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Sherman Act Monopoly - YouTube
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Okay. What are the prohibitions under
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section 2 of the Sherman Act that is the
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prevention of formation of monopolies or
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attempts or conspiracies to for
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monopolies? Well generally the start with
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a monopoly is defined under common law
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as "the possession of monopoly power in
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the relevant market and the willful
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acquisition or maintenance of that power
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as distinguished from the growth or
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development as a consequence of a
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superior product business acumen or
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historic accident". Okay. So this comes
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down to two elements there must be the
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possession of market power within the
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relevant market and that market power is
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generally understood the ability to
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affect prices or supply in the market
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and then a relevant market will be
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judged with in the competitive arena
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therefore where the product good or
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services are sold to consumers. And then
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you must acquire that monopoly power or
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maintain that monopoly power through
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some form of unfair competition, that is
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you have to undertake unfair practices.
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So some of which some examples of which
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would give in subsequent videos but it
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can't you can't have acquired that
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monopoly power you can't maintain that
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by monopoly power simply through good
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competition simply through being a
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superior competitor through superior
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products, superior methods, or even
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historical accident right timing what a
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natural disaster whatever. Right.
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So anyway it prevents this any competitive
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activity not the simple possession of
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market dominance itself that's
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characterized by monopoly. Alright.
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The second attempts to monopolize. Now this
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has a couple of factors as well the
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defendant must engage in some predatory
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or any competitive activity, so that's
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first. So again it's not it's not that
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you simply gained monopoly power in this
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way or you are undertaking
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pro-competitive activity to gain
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monopoly powers that you are doing
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something unfair could be deceitful
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could be
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or could just be anti-competitive such
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as predatory pricing being the primary
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example there. And the second element is
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with the specific intent to monopolize,
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so your intent is to eliminate
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competitors from the market that is you
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control the only fountain or the only
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source of the product or service in the
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market so you have that kind of control
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over the availability and pricing of
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goods in the market. And three there is a
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dangerous probability of you actually
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achieving your goal. Now this is
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evaluated based upon the circumstances
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of the business in the market number of
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competitors etc. So again these three
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elements deceitful practice intent to
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gain monopoly power and dangerous
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probability of it actually occurring and
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again the quarter FTC would evaluate all
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of these when deciding whether to go
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forward with a action against the
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business. And the third is a conspiracy
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well this requires an agreement between
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more than one competitor in the market
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with the intent or purpose of gaining
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monopoly power and one of the
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individuals to the agreement one of the
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parties to the agreement has to do some
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overt act in furtherance of that
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agreement. Now unlike with a temp there
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does not have to be a strong probability
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of actually achieving the monopoly it
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simply has to be an agreement and then
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an overt act in furtherance so far lower
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standard there. So those are the three
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primary types of or three broad overview
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prohibitions against monopolies attempts
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or conspiracies to create a monopoly
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under section 2 of the Sherman Act.
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