Sherman Act - Horizontal Restraint of Trade - Explained
What is a Horizontal Restraint of Trade that Violates Antitrust Law?
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What is a Horizontal Restraint of Trade?
While there are several established types of horizontal restraint, any situation that meets the following elements may be illegal.
- Agreement - Was there an agreement between or among market participants?
Restraint- Was there an identifiable restraint of trade? If so, was the restraint:
- Naked with no pro-competitive justification? If so, it is per se illegal.
- Naked with a pro-competitive justification? Then apply the quick-look rule of reason.
- Not a naked restraint? Then the rule of reason applies.
Remember, there is no requirement that a business have extensive market power for conduct to be illegal under 1.
Next Article: Sherman Act - Sharing Information Back to: ANTITRUST LAW
Why do you think a horizontal restraint requires an agreement among two or more businesses? How do you feel about the fact that market power is not required under Section 1?
ABC Corp sells a product throughout the US. ABCs largest competitor is 123 Corp, which sells a similar product. ABC and 123 enter into an agreement to work together in selling their products. If the arrangement between ABC and 123 is challenged by the FTC, what will a court look at to determine whether the situation constitutes a horizontal restraint of trade that violates antitrust law?
- Antitrust Law (Intro)
- What is Antitrust Law?
- What are the Major Antitrust Laws?
- What government agency enforces antitrust law?
- What Sanctions are available under antitrust law?
- What is the Sherman Act of 1890 (Sherman Act)?
- What is a Contract, Combination, of Conspiracy in restraint of trade?
- What is Per Se Illegality and the Rule of Reason?
- What is a Monopoly?
- Herfindahl Hirschman Index (HHI) Definition
- What businesses are exempt from the Sherman Act?
- Horizontal Restraint Sherman Act?
- Sharing Information?
- Refusal to Deal?
- Territorial Agreement?
- Price Fixing?
- Resale restraint?
- Exclusive dealing?
- Tying products?
- Territorial agreements?
- What is Monopolization under the Sherman Act?
- What is the Clayton Act of 1914 (Clayton Act)?
- What is price discrimination under the Clayton Act?
- What are special arrangements prohibited under the Clayton Act?
- When are tying contracts an illegal restraint under the Clayton Act?
- When are reciprocal dealing contracts an illegal restraint under the Clayton Act?
- How does the Clayton Act regulate mergers and acquisition?
- FTC Act Antitrust Law