Tuesday, April 12, 2011


There are two general categories of restraint of trade practices: vertical restraints and horizontal restraints.

Horizontal restraints deal with price-fixing agreements and are highly illegal. Similar to price-fixing agreements and likewise illegal are other practices such as "bid rigging," boycotts, territorial impositions, and imposed minimum fee schedules.
    In a 1997 case, a Federal Trade Commission judge ruled that Toys 'R' Us, a toy-products retailer, entered into illegal vertical agreements that resulted in restricted sales to competing wholesale clubs. Toys 'R' Us was also found by the judge to be guilty of forming horizontal agreements with other toy manufacturers in an effort to thwart the same wholesale clubs from obtaining popular toys.
    In the US, two separate federal agencies, the Federal Trade Commission (FTC) and the DoJ(as well as injured private parties) can pursue claims against parties that coordinate to restrain trade. The criminal sanctions for violations of the Sherman Act are severe.US citizens may be sentenced to up to as many as 3 years’ imprisonment and may be fined the greatest of either:
   A vertical agreement involves participants who are not direct competitors because they are at different levels. Thus, a horizontal agreement can be among manufacturers or retailers or wholesalers, but it does not involve participants from across the different groups. A vertical agreement involves participants from one or more of the groups—for example, a manufacturer, a wholesaler, and a retailer.

   Just FYI and FYR. Whats great about America is that every citizen is provided with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just Powers from the consent of the governed. 


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