Ethical Scenarios: Antitrust Law Violations and Counterfeit Products

This essay delves into two ethical scenarios, examining potential violations of antitrust laws and the implications of counterfeit goods. The first scenario involves two leading bar review companies, BRG and BARMAX, entering an agreement to divide their business operations, potentially violating the Sherman Antitrust Act by restricting competition and leading to price fixing. The essay analyzes the illegality of their actions under both the Sherman Act and the Federal Trade Commission Act, highlighting the detrimental effects on consumers and the principles of fair competition. The second scenario focuses on Reliable Time Inc., a company accused of counterfeiting watches by using the Lauren label without authorization. The essay concludes that the company's actions constitute counterfeiting due to the unauthorized use of a trademark, violating intellectual property rights. The analysis draws on relevant legal frameworks and case examples to illustrate the consequences of such actions.

Running head: ETHICAL SCENARIOS 1
Ethical Scenarios
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ETHICAL SCENARIOS 2
Ethical Scenarios
Scenario 1
The United States has laws (antitrust laws) that control and regulate the operation of
business activities preventing consumers from predatory business practices by the retailers.
The goal of these laws is to provide a levelled playing field for homogeneous businesses that
operate in a particular sector while preventing them from gaining too much monopoly over
their competitors in a market. They stop companies from using unfair means to gain
dominance over the market. In the case scenario of the leading providers of bar review
materials and lectures in Georgi (BAR MAX and BRG) entering an agreement to limit their
business operation to a specific area is anticompetitive and is illegal under the federal
Sherman Antitrust Act.
Antitrust law, as the collection of all state and federal laws that regulate the way in
which every organization conducts their business, serve three main functions. All the three
functions, through the acts, tend to work towards promoting the fair competition for the
consumers to benefit (Gani et al, 2018). Otherwise, without the regulations, there are business
organizations which would find it too easy to monopolize the market with their services thus;
putting the consumers at risk of not getting the most appropriate benefits. Therefore, antitrust
laws were put into place to give protection against the various unfair activities like bid
rigging, monopolies and price fixing among many others. In the scenario of the two
companies, BRG and BARMAX, their conduct is illegal under the federal antitrust laws.
In 2000, the Federal Trade Commission (FTC) justified the collusion of FMC Corp. guilty of
and Asahi Chemical Industry in their attempt to divide the market for microcrystalline
cellulose, the commission then locked FMC from giving out Asahi product half a decade and
microcrystalline to any contender for a decade in the states (Aharoni, 2014). In the part two
of the Shearman Antitrust law stating that “every person who shall monopolize, or attempt to

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monopolize, or combine or conspire with any other person or persons, to monopolize any part
of the trade or commerce among the several States, or with foreign nations, shall be deemed
guilty of a felony” The attempt by the Georgian leading firms agreeing to divide market, on
the other hand, led to increasing in price of the BRG’s courses which is also a violation of the
federal antitrust act.
The BRG company having monopolized the marked within Georgia and seeing no
competition decided to increase the prices of their courses which in turn affects the
consumers since when making choices about commodities, they hold the opinion of free
determination of the price based on the production determinants (demand and supply) not by
an accord by two or more competitors. The result of the agreement of these two companies is
a higher cost of the courses by one of the companies which under the federal antitrust law of
price-fixing is illegal is considered exploitive. Although the cases of price-fixing may be hard
to uncover but having circumstantial evidence, such agreements may be unveiled and the
companies involved charged for the offense.
As for the first act, Sherman Act, it outlaws any form of conspiracy, contract, or trade
restraint which is inclined towards the act of monopolizing the market with their own services
and goods in the market. According to the Sherman Act, it outlaws any contract or
partnership which is aimed towards monopolizing the market; besides, any agreement
between two competing partners to rig bids and divide markets is considered illegal under the
regulatory laws (McKenzie, 2015). Therefore, the action of these two companies coming
together into partnership, with sole reason of diving market shall lead to monopoly;
something which the federal laws outlaws. Though the act does not prohibit restraint of trade,
it is totally against the monopoly of the market.
In the case of the two organizations, BRG and BARMAX, their conduct seems to be
so illegal under the first antitrust law; this is due to the fact that they are competitors which

