XYZ, Inc. manufactures widgets and sells them through various wholesale dealers. Several other firms also manufacture widgets. Of course, XYZ wishes to conduct its business within the bounds of the law, including the rules of antitrust law. As you study this chapter, consider the following questions regarding possible courses of action and their treatment under antitrust law:
Would XYZ violate antitrust law if XYZ deliberately causes its prices to parallel those of a competing widget manufacturer?
If XYZ and a competing widget manufacturer agree that each will charge no more than a certain agreed amount for their widgets (i.e., a maximum price), is there an antitrust violation? What if XYZ and its competitor agree to set a minimum price in order to avoid what each sees as the potentially ruinous consequences of a price-cutting war?
Is there an antitrust violation if XYZ and its wholesale dealers agree that the dealers will adhere to an established maximum sale price when they sell to retailers? What if the agreement between XYZ and the dealers is that the dealers will adhere to a certain minimum price when they sell to retailers?
If XYZ and its wholesale dealers agree on exclusive sales territories within which each dealer will operate, is there an antitrust violation?
Is there an antitrust problem if XYZ informs its dealers that it will not sell them widgets unless they also buy a certain unrelated product from XYZ, and the dealers, wanting to preserve their widget dealerships, agree to this provision?
Would there be an antitrust violation if XYZ and some of the other widget manufacturers agree that each manufacturer will have an exclusive geographic area of business operation?
Is there an antitrust violation if XYZ and some of the other widget manufacturers agree not to purchase, from a certain supplier, materials used in making widgets?
If XYZ's widgets acquire a public reputation for being high in quality and this perception leads, over time, to XYZ's holding a market share so large that XYZ effectively holds monopoly status, has XYZ run afoul of antitrust law?
Regardless of the legal treatment given to the behaviors referred to in the above questions, consider the ethical questions suggested by such conduct.
