still remaining within its bounds. Section 3 extends the guidelines and provisions in Section 1 to the District of Columbia and U.S. territories.