Antitrust Glossary

The objective of antitrust and competition laws is to protect the process of competition for the benefit of consumers, making sure there are strong incentives for businesses to operate efficiently, keep prices down, and keep quality up.

In the US, the main antitrust rules are found in the Sherman Act 1890, the Clayton Act 1914, and the Federal Trade Commission Act 1914.

In the EU, the main rules on competition law are found in Articles 101 and 102 of the Treaty on the Functioning of the European Union and supplemented by various secondary legislation such as Regulation 1/2003.

In the UK, the main rules on competition law are found in the Competition Act 1998 and the Enterprise Act 2002.

Is a particular form of illegal collusive price-fixing in which competitors coordinate their bids on procurement contracts. For example, competitors agree to submit common bids, and in that way eliminate price competition; or competitors agree on which of them will be the lowest bidder and rotate the process on other bids in such a way that each firm wins an agreed number or value of contracts.

Confirmation that an individual or organization meets the requirements of accepted practices, legislation, or rules and regulations. If an individual or organization meets these requirements, they are said to be compliant.

This is (usually) an illegal practice in which competitors agree not to compete by dividing markets or territories, allocating specific percentages of available business or assigning customers between or among them. In the US, under some limited circumstances, limited “non-compete” agreements may be permissible under federal and state laws Under EU competition law, market-sharing between competitors is almost without exception an illegal practice.

This is an obligation, set by the manufacturer or supplier, that stipulates that a reseller must sell its goods or services at (or above) a certain minimum price. The lawfulness of this practice is dependent upon the circumstances. Under US federal law, these restrictions may be considered lawful, so long as the minimum resale price is independently set (not the result of an agreement among competitors) and does not unreasonably harm competition; however, in some states, state law bars manufacturers from dictating minimum resale prices, so it is important to understand locally applicable standards.

Under EU competition law, so-called resale price maintenance is generally prohibited although under certain limited circumstances it may be permitted on the basis that, for example, it can facilitate new market entry, prevent freeriding, and provide incentives to offer pre-sale services – this issue can only be determined on a case-by-case basis looking at all the relevant particular circumstances.

A monopoly is a situation in which one producer or seller (or a group of producers or sellers acting together) controls supply of goods or services, and where the entry of new suppliers or sellers is prevented or highly restricted.

Also known as price manipulation or a pricing strategy. It is an illegal agreement between competitors to

(1) sell goods or services at the same price;
(2) use the same formulas for calculating selling prices;
(3) offer the same discounts; and/or
(4) not lower the prices without notifying each other.

This content is an extract from the antitrust and competition laws course.

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