Business Law Chapter 46 Homework The Court Awarded Conwood Damages 350 Million

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ALTERNATE CASE PROBLEM ANSWERS

CHAPTER 46

ANTITRUST LAW

46-1A. Antitrust laws

The independents alleged violations of the Sherman Act (and various state laws). They con-

tended that the Southwestern Bell Corp. had orchestrated an effort to extend a monopoly of the

46-2A. Robinson-Patman Act

The federal district court issued a judgment in Stelwagon’s favor, and Tarmac appealed. The

U.S. Court of Appeals for the Third Circuit held in part that Stelwagon established a prima facie

violation of price discrimination under the Robinson-Patman Act. The appellate court explained

46-3A. Restraint of trade

The court granted a summary judgment in favor of the coaches and issued a permanent injunc-

B-2 APPENDIX B: ALTERNATE CASE PROBLEM ANSWERS—CHAPTER 46

46-4A. Tying arrangement

The court found that PIC had breached its contract with MCA and had infringed MCA’s copy-

rights, and awarded MCA damages. As for PIC’s antitrust claim, the court found that the con-

tract for “Harry” was an illegal tying arrangement, a per se violation of the Sherman Act, and not

enforceable. The court concluded, however, that PIC was not entitled to damages. Both parties

46-5A. Attempted monopolization

The court granted a summary judgment in favor of Intel. First, the court pointed out that MVL

and Intel did not compete in the market for USB interconnect devices. Second, there was “no

evidence that Intel’s participation in the USB-IF and the drafting of the [USB] Specification con-

46-6A. Monopolization

The court ruled that “USTC’s pervasive practice of destroying Conwood’s racks and POS mate-

rials . . . through exclusive agreements with and misrepresentations to retailers was exclusion-

ary conduct without a sufficient justification, and that USTC maintained its monopoly power by

46-7A. Restraint of trade

The court concluded that Visa and MasterCard’s exclusionary rules were anticompetitive, in vio-

lation of the Sherman Act, because they restricted the ability of Amex and Discover to compete

in marketing their services to banks. The court ordered the rules revoked and permanently en-

46-8A. Sherman Act

The court ruled in Dentsply’s favor, and the government appealed to the U.S. Court of Appeals

for the Third Circuit, which reversed the ruling. The appellate court concluded that Dentsply’s

B-4 APPENDIX B: ALTERNATE CASE PROBLEM ANSWERS—CHAPTER 46

exclusivity policy, with respect to its restrictions on its dealers’ product lines, violated Section 2

of the Sherman Act. To show that an exclusive-dealing arrangement, such as the one between

Dentsply and its dealers, is being used to maintain a monopoly illegally, the government must

46–9A. Tying arrangement

Yes, there is a tying arrangement, but it is not illegal. To violate the law, the seller of the tying

46-10A. A QUESTION OF ETHICS

1. Assuming that the lawyers had attempted and exhausted all alternative means of con-

vincing the District of Columbia to increase their compensation, the attorneys had only three op-

tions: (1) they could do nothing and continue working for the same compensation, (2) they could

2. You may or may not agree that the lawyers’ boycott should be an expression protected

under the First Amendment. The United States Supreme Court, however, concluded that it

3. One could argue that the SCTLA’s boycott was in effect a “strike” against the District of

Columbia conducted for the purpose of increasing compensation. The fact that strikes by un-

ions are legal and group boycotts by trade associations are illegal is significant legally and politi-