AntitrustCompetition and Cooperation

RE11RC01

CEU Outline

Competitive Acts Creates Innovation

Cooperative Acts Creates Monopoly

vs.

The Laws

• Sherman Act - 1890– “Every contract, combination in the form of

trust or conspiracy in restraint of trade …. is hereby declared illegal”

• Clayton Act - 1914 – Outlaws business mergers that result in a non-

competitive atmosphere. Activities that may affect future restraint of trade are regulated under this act.

The Laws

• Robinson - Patman Act 1936– Deals with price discrimination among

customers of the same class.• Federal Trade Commission Act of 1914

– Deals with unfair and deceptive business practices or unfair competition. May be used before someone is harmed.

The Laws

• Scott-Hart-Rodino Act– Prior notification of large mergers must be

given to the FTC and Justice Department• Parens Patriae

– Attorney General given the full strength of federal antitrust powers.

• M.G.L. 93 Section 1-14A– Massachusetts Antitrust Act

Per Se Rule:

Actions that are so inherently anti-competitive that anti-competitive effect on trade are presumedwithout need for the plaintiff to introduce evidenceon restraint or impact of trade

Per Se Violations

• Agreement to boycott competition

• Agreement to fix prices:

• Allocation of markets

• Tying

Rule of Reason:

Plaintiff may introduce evidence that restraint or impact was an unreasonable condition (restraint of trade).

Rule of Reason Violation

• Customer/client– Establishing commission rate– Other listing policies– Length of listing– Type of listing

Rule of Reason Violation

• Competitors– Commission splits– Boycotts– Horizontal mergers and agreements

• Other service providers– Tying arrangements– Vertical mergers and agreements

The Penalties

• State & Federal Fines– ranging from $25,000 - $100,000

• Prison Terms– ranging from 1-3 years

• Supervision of your business.

The Penalties

• Civil – treble damages– payment of plaintiffs’ attorneys fees.

• Loss of license.

Jody O’BrienThe RE/Education Company

Committed to Professionalism in Real Estate through Education

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