...The Clayton Act and the Sherman Act worked together to improve business practices. The Clayton Act helped with various situations within businesses. This Act outlawed price discrimination, exclusive buying contacts, and tying contracts. This Act also outlawed anticompetitive mergers and interlocking directorates. In the 1912 presidential election, all three parties agreed that Congress was being too nice to corporations with the Sherman Act 1890. The Democratic nominee won the elections and he wanted to strengthen the antitrust laws so they created the Clayton Act 1914 to replace existing laws. With price discrimination, it prevents companies from participating in predatory lending which might lower competition or create a monopoly company....
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...Assignment The Sherman and Clayton Acts Click Link Below To Buy: http://hwcampus.com/shop/assignment-sherman-clayton-acts/ 1. The Sherman and Clayton Acts The Clayton Act of 1914 classifies several business practices as illegal, including price discrimination and tying contracts, if they "substantially lessen competition or tend to create a monopoly." The Clayton Act of 1914 is an example of which of the following? Antitrust laws Price regulations 2. The Clayton and Celler-Kefauver Acts Which of the following activities are prohibited by the Clayton Act when they lead to less competition? A buyer is forced to buy multiple products from a producer in order to get a desired product. Each of these answers is correct. A director from one business sits on the board of a competing firm. A firm acquires a major percentage of the stocks of a competing firm. 3. The Herfindahl index Suppose that three firms make up the entire wig manufacturing industry. One has a 40% market share, and the other two have a 30% market share each. The Herfindahl index of this industry is _________ (a.10,000 b.6,000 c.3,400 d.4,000 e.3,000). A new firm, Mane Attraction, enters the wig manufacturing industry and immediately captures a 15% share of the market. This would cause the Herfindahl index for the industry to ___________ (a.fall b.rise c.remain the same). The largest possible value of the Herfindahl index is 10,000 because: An industry with an index higher than 10...
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...Assignment The Sherman and Clayton Acts Click Link Below To Buy: http://hwcampus.com/shop/assignment-sherman-clayton-acts/ 1. The Sherman and Clayton Acts The Clayton Act of 1914 classifies several business practices as illegal, including price discrimination and tying contracts, if they "substantially lessen competition or tend to create a monopoly." The Clayton Act of 1914 is an example of which of the following? Antitrust laws Price regulations 2. The Clayton and Celler-Kefauver Acts Which of the following activities are prohibited by the Clayton Act when they lead to less competition? A buyer is forced to buy multiple products from a producer in order to get a desired product. Each of these answers is correct. A director from one business sits on the board of a competing firm. A firm acquires a major percentage of the stocks of a competing firm. 3. The Herfindahl index Suppose that three firms make up the entire wig manufacturing industry. One has a 40% market share, and the other two have a 30% market share each. The Herfindahl index of this industry is _________ (a.10,000 b.6,000 c.3,400 d.4,000 e.3,000). A new firm, Mane Attraction, enters the wig manufacturing industry and immediately captures a 15% share of the market. This would cause the Herfindahl index for the industry to ___________ (a.fall b.rise c.remain the same). The largest possible value of the Herfindahl index is 10,000 because: An industry with an index higher than 10...
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...mergers d. Conglomerate deals e. Reverse subsidiary merger 4. What are letters of intent and how are they related to the final merger agreement? 5. What is the Lehman formula and how and why is it used? 6. Explain how acquisitions are often structured in a triangular form and what are the more common variants that they take? 7. What are special purpose acquisitions vehicles? Chapter 2. History of Mergers 1. When did the first merger wave in the United States occur? What are factors that led to its occurrence? Compare U.S. industry before and after this first merger wave. 2. Contrast the first and second merger waves. In what ways were they different and how were they similar? 3. What impact did the Sherman Antitrust Act of 1890 have on the first merger wave? Explain why this was the case. 4. What role did investment bankers, such as JP Morgan, play in the first merger wave? 5. Why were there so many conglomerate deals in the third wave? 6. What were some of the unique characteristics of the third merger wave? Explain how companies used the P/E game in the third merger wave. 7. What does research say about the shareholder wealth effects of the diversifying deals of the third merger waves? 8. What role...
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...A. Sherman Act (1890) is meant to prevent activities that a business may do that the federal government regulators believe to be anticompetitive. The Act maintains that the federal government is to examine and track trusts, companies, and organizations suspected of being in violation. It was the first federal statute to limit cartels and monopolies. (Sherman Antitrust Act, 2014) Clayton Act provides clarification to the Sherman Act of 1890. It is meant to encourage competition with businesses within the United States, discourage formation of monopolies, and prohibit price discrimination, price fixing and unfair business practices. (Clayton Antitrust Act, 2014) Robinson-Patman Act (1936) prohibits a business from selling the same item to one company for a different price while selling the same item to another company for a different price. This protects smaller businesses by limiting the large company's ability to command discriminatory discounts through its purchasing power. (Robinson-Patman Act, 2014) Federal Trade Commission Act enforces the other three antitrust laws by preventing unfair competition and deceptive practices. This act discourages businesses from entering into unlawful competition. B1. Industrial regulation deals with the government regulation of a business pricing in certain markets. It helps to decrease the control of oligopolies, prevent conspiracy and increase competition among companies. This regulation helps the consumer know that oligopoly...
