Business Law Case Study Example | Topics and Well Written Essays - 1250 words

Business Law - Case Study Example 2). On the other hand, the Clayton Antitrust Act, another antitrust law of the United States of America, prohibits "exclusive dealings", "mergers or acquisition" if these acts substantially lessen competition (15 U.S.C., secs. 14 and 18). The US antitrust law refers to the body of laws that make illegal or unlawful certain business practices deemed to hurt businesses or consumers, or both, or violate business ethics. These include anti-competitive behaviors such as monopoly, restraint of trade and commerce, and unfair business practices like exclusive dealings, mergers, and acquisition and other practices that lessen business competition or harm the economy. In order to determine whether a corporate action or conduct is anti-competitive and thus prohibited by the antitrust law, two methods can be applied: the per se rule and the rule of reason. Under the per se rule which was utilized in the Sherman Antitrust Act, a corporate conduct is anti-competitive if is overwhelmingly harmful to the business or to the economy like horizontal price fixing or territorial division agreement. It does not require further evidences since it is evident on the face of the agreement itself. The rule of reason on the other hand, utilized in the Clayton Antitrust Act, requires the plaintiff to prove that the agreement caused economic harm in addition to proving that the defendant acted as charged. Merger is most likely the type of transaction that Awesea will offer in the case at hand. A merger is considered when both CEO's agree that joining together is in the best interest of the companies, as in the increase of sales but cutting the cost of operational expenses. The law on merger in relation to antitrust law is governed under section 7 of the Clayton Antitrust Act. It was further strengthened by the Celler-Kefauver Amendments of 1950 and the various merger guidelines issued by the US Department of Justice. Said laws modified the Sherman Antitrust Act where a mere merger is a violation of the antitrust law as a method of promoting monopoly (Sec. 1). At present, any challenges in the legality of mergers are decided using the rule of reason, that is, the plaintiff can only prevail upon proving to the court that the defendants are doing something which can bring substantial economic harm. The Clayton Act also allows the Federal Trade Commission and the Department of Justice to regulate all mergers and gives the government discretion whether to approve a merger or not. Another law, the Hart-Scott-Rodino Antitrust Improvement Act, provides in summary that before a certain merger can close, both parties must file a "Notification and Report Form" with the FTC and the Assistant Attorney General in-charge of the Antitrust Division of the Department of Justice so that the regulatory bodies can assess whether the proposed transactions violate the antitrust law of the US. Applying the rule of reason under the Clayton Act, when a company merges or acquired another company in order to promote its product in a certain country or to increase it sales, said transaction lessens competition, thus violates the antitrust law. The said fact is supported by various decided cases by the US Supreme Court which still are in effect today. One case is US v. Falstaff Brewing Copr., et. al., 410 U.S.