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later resolve to forming a partnership which would enable them to totally monopolize the
market. Such acts which violates the Sherman Act need no defense or even justification; and
for that reason, the two partners deserve a penalty (Alese, 2016). Through proper civil
actions, they need be prosecuted for the criminal act, by the department of Justice. However,
this would only be done according to the total gains that the partners would have enjoyed
over the period, within which they have been together as business partners.
Second reason which proves the reason unto why conduct of the two organizations is
illegal under federal antitrust laws is due to the violation of Federal Trade Commission Act.
As the federal antitrust law which comes second in line, Federal Trade Commission Act bans
all deceptive practices which harm the fair competition in the market (Janis et al, 2016). For
instance, there would be some healthy competition between the two organization before their
attempt to partner so that they could make one a joint organization; perhaps, monopoly of the
market would not be an issue if the two organizations would have maintained their parallel
ways of operations (Curran, 2016). After they have deceptively made an attempt of
partnering, so that they divide market and rig bidding, their act falls under violation of the
second antitrust law. Their act was so deceptive that one organization would end up not
competing the other beyond certain boundaries; this is a direct violation of the act which
outlaws such like actions; since they are solely inclined towards avoiding competition
between them so that they would fully come to the agreement of monopolizing the markets in
certain regions and boundaries.
Scenario 2
Counterfeit cases, recently, have been so rampant of late as many dealers try to get
into the market with goods and services which are considered not to be genuine. Sources of
such counterfeits are numerous; among them the transit goods, adulteration of products and

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direct imports (Casareo, 2015). Such activities are discouraged and outlawed by all the
federal laws and regulations which oversees the trading activities. As for the case of Reliable
Time Inc. shipment, the outcome shall reveal them to be an incorporation which is entangled
in counterfeiting of their products. The fact that their watches have label of Lauren is not so
much of a problem but, the fact that the labels are sufficed without Laurel’s consent makes
the organization’s products to be more of counterfeits (Damnjanovic, 2014). The fact that
Laurel’s label imitates the genuine rights and participation of Laurel makes the company’s
act be so more of a pirating activity. Since Laurel is not part of the company’s operation and
has no consent on his name’s use as a label in the watches, every watch that has his name in
the label is considered counterfeit. The outcome of the case shall leave the Reliable Time Inc.
guilty of counterfeiting because all the watches have a trademark which is owned by Laurel
himself.

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References
Gani, L., Gitaharie, B. Y., Husodo, Z. A., & Kuncoro, A. (2018). Competition and
Cooperation in Economics and Business. London: Routledge, Taylor & Francis
Group.
Aharoni, Y. (2014). Coalitions and Competition (Routledge Revivals): The Globalization of
Professional Business Services. Routledge.
McKenzie, D. (2015). Identifying and spurring high-growth entrepreneurship: Experimental
evidence from a business plan competition. The World Bank.
Alese, F. (2016). Federal antitrust and EC competition law analysis. Routledge.
Janis, M. D., Hovenkamp, H., Lemley, M. A., Leslie, C., & Carrier, M. A. (2016). IP and
Antitrust: An Analysis of Antitrust Principles Applied to Intellectual Property Law.
Curran III, W. J. (2016). Commitment and Betrayal: Contradictions in American Democracy,
Capitalism, and Antitrust Laws. The Antitrust Bulletin, 61(2), 236-255.
Cesareo, L. (2015). Counterfeiting and piracy: A comprehensive literature review. Springer.
Damnjanovic, B., & Damnjanovic, D. (2014). U.S. Patent Application No. 13/562,185.