<ul><li>REVIEW </li></ul><ul><li>ANTITRUST LAW  </li></ul><ul><li>WRAP-UP </li></ul>
<ul><li>RIGHT OF PUBLICITY </li></ul><ul><ul><li>Protects famous individual’s persona </li></ul></ul><ul><ul><li>Elements ...
<ul><li>UNFAIR TRADE PRACTICE LAW </li></ul><ul><ul><li>False advertising </li></ul></ul><ul><ul><ul><li>Balancing between...
<ul><li>SHERMAN ACT </li></ul><ul><ul><li>Purpose: Promote free market capitalism </li></ul></ul><ul><ul><li>Section 1: No...
<ul><li>SHERMAN ACT: SECTION 1 VIOLATION </li></ul><ul><ul><li>Issues of section 1 violation </li></ul></ul><ul><ul><ul><l...
<ul><li>SECTION 1 VIOLATION: CONCERTED ACTION?  </li></ul><ul><ul><li>American Needles v. NFL (2010) </li></ul></ul><ul><u...
<ul><li>SECTION 1 VIOLATION: UNREASONABLE RESTRAINT? </li></ul><ul><ul><li>Per se violation & rule of reason analysis case...
<ul><li>SECTION 1 VIOLATION: UNREASONABLE RESTRAINT (PER SE VIOLATION) </li></ul><ul><ul><li>Horizontal price fixing </li>...
<ul><li>SECTION 1 VIOLATION: UNREASONABLE RESTRAINT (PER SE VIOLATION) </li></ul><ul><ul><li>Territorial allocation </li><...
<ul><li>SECTION 1 VIOLATION: UNREASONABLE RESTRAINT (PER SE VIOLATION) </li></ul><ul><ul><li>Boycott </li></ul></ul><ul><u...
<ul><li>SECTION 1 VIOLATION: UNREASONABLE RESTRAINT? (RULE OF REASON CASE) </li></ul><ul><ul><li>Rule of Reason: Could be ...
<ul><li>SECTION 1 VIOLATION: UNREASONABLE RESTRAINT? (RULE OF REASON CASE) </li></ul><ul><ul><li>Vertical price fixing  </...
<ul><li>SECTION 1 VIOLATION: UNREASONABLE RESTRAINT? (RULE OF REASON CASE) </li></ul><ul><ul><li>Limits on intra-brand com...
<ul><li>RULE OF REASON ANALYSIS: NCAA V. UNIVERSITY OF OKLAHOMA </li></ul><ul><ul><li>Fact </li></ul></ul><ul><ul><ul><li>...
<ul><li>RULE OF REASON ANALYSIS: NCAA V. UNIVERSITY OF OKLAHOMA </li></ul><ul><ul><li>Rationale </li></ul></ul><ul><ul><ul...
<ul><li>RULE OF REASON ANALYSIS: LAW V. NCAA </li></ul><ul><ul><li>Fact </li></ul></ul><ul><ul><ul><li>NCAA set maximum sa...
<ul><li>SHERMAN ACT: SECTION 2 VIOLATION </li></ul><ul><ul><li>Elements </li></ul></ul><ul><ul><ul><li>Whether the company...
<ul><li>HOW LEAGUES DEAL WITH ANTITRUST LAW </li></ul><ul><ul><li>Seeking favorable court decision: Federal Baseball Club ...
<ul><li>HOW LEAGUES DEAL WITH ANTITRUST LAW </li></ul><ul><ul><li>Seek labor exemption: Limited shield </li></ul></ul><ul>...
<ul><li>ANTITRUST LAW </li></ul><ul><ul><li>Promote competition for market capitalism  </li></ul></ul><ul><ul><li>Antitrus...
<ul><li>ANTITRUST LAW: SECTION 1 VIOLATION </li></ul><ul><ul><li>Per se violation case </li></ul></ul><ul><ul><ul><li>Hori...
<ul><li>ANTITRUST LAW: SECTION 2 </li></ul><ul><ul><li>Prohibit monopoly </li></ul></ul><ul><ul><ul><li>Threshold question...
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Wk6 2 gov1

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

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