Sport Law Final: Antitrust
|Two fundamental principles found in our capitalistic/free enterprise economy|| - fair competition and supply and demand|
-- These principles keep prices down for consumers
|Sherman Antitrust Act of 1890|| - Triggered anytime business/trade affects interstate commerce|
- Section 1 of Act- forbids contracts, combinations, or conspiracies that may unreasonably restrain trade
- Section 2- prohibits monopolization of trade and commerce
- Criminal Prosecution and Civil remedies are available (treble damages in civil suit).
|Clayton Act||exempt labor unions and labor activities from the Sherman Act's application|
|Norris-LaGuardia Act||enacted in 1932 and allows employees to organize as a collective bargaining unit, which allows the employer to negotiate a contract that governs all covered employees as a unit|
|Non-statutory exemption||(judicial exemption) holds that antitrust laws are not applicable when unions (employers) and management (employers) take part in the collective bargaining agreement process of negotiating a working labor contract|
|National Labor Relations Act (NLRA) of 1935||- encourages the practice of collective bargaining between employers and employees and requires the employers and the employees to meet at reasonable times and confer in good faith with respect to wages, hours and other terms and conditions of employment.|
- Mandatory Subjects of CBA: wages, hours and working conditions
|NLRB||federal agency created by NLRA to regulate employer and employee relations in the union context.|
|Per se analysis||rule that holds that certain types of trade agreements or arrangements are inherently anticompetitive and therefore illegal|
|Rule of reason||rule that holds that only unreasonable restraints of trade violate Section 1 of the Sherman Act|
|Rule of reason|| Step 1: Plaintiffs must show anticompetitive effect.|
Step 2: Defendants must establish pro-competitive justifications.
Step 3: Reasonable alternatives.
|Intermediate rule of reason analysis (quick look analysis)||- Used to show anticompetitive effect on the price, volume, or output market.|
Quick look triggered by naked horizontal restraints.
Plaintiffs do not need to show market power.
Case proceeds straight to Step 2 in Rule of Reason analysis.
Courts prefer quick look approach because it approximates real world consumer conditions and provides courts with flexibility to consider the defendant's justifications.
|Anticompetitive effect is established through proof of:|| - A relevant market (product/service and geographic). |
- The anticompetitive effect.
|Anticompetitive effect||Caps on financial aid restrain the market by preventing students from pitting schools against each other in a competitive bidding process for student-athlete services.|
|Less restrictive alternative test.||Even if a court accepts the NCAA's justifications and finds a net pro-competitive impact, regulations could still violate antitrust law if less restrictive alternatives are available.|
|Lack of Uniformity|| The Supreme Court and all the federal circuits have adopted the test.|
Circuits vary as to (a) burden of persuasion, and (b) requisite level of restrictiveness.
|Mackey Rule||exempts agreements in which "the restraint on trade affects only the parties to the collective bargaining agreement, concerns a mandatory subject of bargaining, and is the product of bona fide arm's-length bargaining."|