Agreements I. Barbados Fair Trading Commission Program in Competition Law and Policy Barbados – March 30 – 31, 2011 Sean Dillon Bureau of Competition United States Federal Trade Commission
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Barbados Fair Trading Commission
Program in Competition Law and Policy
Barbados – March 30 – 31, 2011
Bureau of Competition
United States Federal Trade Commission
These views are those of the author and do not necessarily represent the position of the Federal Trade Commission or any individual Commissioner.
“Every contract, combination … or conspiracy, in restraint of trade … is declared to be illegal ....”
Purpose and effect are irrelevant
These include cartels and other agreements that by nature almost always injure competition
Judged by “rule of reason”
May or may not be illegal depending on all of the facts and circumstances, including its purpose, any anticompetitive effects, any benefits from the agreementAgreements Between Competitors
U.S. law divides anticompetitive agreements between competitors into two groups:
A large group of auto dealers agreed to restrict their showroom hours, including closing on Saturdays. The agreement reduced a service that dealers normally provide – convenient hours – and made it difficult for consumers to comparison shop. (Detroit Auto Dealers)
1)Because they increase efficiency of the distribution system and thus help lower supplier costs;
2)Because they increase the supplier’s market power and enable it to earn monopoly profits.