2.  Legislation provides a level playing field for companies that may not otherwise be able to compete  Well-developed and effective marketing plans usually avoid most legal issues

3.  Protect Companies from each other  Protect consumers  Protect the interests of Society

4. Enforcement is  the responsibility of the executive branch of the federal government or a federal administrative agency  a choice

5. 1890 Sherman Antitrust Act 1914 Clayton Act Federal Trade Commission Act 1936Robinson-Patman Act 1950Celler-Kefauver Act 1975Consumer Goods Pricing Act

6.  Monopolies, attempts to monopolize  Civil and criminal penalties.  Injunctions to cease activities  Injured parties may recover treble damages in civil court. o Treble damages: three times the actual loss as a result of a violation of antitrust law.  Criminal penalties (substantial fines, and jail time up to three years)

7.  Supplement to the Sherman Act  Limitations on o Tying agreements o interlocking directorates o intercorporate stockholding  Provides for civil penalties only.

8.  Broadly defined unfair competition or competitive situations  Established the Federal Trade Commission  The Wheeler-Lea Act (1938) expanded powers: o To regulate unfair or deceptive practices whenever the public is deceived.  Common method of enforcement is the Consent Decree o Consent decree: written agreement between defendant and prosecution to avoid undertaking an act that would violate law.

9.  Often known as “the price discrimination act” o Buyers as well as sellers can be held liable for actions that violate antitrust law o Requires proportionally equal terms to buyers in common markets.

10.  The “Antimerger Act.” o Broadened power to prevent acquisitions where they may substantially impact competition.

11.  Prohibits price maintenance agreements among manufacturers and resellers  Repealed Miller-Tydings Act (1937) o Had allowed “fair trade,” a form of price maintenance.

12.  Designed to protect investing public, rather than business competitors and customers.  From a marketer’s perspective, important provision is the silent period relating to Initial Public Offerings (IPO’s )

13.  Standard set of laws that govern contracts and associated case law  Most portions of the UCC adopted by 49 of 50 states (excluding Louisiana)  Consistency in the UCC between states helps with the administration and enforcement of contracts across state lines

14.  Public Company Accounting Reform and Investor Protection Act of 2002  Commonly called “SOX”  Est. Public Company Accounting Oversight Board  SOX inspired: o “Canadian Sarbanes-Oxley Act,” Bill 198 (C- SOX) o Australian Corporate Law Economic Reform Program, (CLERP) o Japanese Financial Instruments and Exchange Law, (J-SOX)

15. I

16.  When a company owns another company in the same market in an attempt to control the company so that competition is reduced  Not necessarily illegal for one company to own another company in the same market  However, it is illegal to use that ownership to reduce competition and choice.

17.  When a company has members of its board of directors serve on the board of another company.  Companies that compete in the same market cannot have common directors such that actions would lessen competition in their markets.  Key: what is a “market?”

18.  When a manufacturer attempts to dictate the resale price of an item – generally illegal.  Manufacturers may “suggest” resale prices  Influence allowed when added value provided by manufacturer or channel partners (e.g., providing financing for inventory, etc.)  Attempts to protect full-service retailers from free rider retailers o Free ride retailers provide fewer services and a reduced selling price. o Without this protection, consumers would likely go to full service retailers for product information, but purchase from free ride retailers

19.  When a company refuses to restock or supply associated services to dealer that has not followed suggested pricing guidelines.  Refusal to deal is generally illegal.  Courts have recognized the right of a seller to sell or not sell to whomever it desires, as long as the reason is not to fix prices or restrain trade.

20.  Occurs when a company: o Maintains house accounts (customers that are within the reseller’s market but are served directly by the supplier) o limits resellers to certain territories  The courts have not come down on clearly on either side of this issue.

21.  Major issue B-2-B marketers will face o Application of Robinson-Patman Act  Occurs when a supplier sells the same product to the “same class” of buyers at different prices such that it reduces competition in the buyer’s market  Selling products at different prices to customers that are not in competition with one another is not considered discriminatory

22. Pacific Model 1000 5000 units/month $38 per unit Desktop Computer Market Pacific Model 1000 5000 units/month $38 per unit NBM Computers Palo Alto Computers PACIFIC DRIVES Exhibit 4-4 Pacific Drives supplies the same product to two customers who compete in the same market.

23. Exhibit 4-5 United Memories aggressive price at NBM Computers Pacific Model 1000 5000 units/month $38 per unit Desktop Computer Market Pacific Model 1000 5000 units/month $38 per unit NBM Computers Palo Alto Computer PACIFIC DRIVES UniMem Model 300 5000 units/month $32 per unit UNITED MEMORIES

24. Exhibit 4-6: Spartan Computers Enters the Market UNITED MEMORIES UniMem 300 5000 units/mo. $32 per unit Pacific Model 1000 500 units/mo. $55 per unit Desktop Computer Market Pacific1000 5000 units/mo. $38/unit NBM Computers Palo Alto Computer PACIFIC DRIVES Spartan Computers Pacific1000 5000 units/mo. $38/unit

25.  Offerings sold: o for different uses o to separate markets o at different times o that are not identical o to government agencies o at prices that meet a competitive threat are generally not a violation of price regulations.  Offerings created through supplier-customer collaboration, partnering, customizations are not identical and therefore not subject to price regulations

26.  This test has three considerations: o SIZE: of organization involved o VOLUME: of business involved o SIGNIFICANCE: of market preemption

27. 1. Patents 2. Copyrights 3. Trade Secrets 4. License 5. Cross-License 6. Joint Venture

28.  Protection granted by the federal government to inventors of original products, processes, or compositions of matter.  Functional patents last 20 years.  Design patents last 14 years.

29.  Protection for the original works of authors, musicians, and photographers.  Protects the expression of an idea, not the underlying idea itself.  Copyrights are granted to individuals for their lifetimes plus fifty years.  Copyrights automatically apply to all work created since 1989.

30.  A process, technique, or competitive advantage whose owner has chosen not to seek legal protection to avoid disclosure.  It cannot be something that is common knowledge, and the owner must have taken reasonable efforts to keep the trade secret a secret.  Owners are not able to license, sell, or trade them with the same degree of legal protection as patents or copyrights

31.  Permission to use an asset as one’s own without any right of ownership  Granted by the owner of the asset

32.  Occurs when two businesses each have patents or other intellectual property that is of value to the other  Greater advantage in same or different markets

33.  Organization where two firms combine to approach a particular market or share a particular technology  Venture operates as an independent business