Two businesses practices outlawed by the Clayton Act are trying contracts and interlocking directorates?

Two businesses practices outlawed by the Clayton Act are trying contracts and interlocking directorates. Explain the condition required for these two practices to be a violation of this antitrust law.

Answer:
The Clayton Antitrust Act of 1914, (October 15, 1914, ch. 323, 38 Stat. 730, codified at 15 U.S.C. § 12-27, 29 U.S.C. § 52-53), was enacted in the United States to remedy deficiencies in antitrust law created under the Sherman Antitrust Act of 1890, the first Federal law outlawing practices harmful to consumers (monopolies and anti-competitive agreements). Passed during the Wilson administration, the legislation was first introduced by Alabama Democrat Henry De Lamar Clayton in the U.S. House of Representatives, where the act passed by a vote of 277 to 54 on June 5th, 1914. Though the Senate passed its own version on September 2nd, 1914 by a vote of 46-16, the final version of the law (written after deliberation between Senate and the House), did not pass the Senate until October 5th and the House until October 8th of the same year. The Clayton Act prohibits:

price discrimination between different purchasers if such discrimination substantially lessens competition or tends to create a monopoly in any line of commerce (Act Section 2, codified at 15 U.S.C. § 13);
sales on the condition that (A) the buyer or leaser not deal with the competitors of the seller or lesser "exclusive dealings", or that the buyer also purchase another different product ("tying", also covered by the Sherman Act, Section 1), but only when these acts substantially lessen competition (Act Section 3, codified at 15 U.S.C. § 14);
mergers and acquisitions where the effect may substantially lessen competition (Act Section 7, codified at 15 U.S.C. § 18);
§ 18. Acquisition by one corporation of stock of another

No person engaged in commerce or in any activity affecting commerce shall acquire, directly or indirectly, the whole or any part of the stock or other share capital and no person subject to the jurisdiction of the Federal Trade Commission shall acquire the whole or any part of the assets of another person engaged also in commerce or in any activity affecting commerce, where in any line of commerce or in any activity affecting commerce in any section of the country, the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly. No person shall acquire, directly or indirectly, the whole or any part of the stock or other share capital and no person subject to the jurisdiction of the Federal Trade Commission shall acquire the whole or any part of the assets of one or more persons engaged in commerce or in any activity affecting commerce, where in any line of commerce or in any activity affecting commerce in any section of the country, the effect of such acquisition, of such stocks or assets, or of the use of such stock by the voting or granting of proxies or otherwise, may be substantially to lessen competition, or to tend to create a monopoly.

This section shall not apply to persons purchasing such stock solely for investment and not using the same by voting or otherwise to bring about, or in attempting to bring about, the substantial lessening of competition. Nor shall anything contained in this section prevent a corporation engaged in commerce or in any activity affecting commerce from causing the formation of subsidiary corporations for the actual carrying on of their immediate lawful business, or the natural and legitimate branches or extensions thereof, or from owning and holding all or a part of the stock of such subsidiary corporations, when the effect of such formation is not to substantially lessen competition.

Nor shall anything herein contained be construed to prohibit any common carrier subject to the laws to regulate commerce from aiding in the construction of branches or short lines so located as to become feeders to the main line of the company so aiding in such construction or from acquiring or owning all or any part of the stock of such branch lines, nor to prevent any such common carrier from acquiring and owning all or any part of the stock of a branch or short line constructed by an independent company where there is no substantial competition between the company owning the branch line so constructed and the company owning the main line acquiring the property or an interest therein, nor to prevent such common carrier from extending any of its lines through the medium of the acquisition of stock or otherwise of any other common carrier where there is no substantial competition between the company extending its lines and the company whose stock, property, or an interest therein is so acquired.

Nothing contained in this section shall be held to affect or impair any right heretofore legally acquired: Provided, That nothing in this section shall be held or construed to authorize or make lawful anything heretofore prohibited or made illegal by the antitrust laws, nor to exempt any person from the penal provisions thereof or the civil remedies therein provided. Nothing contained in this section shall apply to transactions duly consummated pursuant to authority given by the Secretary of Transportation, Federal Power Commission, Surface Transportation Board, the Securities and Exchange Commission in the exercise of its jurisdiction under section 79j of this title, the United States Maritime Commission, or the Secretary of Agriculture under any statutory provision vesting such power in such Commission, Board, or Secretary.

any person from being a director of two or more competing corporations (Act Section 8; codified at 15 U.S.C. § 19

The answers post by the user, for information only, FunQA.com does not guarantee the right.



More Questions and Answers:
  • Why has the dollar lost 98% of its value over the past 100 years?
  • What is contract of employment in industrial relations?
  • How much annual income is considered being successful?
  • Money as Debt?
  • Dollar bills vs Dollar coins?
  • What are different developements in agriculture till today?
  • How do Monopolists determine how much output to produce and at what price?
  • Which of the following statements about the production possibilities frontier is true?
  • Will indian currency value overtake the us dollar in the future?