| Term | Definition |
|---|
| Trust | a fiduciary relationship concerning property in which one person, known as the trustee, holds legal title to property for the benefit of another, known as the beneficiary. |
| Trustee | one who holds legal title to property for the benfit of another. Duties are to manage and preserve the property for the use and enjoyment of the beneficiary. |
| Beneficiary | A person entitled to the possession, use, income, or enjoyment of an interest or right to which legal title is held by another; a person to whom an insurance policy is payable. |
| Shermann Act | an 1890 congressional enactment designed to regulate anticompetitive behavior in interstate commerce. |
| Clayton Act | an amendment to the Sherman Act that expanded the national antitrust policy to cover price discrimination, exclusive dealings, tying contracts, mergers, and interlocking directors. |
| Federal Trade Commission Act | this legislation created an independent administrative agency charged with keeping competition free and fair. |
| Restraint of trade | monopolies, combinations, and contracts that hold back free competition. |
| Price fixing | the most common contract in restraint of trade is an agreement among competitors to charge the same price for their products. |
| Monopoly | exclusive control of a market by a business entity. |
| Predatory conduct | an anticompetitive action that is intended to drive competitors out of business. A common example occurs when a business lower sits prices in the hope of gaining such a large market share that it can then raise prices without the fear of competition. |
| Rule of reason | under the Sherman Act, contracts or conspiracies are illegal only if they constitute an unreasonable restraint of trade or attempt to monopolize. If an agreement promotes competition, it may be legal. If it suppresses or destroys competition, it is unreasonable and illegal. |
| Per se illegality | under the Sherman Act, agreements and practices are illegal if they are conclusively presumed to unreasonable. Only proof of the activity is required. |
| Triple damages(or treble damages) | an award of damages allowable under some statues equal to three times the amount found by the jury to be a single recovery. |
| Nolo contendere | a plea entered by the defendant in a criminal case that neither admits nor denies the crime allegedly committed but, if accepted by the court, permits the judge to treat the defendant as guilty. |
| State action exemption | the Sherman Act exemption of the sovereign action of a state that replaces competition with regulation if the state actively supervises the anticompetitive conduct. |
| Parker v. Brown doctrine | the name given to the state government's exemption from the Sherman Act. |
| Noerr-Pennington doctrine | this doctrine exempts from the antitrust law concerted efforts to lobby government officials regardless of the anticompetitive purposes. It is based on the First Amendment freedom of speech. |
| Horizontal price fixing | a per se illegal agreement among competitors as to the price all of them will charge for their similar price. |
| Vertical price fixing | attempts by manufacturers to control the ultimate retail price for their products. an agreement between a seller and a buyer(for example, between a manufacturer and a retailer) to fix the resale price at which the buyer will sell goods. |
| Resale price maintainance | manufacturer control of a brand or trade-name product's minimum resale price. |
| Colgate doctrine | the legal principle that allows a form of vertical price fixing in that manufacturers may maintain the resale price of their products by announcing their pricing policy and refusing to deal with customers who fail to comply with the policy.Horizontal territorial agreement- an arrangement between competitors with respect to geographical areas in which each will conduct its business to the exclusion of the others. This type of agreement is illegal per se under the Sherman Act. |
| Vertical territorial agreement | an arrangement between a manufacturer and a dealer or distributor. It assigns the dealer or distributor an exclusive territory, and the manufacturer agrees not to sell to other dealers or distributors in that territory in exchange for an agreement by the dealer that it will not operate outside the area assigned. Subject to the rule of reason. |
| Concerted activities | when competitors attempt to share some activities (involving an agreement, contract, or conspiracy), or join together in the performance of a function to restrain trade that may be illegal under the Sherman Antitrust Act. |
| May substantially lessen competition or tends to create a monopoly | note the lesser burden of the Clayton Act test. |
| Robinson-Patman amendment | statute that attempted to eliminate the advantage that a large buyer could secure over a small buyer solely because of the larger buyer's quantity-purchasing ability. |
| Predatory pricing | pricing bleow marginal cost by a company willing and able to sustain losses for a prolonged period to drive out competition. |
| Cost justification defense | a defense to a price discrimination case wherein the defendant seeks to justify charging different customers different prices due to that defendant's costs varying because of the differing quantities purchased by the customers. |
| Good-faith meeting-of-competition defense | a bona fide business practice that is a defense to a charge of violation of the Robinson-Patman Act. This exception allows a seller in good faith to meet the equally low price, service, or facility of a competitor BUT cannot be established if the purpose of the price discrimination has been to eliminate competition. |
| Tying contract | contract in which a product is sold or leased only on the condition that the buyer or lessee purchase a different product or service from the seller or lessor |
| Full-line forcing | an arrangement in which a manufacturer refuses to supply any portion of the product line unless the retailer agrees to accept the entire line. |
| Reciprocal dealing | a contract in which two parties face each other and agree to mutual actions so that each party can act as BOTH a buyer and seller to each other. |
| Exclusive dealing | a contract that contains a provision that one party or the other(buyer or seller) will deal only with the other party. |
| Requirements contract | a contract in which a buyer agrees to purchase all of its needs of a given contract from the seller during a certain period of time. |
| Mergers | the extinguishment of a corporate entity by the transfer of its assets and liabilities to another corporation that continues in existence. |
| Horizontal merger | combines two businesses that were competitors in the same field or industry. |
| Market extension merger | an acquisition in which the acquiring company increases its market through product extension or geographical extension. |
| Product extension | market extension in new products. |
| Geographic extension | market extension in new areas. |
| Vertical merger | a merger of corporations where one corporation is the supplier of the other. |
| Conglomerate merger | the merger resulting when merging companies have neither the relationship of competitors nor that of supplier and customer. |
| Celler-Kefauver amendment | an amendment passed in 1950 to the Clayton Act by broadening the scope of Section 7 on mergers and acquisitions. |
| Wheeler-Lea Amendment | legislation passed in 1938 that expanded the Federal Trade Commission's authority to protect society against unfair or deceptive practices. |
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