Question

The American Kennel Club (AKC), an independent organization that establishes standards for breeding and for certification of purebred dogs issued standards for all purebred dog breeds and recommended standards for Labradors. The result was that an English strain of Labradors did not meet the minimum height standards that the AKC recommended, and U.S. breeders of a taller American strain were able to monopolize the market for championship dogs. Which of the following statements is correct? a. The AKC has not violated the Sherman Act. b. The AKC has violated the Sherman Act. c. The AKC, however well intentioned, cannot impose standards on an industry. d. The AKC has violated the Sherman Act if U.S. breeders did benefit from the standards.

Answer 1

Answer:

a. The AKC has not violated the Sherman Act.

Explanation:

The Sherman Act is a law valid throughout the United States that establishes rules and guidelines for honest and fair competition between companies, that is, this law regulates how competition between companies should be established. Through this law, it is strictly forbidden for companies to establish anti-competitive agreements and conduct that tries to monopolize unfairly, a follow-up of the market.

In the question above, we have a monopoly in a correct way and for that reason, it does not violate the Sherman Act. This is because there were two companies that wanted to market a specific breed of dogs, however the dogs of one of these companies did not have the necessary characteristics to be featured in this breed, which allows the other company to monopolize that market segment.