Table of Contents
Who created the rule of reason?
Faculty Scholarship at Penn Law Antitrust’s rule of reason was born out of a thirty-year (1897-1927) division among Supreme Court Justices about the proper way to assess multi-firm restraints on competition. By the late 1920s the basic contours of the rule for restraints among competitors was roughly established.
Is there a European rule of reason?
A rule of reason does not exist in EU competition law (see e.g. T-11/08, T-112/99, T-49/02, T-491/07, T-208/13, etc.). It does, however, exist in the EU’s substantive law, as developed in the European Court of Justice’s Cassis de Dijon-ruling.
Where did rule of reason originate?
The origin of the Rule of Reason can be traced to the notable decision of United States v. Addyston Pipe & Steel Co. (1898), which was written by William Howard Taft during his tenure on the Sixth Circuit Court of Appeals.
What is the rule of reason economics?
The Rule of reason is a legal approach by competition authorities or the courts where an attempt is made to evaluate the pro-competitive features of a restrictive business practice against its anticompetitive effects in order to decide whether or not the practice should be prohibited.
How was the rule of reason created?
Antitrust’s rule of reason was born out of a thirty-year Supreme Court debate concerning the legality of multi-firm restraints on competition. By the late 1920s the basic contours of the rule for restraints among competitors was roughly established.
Is vertical price fixing illegal?
Direct agreements to maintain resale prices are per se illegal in the United States and subject to “hard-core restriction” in Europe.
What is the Rule of Reason test?
The “Rule of Reason” approach A contract, combination or conspiracy that unreasonably restrains trade and does not fit into the per se category is usually analyzed under the so-called rule of reason test. This test focuses on the state of competition within a well-defined relevant agreement.
What is the Rule of Reason standard?
Legal Definition of rule of reason : a standard used in restraint of trade actions that requires the plaintiff to show and the factfinder to find that under all the circumstances the practice in question unreasonably restricts competition in the relevant market — compare per se rule sense 2.
What is the per se rule?
A type of antitrust analysis used to determine the legality of agreements (written or oral) between competitors. Under the per se rule, certain categories of agreements are presumed to violate antitrust laws, regardless of other factors such as business purpose or competitive benefits.
What replaced the Sherman Antitrust Act?
The Sherman Antitrust Act of 1890 was proposed by John Sherman from Ohio and was later amended by the Clayton Antitrust Act. The Sherman Antitrust Act prohibited trusts and outlawed monopolistic business practices, making them illegal in an effort to bolster competition within the marketplace.
What did the rule of reason establish quizlet?
the court developed the Rule of Reason to apply when the restraint of trade was ancillary and reasonably necessary to serve legitimate pro-competitive ends of the business arrangement. Rule of reason is a balancing test.
What is a per se violation?
“Illegal per se” means that an act is inherently illegal. “Per se” means “in itself or “by itself”. Merely committing the act would make a person liable for the violation. Illegal per se acts are common in criminal laws such as those involving intoxication.
What is per se rule and rule of reason?
The rule of reason is exactly opposite to the Per Se Rule, that is, the informant holds the onus of proving the information alleged by them or any anti-competitive agreement claimed by them. So, in Section 3 (1), Rule of Reason is applied and not Per Se Rule.
What is illegal per se law?
“Per se,” is a Latin phrase that means “by itself.” In other words, having a 0.08 BAC by itself means that you are guilty of driving while intoxicated without regard to any other evidence.
What is horizontal price-fixing?
Legal Definition of horizontal price-fixing : a generally illegal arrangement among competitors to charge the same price for an item — compare vertical price-fixing.
What is Section 1 of the Sherman Act?
Section 1 of the Sherman Act provides: “Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce … is declared to be illegal.”.
Why is antitrust legislation passed?
The goal of these laws was to protect consumers by promoting competition in the marketplace. The U.S. Congress passed several laws to help promote competition by outlawing unfair methods of competition: Passed in 1890, it makes it illegal for competitors to make agreements with each other that would limit competition.
What are antitrust laws?
Antitrust laws are statutes developed by governments to protect consumers from predatory business practices and ensure fair competition. Antitrust laws are applied to a wide range of questionable business activities, including market allocation, bid rigging, price fixing, and monopolies.
Is price fixing illegal?
Price fixing is an agreement (written, verbal, or inferred from conduct) among competitors that raises, lowers, or stabilizes prices or competitive terms. A plain agreement among competitors to fix prices is almost always illegal, whether prices are fixed at a minimum, maximum, or within some range.
Which is an example of price fixing?
Another form of price-fixing is an agreement among competitors to refuse to pay more than a set amount for a product or service. For example, if two or more large hospital groups secretly agree to pay no more than a certain price for medical supplies that all of them use, it might qualify as price-fixing.
What is the difference between horizontal and vertical price fixing?
Horizontal Price Fixing vs. Price fixing among marketplace competitors is called horizontal price fixing, whereas fixing prices along the supply chain is called vertical price fixing.
