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SPM 4723 Exam 3 Questions And Answers
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SPM 4723 Exam 3 Questions AndAnswers
What is antitrust law? - correct answer ✅A field of law used to create
efficiency in economic markets
How does antitrust work - correct answer ✅When there is fair
competition in business, prices go down and quality goes up because in
order to stay profitable businesses have to have the best products at
the lowest price
Businesses are also forced to compete with each other to hire the best
labor, which drives up wages and benefits because workers will join the
company that offers the most
Businesses—including sports entities—compete with each other for -
correct answer ✅i) Customers and market share
ii) Cheaper/better access to supplies
iii)the cheapest/best employees
Section 1 of the Sherman Act of 1890 - correct answer ✅Forbids
contracts, combinations, or conspiracies that unreasonably restrain
competition i.e. price fixing
Section 2 of the Sherman Act of 1890 - correct answer ✅Prohibits
monopolization of trade and commerce
,SPM 4723 Exam 3 Questions And
Answers
What is a monopoly? - correct answer ✅Exclusive control of a supply
or market
who enforces anti-trust laws? - correct answer ✅the government, by
the Federal Trade Commission and/or the Antitrust Division of the DOJ
Penalties for Antitrust Violations - correct answer ✅1 million fine or 10
years in prison max
U.S. v. AT&T (2016-17) - correct answer ✅The Department of Justice
filed suit against AT&T, DIRECTV, and some of their television executives
for allegedly exchanging sensitive information with competitor cable
companies about prices for the LA Dodgers tv network so that none of
the companies would break first, ensuring a drop in price
The parties settled out of court
Clayton Act of 1912 - correct answer ✅proven civil damages from
antitrust violations are automatically tripled to discourage antitrust
violations and encourage antitrust lawsuits
Why is most sport antitrust a section 1 violation? - correct answer
✅Individual teams are generally considered to be separate entities
, SPM 4723 Exam 3 Questions And
Answers
Examples of Antitrust in Sport - correct answer ✅1. Allegations of a
league conspiring with stadium owners, television broadcasters, or
governing bodies to "freeze out" other leagues
2. Allegations that leagues banning certain types or brands of
equipment unreasonably kicks certain manufacturers out of the market
3. Restrictions by leagues on player movement, player salaries, etc.
Section 1 Judicial Analysis - correct answer ✅1. An agreement between
2 or more parties
2. The activity affects interstate commerce
3. The activity unreasonably restrains trade
How do courts determine if a business activity unreasonably restrains
trade? - correct answer ✅Per se Test and Rule of Reason Test
Per se Test - correct answer ✅Restraints of trade that are inherently
unreasonable are immediately invalidated
For example, price fixing agreements are inherently unreasonable
This has become a very low bar for businesses to clear
Rule of Reason Test - correct answer ✅If the restraint is not inherently
unreasonable, the court must balance the activities harms vs benefits
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