What is antitrust law? correct answers A field of law used to create efficiency in economic markets
How does antitrust work correct answers 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...
SPM 4723 Exam 3 || with 100% Errorless Answers.
What is antitrust law? correct answers A field of law used to create efficiency in economic
markets
How does antitrust work correct answers 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 answers 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 answers Forbids contracts, combinations, or
conspiracies that unreasonably restrain competition i.e. price fixing
Section 2 of the Sherman Act of 1890 correct answers Prohibits monopolization of trade and
commerce
What is a monopoly? correct answers Exclusive control of a supply or market
who enforces anti-trust laws? correct answers the government, by the Federal Trade Commission
and/or the Antitrust Division of the DOJ
Penalties for Antitrust Violations correct answers 1 million fine or 10 years in prison max
U.S. v. AT&T (2016-17) correct answers 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 answers 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 answers Individual teams are generally
considered to be separate entities
Examples of Antitrust in Sport correct answers 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 answers 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 answers Per
se Test and Rule of Reason Test
Per se Test correct answers 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 answers If the restraint is not inherently unreasonable, the court
must balance the activities harms vs benefits
Shifting burdens of proof within Rule of Reason correct answers Step 1: The plaintiff must show
that the defendants' activity has a substantially adverse effect on competition
Step 2: The defendant must give evidence that the alleged wrongful activity has precompetitive
virtues
Step 3: The plaintiff must prove that the challenged conduct is not reasonably necessary to
achieve those virtues
Los Angeles Coliseum v. NFL (9th Cir. 1984) correct answers In 1980, the Oakland Raiders
applied to the NFL to move to downtown LA
i) The Los Angeles Rams played in Anaheim (about 28 miles away)
Under the NFL rules, relocation requires 3/4 approval from NFL owners
i) The move was initially blocked
Is this an antitrust violation? NO
Why or why not? Stadiums compete for the right to host a team. Courts demonstrated that there
is competition. No pro-competitive outcome in restriction
Mackey v. NFL (8th Cir. 1976) correct answers n 1963, the NFL member clubs adopted the
"Rozelle Rule"
i) Under this rule, teams who signed free agents must give the player's old team compensation (a
player)
Is this an antitrust violation? Yes
Why or why not? Rozelle rule restricts trade significantly
Certain activity has been ruled by statute and by the courts to be exempt from antitrust scrutiny
correct answers 1. Actions in pro baseball
2. "Single entity" Organizations
3. Amateurism
4. Union Activity
5. Collectively bargained employment terms
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