Question

1. What is horizontal restraints of trade?. Provide example

2. What is vertical restraints of trade?. Provide example

3. What is monopolization, attempts to monopolize, and conspiracies to monopolize? Provide example

• Why they are illegal?.

Answer 1

1. Classification of cases and principles of antitrust is not self-evident due to the specific circumstances of so many cases. One convenient way to group the cases is to look at those who have decided or conspired to have a partnership. If the parties are competitors— whether they are rival suppliers, wholesalers, distributors, or others — there could be a horizontal trade restraint.

2. Vertical constraints are limits on competition at different levels of the production and distribution system in agreements between companies or individuals. Vertical restraints should be distinguished from so-called "horizontal constraints" found in horizontal competitor agreements. Vertical constraints can take many forms, from a requirement that dealers allow returns from the product of a manufacturer to resale cost management agreements specifying the minimum or maximum price that dealers can charge for the product of the manufacturer.

3. Monopolization is illegal under U.S. antitrust law. Exclusive trading, price discrimination, failure to supply an appropriate service, brand binding and predatory pricing are the main categories of forbidden conduct. Under Section 2 of the American Sherman Antitrust Act 1890, monopolization is an offense. According to TFEU Article 102, it has a specific legal sense that is similar to the "abuse" of a dominant position in EU competition law. The Sherman Act 1890 states that any person "who monopolizes any part of trade or trade between the various states or with foreign nations shall be considered guilty of a crime." Section 2 also prohibits "monopolizing attempts" and "monopolizing conspiracies." It generally means that companies are not allowed to act in ways that have been defined as contradictory to previous cases.