Antitrust Laws and the Federal Trade Commission Act
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Memorial Hospital, a hospital in Bordertown, Iowa, has an agreement with Careco, a managed care organization with plan members in the states of Iowa, Nebraska, and South Dakota, to provide medical care to its members.
A condition of Memorial's agreement states that Careco cannot contract with other hospitals in the Bordertown, Iowa area. The contract is for a year and either party may terminate the contract for any reason, with a 60-day notice period.
Discuss any possible anti-trust laws that Memorial may have violated. Also, discuss any defenses that Memorial can establish to an anti-trust action. To answer this question, you may refer to Antitrust Review at http://www.justice.gov/atr/about/antitrust-laws.html.
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Solution Summary
Memorial Hospital, a hospital in Bordertown, Iowa, has an agreement with Careco, a managed care organization with plan members in the states of Iowa, Nebraska, and South Dakota, to provide medical care to its members.
A condition of Memorial's agreement states that Careco cannot contract with other hospitals in the Bordertown, Iowa area. The contract is for a year and either party may terminate the contract for any reason, with a 60-day notice period.
Discuss any possible anti-trust laws that Memorial may have violated. Also, discuss any defenses that Memorial can establish to an anti-trust action. To answer this question, you may refer to Antitrust Review at http://www.justice.gov/atr/about/antitrust-laws.html.
Solution Preview
One of the main antitrust laws is the Federal Trade Commission Act which prohibits "unfair methods of competition in interstate commerce" (DOJ, 2012). This would be the only applicable antitrust law in this case. The Sherman Act would not be applicable because the agreements in place do not qualify as restricting trade to the extent necessary for a Sherman Law violation, and the Clayton Act would not apply because there is no merger or acquisition in place. When this case is analyzed against the ...
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