Question

Part III: Sherman Act - Answer the following two requests and clearly identify your answers to each one.

1. Mammoth Company, through three subsidiaries, controls 87 percent of the equipment to operate central station hazard-detecting devices; these devices are used to prevent burglary and detect fires and to provide electronic notification to police and fire departments at a central location. In an antitrust lawsuit, Mammoth Company claims that there are other means of protecting against burglary and it therefore does not have monopoly power. Explain how the Justice Department may be able to prove its claim that Mammoth Company is operating an illegal monopoly.

Answer 1

Justice Department to prove mamoth as guilty it need to follow 3 simple Test

Under Section 2 of the Sherman Act, it is illegal to monopolize or attempt to monopolize the market. If the company acquires a monopoly in the wrong way, using wrongful tactics, it is illegal under Section 2. Courts will look at three questions to see if a company has illegally monopolized a market:

(1) What is the relevant market?

the releveant market relating to the hazardas detecting activities so there is no other company operating this market

(2) Does the company control the market? and

yes the company controls the market by holding the 3 subsideries and 87% of total market share which is purely a monopoly act

(3) How did the company acquire or maintain its control?

the company acquired the market with the means of the 3 subsideries company which contributes 87% market share

By Examining The Above three cases with regard to the sherman act it proves that mammoth is trying to become a monopoly in the hazards dedecting