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...importing directly to Athens. Death applied to anyone restricting imports (http://www.ancient.eu/article/115/). The latter was definitely extreme but regulations now cover a broader range of violations with less severe consequences. The federal government enforces three major antitrust laws. These laws address unfair practices that deprive businesses the benefits of interstate and international trade. Federal antitrust laws apply to virtually all industries and to every level of business, including manufacturing, transportation, distribution, and marketing. The Sherman Antitrust Act Passed on July 2, 1890, the Sherman Antitrust Act was the first major legislation passed to address the business practices associated with oppressive monopolies. It was named for Senator John Sherman of Ohio, who was Secretary of the Treasury under President Hayes. The Sherman Antitrust Act is a federal law prohibiting any contract, trust, or conspiracy from participating in the...
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...businesses follow the law and unethical businesses do not follow the law. In response to the growth of monopolies that threatened to destroy competition in the marketplace Congress passed the Sherman Antitrust Act in 1890. According to the Encyclopedia of White-Collar & Corporate Crime, “The Sherman Act was officially enacted because companies in various industry groups were attempting to eliminate their competition in the marketplace, thus hurting the economy.” (Encyclopedia of White-Collar & Corporate Crime, 2004, p. Introduction) The Sherman Act has two provisions in place to prevent this. The first stops the restraints of trading between states or foreign nations and the second makes monopolies illegal. The penalties for violating the Sherman Act are severe and include prison time of up to 10 years and a $1 million dollar fine for Individuals and $100 million dollar fines for businesses. The Clayton Act was passed by congress in 1914 to clarify and strengthen the Sherman Act. As stated by Britannica, “…the Clayton Act defined as illegal certain business practices that are conducive to the formation of monopolies or that result from them.” (Clayton Antitrust Act, 2014, http://www.britannica.com.proxy.devry.edu/EBchecked/topic/120766/Clayton-Antitrust-Act) Although the Sherman Act has severe consequences, when implemented, it...
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...effective? If not, why? There are several laws in place such as the Sherman Antitrust Act, the Clayton Antitrust Act and the Federal Trade Commission Act. Anti-Trust laws limit what businesses can and cannot do to ensure that all competitors have an equal chance of succeeding. (Bovee and Thill p. 39). We will discuss each of these laws throughout the paper and hopefully answer the question that was originally asked. The United States laws that are in place currently are typical effective as control measures to ensure fair business practices are followed. Determining the success or failure of specific legislation or regulations can be relative to what angle you are looking from. With anti-trust laws we are insured safeness from unreasonable trade, price discrimination and unfair and anti-competitive business practices. The Sherman Anti-Trust Act In 1890, Congress enacted the Sherman Anti-Trust Act, which is a law designed to restore competition and free enterprise by breaking up monopolies. The Act of July 2, 1890 (Sherman Anti-Trust Act) states that: “This Act outlaws all contracts, combinations, and conspiracies that unreasonably restrain interstate and foreign trade. This includes agreements among competitors to fix prices, rig bids, and allocate customers, which are punishable as criminal felonies.” (The Act of July 2, 1890 pg. 1) The original intention of the Sherman Antitrust Act was to protect consumers from big businesses that were using unscrupulous means to...
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...Research Paper #1 Antoine Finley Devry University Business Practices Introduction The United States has several laws that are intended to further fair, balanced, and competitive business practices and I think they are effective but there are some professional economist who don’t always agree on what role the government should play in the economy. I intend show examples of how the laws set in place are helping the competitive business practices. The examples I plan to focus on are major government agencies and what they do, antitrust legislation, and merger and acquisition approvals, and encourage innovation and economic development. These examples will back my belief that the laws set by the United States government are effective. It is stated in Bovee and Thill (2012, p.38) based on the belief that fair competition benefits the economy and society in general, governments intervene in markets to preserve competition and ensure that no single enterprise becomes too powerful. Major Government Agencies To keep the business practices fair, balanced, and competitive the United States government has agencies to promote standards, regulate and oversee industries and enforce laws and regulations. These agencies are Consumer Product Safety Commission (CPSC) which regulates and protects public from unreasonable risk of injury from consumer products, Environmental Protection Agency (EPA) which develops standards to protect the environment, Equal Employment Opportunity Commission...
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...investigates consumer complaints and concerns regarding unfair competition, fraud, and misleading practices in the marketplace. Federal Communication Commission. The Federal Communication Commission (FCC) is an independent agency of the United States governed by five presidentially-appointed commissioners. The commissioners serve a maximum term length of five years and no more than three commissioners can be affiliated with the same political party. The FCC is responsible for regulating communications in or initiating from the US. Communication channels that the FCC has jurisdiction over include television and radio airwaves, satellite and cable transmissions, and telegraph communications. The FCC was formed by Congress with the Communications Act of 1934. Federal Energy Regulatory Commission. The Federal Energy Regulatory Commission (FERC) is an independent commission responsible for oversight in the energy industry. The FERC does not set rates, but oversee them to ensure fair consumer pricing and rates, issues licensing to some jurisdictional energy plants, and monitors compliance to environmental concerns in the electric,...
