What is restraint of trade?
Article Abstract:
Antitrust laws prohibit the restraint of trade that undermines competition. The traditional rule of reason, the per se test, and the truncated rule of reason are the legal standards used to determine whether there is an antitrust violation. Most restraints of trade are evaluated under the traditional rule of reason. This requires the court to consider the facts relevant to the business affected by the restraint. The defendant must have market power, which is the ability to decrease output or increase prices above those in the competitive market. The per se test applies to restraints that are deemed illegal per se because they are unreasonable. They harm competition and lack redeeming qualities. The truncated or abbreviated rule of reason is used in cases where extensive industry analysis is not needed to reveal the anticompetitive nature of the restraint.
Publication Name: Journal of the American Dental Association
Subject: Health
ISSN: 0002-8177
Year: 1995
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Insurance exemption to the antitrust laws
Article Abstract:
The insurance industry is exempt from federal antitrust laws. Congress passed the McCarran-Ferguson Act in 1945 that upheld state regulation of insurance. Antitrust laws only apply to the 'business of insurance' that is not regulated by state law. Any 'business of insurance' must satisfy three criteria in order to qualify for exemption from the antitrust laws. It must spread or underwrite a policyholder's risk, involve a contract between an insurer and the insured, and be limited to bodies within the insurance industry. Federal legislators introduce bills to modify the McCarran-Ferguson Act almost every year. Most proposals would repeal the insurance industry's exemption from antitrust laws, but would allow the industry to jointly collect important historical and loss development data.
Publication Name: Journal of the American Dental Association
Subject: Health
ISSN: 0002-8177
Year: 1995
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Most-favored nation clauses and the Justice Department
Article Abstract:
Dentists will have to decide whether they want to sign a contract with an insurance company or managed care plan if the contract contains a most-favored-nation clause. This clause, which is also called a prudent buyer clause, states that the dentist will charge the same fees to all payers. The Justice Department has sued several large dental managed care plans because these clauses can violate antitrust laws if the insurer covers a significant part of the market. Several of the managed care plans have been prohibited by court order from using most-favored-nation clauses in their contracts.
Publication Name: Journal of the American Dental Association
Subject: Health
ISSN: 0002-8177
Year: 1996
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