Sherman Act and Price Fixing: Case Study

Sherman Act and Price Fixing: Case Study

Introduction

In America, the law applicable to the analysis of predatory pricing one hand is Article 2 of the Sherman Act (the part that refers to "attempts monopolize "). In practice, the competition law prohibits the conduct of anti-competitive practices, the acquiring a dominant position in the market through carrying out such practices and abuse of dominant position (FTC.gov, n.d.).

To Goliath

A parent company may be held responsible for violations committed by its subsidiaries, even if it did not know, at least when its subsidiaries do not decide independently of their conduct on the market.

The law on this point by the Court of Justice may award breaches competition rules committed by a subsidiary to the parent also when the subsidiary does not decide independently its conduct on line market, but carries out the essential instructions given to him by the parent company (Blumberg, 2005). To determine if the subsidiary acts independently on the market, it is necessary to analyze the economic, organizational and legal between the parent company and the subsidiary. Owing to this fact, Goliath will be responsible for the cartel agreement in which its subsidiary entered; just like that it shares the profit. Moreover, agreements including the determination of the purchase price and the allocation of quantities purchased can take on the sole basis of their own nature a very serious infringement qualification, without the need to characterize such behavior by a particular geographical area (Cotter, 1962).

United States v. Alcoa, 148 F.2d 416 (2d Cir. 1945) can be cited as an example. This case is widely cited by the discussion that involved about what the market relevant to measure whether or not the defendant had monopoly power and, in particular, whether the market shares were computed on the basis of production or sales and whether or not to include the so-called "secondary aluminum production" (is meaning the new aluminum manufactured using recycled aluminum). Some commentators see this case as a major change in the law regarding application of Article 2 of the Sherman Act, and consider that it introduced a doctrine which was passed to punish "the monopoly itself" although no had proved itself "acts of monopolization" (Born, 1996).

To Junior, Ltd.

On the Junior, Ltd. answer, Hoffmann-La Roche Ltd. v. Empagran SA can be cited here. After the international vitamins cartel was uncovered in 1999, foreign purchasers ...