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...up. These laws also, make it fair to the other companies and stop companies from monopolizing. By setting up the law of stopping monopolies, has also ensured there is effective economy. This was done in the late 1890’s with the Sherman Antitrust Act. The act's primary goal was to limit the expansion of monopolies, the restriction of free trade (competition) and the imposition of price fixing by industry members or any combination of business practices that led to the restriction of trade (Heakel, 2010). This allows for more competition, which has helped the consumer able to get the best price for their money and also allowing the consumer to have a choice in where to buy a product. So, basically there are many sellers busily competing against one another to sell a particular kind of product or service to paying customers, no seller will be able to take unfair advantage of the buyers, but rather each seller will be obliged to offer its goods or service on attractive terms, and each will be responsive and efficient in its dealings with buyers, who otherwise will simply turn to another, better seller (Markham, 2006). Having the Sherman Act, which is one of the three major antitrust laws led to the second law, The Clayton Antitrust Act. This law was established in 1914. It aimed...
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...oversupplies of mix. To induce customers to buy the oversupply, retailers are having to offer deep discounts on the mix. Legal Reasoning: What type of arrangement is this? What law applies? What are the elements of the law? Is the Maple Corporation arrangement legal in your opinion? Why? This is an example of a Tying Arrangement – an agreement between a buyer and a seller under which the buyer of a specific product or service is obligated to purchase additional products or services from the seller. The antitrust law applies in this situation, due to the fact that the law restricts business practices that are considered to be monopolistic or which restrain interstate commerce. This law consists of two acts – the Sherman Act, and the Clayton Act. The Sherman Act declares illegal every contract, combination or conspiracy in restraint of trade or commerce between states or foreign countries. Restraint of trade is defined as “any activity which tends to limit trade, sales and transportation in interstate commerce or has a substantial impact on interstate commerce. Such restraint tends to restrict production, affect prices, or otherwise control the market to the detriment of purchasers or consumers of goods and services.” The...
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...Dentsply International and Market Power Ashley Davis DeVry University Dentsply International and Market Power The Congress passed antitrust laws in effort to protect competition in the market, as well as consumers whom are the ultimate recipients in the market (Novak, 2007). The case that will be discussed in this paper will be a company that was found guilty of violating section 2 of the Sherman Act, which focuses on people that are trying to monopolize the market for their own benefit, or someone that is trying to get complete control within an area of the economy. With the Sherman Antitrust Act in place, monopolization is very illegal and the act tries to prevent it from happening and protect competitors in the market (Novak, 2007). Dentsply International is a company that makes dental products, but their main product sold is false teeth. The company sells product in over 100 countries, so it is a very large company. The company sells its products to dealers, who then sell the false teeth and other products to dental labs. These labs then distribute the product to dentists with the supplies they need. If you don't include false teeth, the company supplies buyers with millions of dollars of products and dominated the artificial teeth market since they had close to 80 percent of the market share at the time they were being sued (Novak, 2007). Dentsply told their dealers that they had tell sell their supplies and deal primarily with them. When the Dentsply did that...
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... and what services are allowed for consumers. The importance of regulating monopolies is to keep the market alive, to allow freedom for other smaller businesses. This keeps up competition in the market, and also keeps the monopolies from doing anything unreasonable. This has led to numerous trials on major companies, one of the biggest cases would be the trial against Microsoft INC. Acts for Regulating Monopolies: In 1890 the Sherman Antitrust act was put into effect, named after the Senator of Ohio, John Sherman and was the first component for congress to prohibit trust.(General Records of the United States Government, Record number 11) The Sherman Act intended by congress to help keep up competition in markets. Unfortunately the act was written to vague there were loopholes to the act and in only five short years the Congress picked apart the act. The act was used again later down the road to successfully help the economy. In 1904 the Sherman act was used to resolve the Northern Securities Company in State of Minnesota v. Northern Securities Company and by 1911, President Taft used the act against the Standard Oil Company and the American Tobacco...
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...multinational enterprise. I will also discuss the home state regulation of multinational enterprises. The forms of regulations discussed in this paper will be the Sherman Antitrust Act, the Clayton Act and the Robinson-Patman Act. Also there effects on business in the 21st century. THE MULTINATIONAL ORGANIZATION The Parent Company To carry out operations internationally, large business have adapted their organizational structures to share risks and to take advantage of economies of scale. The simplest international operating structure is the “nonmultinational enterprise,” in which a firm organized in one country contracts with an independent foreign firm to carry out sales or purchasing abroad. Somewhat more complex is the “national multinational enterprise,” in which a parent firm established in one country establishes wholly owned branches and subsidiaries in other countries. The most complex is the “international multinational enterprise” made up of two or more parents from different countries that co-own operating businesses in two or more countries. (August, R. 2000, International Business Law) The Nonmultinational Enterprise Many domestic firms function in the international marketplace through a foreign agent. The agent, who may be a private individual or an independent firm, acts on behalf of the domestic firm or “principal” to either sell the principal’s goods or services abroad (in which case the agent is commonly...
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