Under the Sherman act, Continental’s conduct was illegal because they were engaged in predatory pricing. This was caused by lowering their actual cost of bread for a temporary period to drive their competitor’s out of business or in this case, less shelf life or prominence in the stores..
2. Is predatory pricing a per se violation? (Support your answer with an example from the Internet).
As per the text (pg 539) price fixing is the following: Any agreement or collaboration among competitors “for the purpose and with the effect of raising, depressing, fixing, pegging, or stabilizing the price of a commodity” is price fixing, is a per se violation of Section1 of the Sherman Act.
Attached is a California Case, in which a newspaper company (Bay Guardian) was fined $21 million for advertising a lower cost newspaper, for the purpose of harming its competitor.
1. Where were the details of the credit transaction explained? The credit terms were displayed on the windshield of the cars (printed on a 2 ¼” x 3 5/8”sticker) that were for sale. These terms included the price, the down payment, the terms in months, and the average interest rate applied to the installment payments. The details of the credit transaction were probably more explained during the recorded conversation between the undercover agent and the salesman.
2. Did the court need the testimony of the salesman’s words? The evidence was so grossly apparent during the inspection of the dealership that salesman’s testimony was not needed.
| Class, read case 8.2 United States Allegheny Bottling Co. on pages 251-252 and address the following questions.
1. Is corporate imprisonment illegal?
2. Is community service a sufficient punishment for the corporation? 1. Teddy's Supplies' CEO has asked you to advise him on the facts of the...