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Wk6 2 gov1
 

Wk6 2 gov1

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    Wk6 2 gov1 Wk6 2 gov1 Presentation Transcript

      • REVIEW
      • ANTITRUST LAW
      • WRAP-UP
      • RIGHT OF PUBLICITY
        • Protects famous individual’s persona
        • Elements
          • Use of famous person’s name, likeness, or image
          • Without consent
          • To gain commercial advantage
      • UNFAIR TRADE PRACTICE LAW
        • False advertising
          • Balancing between competition and fairness
          • Prior substantiation required if claim uses experts or other reliable sources
        • Ambush marketing
          • Try to dilute status of official sponsorship
          • Hard to expel ambush marketers
      • SHERMAN ACT
        • Purpose: Promote free market capitalism
        • Section 1: No concerted action that unreasonably restraints trade in a relevant market
        • Section 2: No predatory or exclusionary conduct that is designed to acquire or maintain monopoly in a relevant market
      • SHERMAN ACT: SECTION 1 VIOLATION
        • Issues of section 1 violation
          • Whether there was a “concerted” action
          • Whether it “unreasonably” restrains trades
        • “ Concerted” action: Must not be alone
        • “ Unreasonable” restraints: Any excuse?
      • SECTION 1 VIOLATION: CONCERTED ACTION?
        • American Needles v. NFL (2010)
          • NFL: “We are a single entity making one product, professional football … Therefore, what we are doing is not subject to the Section 1 of Sherman Act”
          • American Needles: “NFL is a group of competitors … They must be subject to the law”
          • U.S. Supreme Court: “NFL is a group of individual teams that must compete each other (under the Section 1 of Sherman Act)”
      • SECTION 1 VIOLATION: UNREASONABLE RESTRAINT?
        • Per se violation & rule of reason analysis case
        • Per se rule: Slam-dunk violation
          • Very harmful to competitive economy
          • If a case is characterized as per se violation, automatically illegal (no excuse accepted)
        • Practices subject to per se rule
          • Horizontal price fixing
          • Territorial allocation
          • Boycott
      • SECTION 1 VIOLATION: UNREASONABLE RESTRAINT (PER SE VIOLATION)
        • Horizontal price fixing
          • Concerted action among competitors to fix price
          • Per se violation
          • Examples
            • Nike & Adidas set a minimum price of sneakers
            • Bally Fitness and Gold Gym set a minimum membership fee
      • SECTION 1 VIOLATION: UNREASONABLE RESTRAINT (PER SE VIOLATION)
        • Territorial allocation
          • Concerted action among competitors to allocate particular market to each member
          • Per se violation
          • Example
            • Bowflex and Nautilus divide geographical market into two and agree not to invade into each other’s
            • Agreement between Kaplan and Barbri not to enter each other’s market
      • SECTION 1 VIOLATION: UNREASONABLE RESTRAINT (PER SE VIOLATION)
        • Boycott
          • Concerted action among competitors to expel others from the market
          • Per se violation
          • Example
            • AT&T and Bell South not sharing lines with others
            • Suspension for rule violation decided by fellow LPGA players (Blalock v. LPGA)
      • SECTION 1 VIOLATION: UNREASONABLE RESTRAINT? (RULE OF REASON CASE)
        • Rule of Reason: Could be excusable
          • P must show adverse effect on competition
          • D must show pro-competitive effect
          • P must show it is achievable by less restrictive ways
          • Balancing pro-competitive v. anti-competitive
        • Practices subject to the Rule of Reason
          • Vertical price fixing
          • Restriction on intra-brand competition for inter-brand competition
      • SECTION 1 VIOLATION: UNREASONABLE RESTRAINT? (RULE OF REASON CASE)
        • Vertical price fixing
          • Concerted action between manufacturer and distributor to set minimum resale/retail price
          • Rule of Reason analysis
          • Example
            • Minimum retail price (e.g., Reebok & Dicks)
            • Minimum wholesale price (e.g., Texaco & dealers)
      • SECTION 1 VIOLATION: UNREASONABLE RESTRAINT? (RULE OF REASON CASE)
        • Limits on intra-brand competition
          • Restricting intra-brand competition for inter-brand competition
          • Rule of Reason analysis
          • Example
            • PGA event qualifying school
            • Limiting number of televised games (NCAA v. University of Oklahoma)
            • Limiting part-time coaches’ salary (Law v. NCAA)
      • RULE OF REASON ANALYSIS: NCAA V. UNIVERSITY OF OKLAHOMA
        • Fact
          • NCAA limits number of televised football games
          • High profile schools sued NCAA for Section 1 violation
        • Rule: Limiting intra-brand competition for inter-brand competition triggers the Rule of Reason analysis for determining section 1 violation
      • RULE OF REASON ANALYSIS: NCAA V. UNIVERSITY OF OKLAHOMA
        • Rationale
          • Limits on output (# of games on TV)  quality control for inter-brand competition  Rule of Reason
          • NCAA failed to justify pro-competitive effect > anti-competitive effect
          • Now we have BCS controlling the market instead of NCAA
      • RULE OF REASON ANALYSIS: LAW V. NCAA
        • Fact
          • NCAA set maximum salary of part-time coaches’ $$$
          • Class action against NCAA for section 1 violation
        • Rule & rationale
          • Restriction for inter-competition  Rule of Reason
          • NCAA failed to show pro-competitive effects outweigh anti-competitive effects
      • SHERMAN ACT: SECTION 2 VIOLATION
        • Elements
          • Whether the company has monopoly power
          • Whether the company unreasonably acquire or maintain monopoly power
        • Monopoly power
          • Relevant market: Critical (IBM w/ MS or all computer?)
          • Threshold market share: 60-70%
        • Defense: “Our monopoly is from our good product and business sense, or just a historic accident”
      • HOW LEAGUES DEAL WITH ANTITRUST LAW
        • Seeking favorable court decision: Federal Baseball Club of Baltimore v. National Baseball Clubs (1922)
          • Fact
            • Federal league could not recruit players because of American and National league
            • Sued MLB for antitrust violation
          • Rule & rationale
            • U.S Supreme Court: “To be subject to Antitrust law, it must be related to interstate commerce … But baseball is not (very unlikely now)”
            • U.S. Supreme Court loves baseball!
      • HOW LEAGUES DEAL WITH ANTITRUST LAW
        • Seek labor exemption: Limited shield
          • Subjects in labor negotiation is out of antitrust law
          • Therefore, major sport leagues also need players’ unions to get out of Antitrust scrutiny
        • Statutory exemption: Limited shield
          • Lobbying the legislature to get some limited exemption
          • Example: NFL’s media negotiations are not under the Antitrust law (media deal only, limited)
      • ANTITRUST LAW
        • Promote competition for market capitalism
        • Antitrust law: Two causes of action
          • Section 1: No concerted action that unreasonably restraints trade in a relevant market
          • Section 2: No predatory or exclusionary conduct that is designed to acquire or maintain monopoly in a relevant market
      • ANTITRUST LAW: SECTION 1 VIOLATION
        • Per se violation case
          • Horizontal price fixing
          • Territorial allocation
          • Group boycott
        • Rule of Reason case
          • Vertical price fixing
          • Restriction on intra-brand competition for inter-brand competition
      • ANTITRUST LAW: SECTION 2
        • Prohibit monopoly
          • Threshold question: Whether the company has monopoly power? (MKT share & relevant market)
          • Naturally occurred monopoly is not illegal