Sherman Act Section 1 Violation

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However, the NCAA by laws allow member institutions at which the student-athletes are enrolled, institution’s conference, and institutionally controlled non-profit organization to sell commercial items with name, likenesses, or pictures. Congress passed the Sherman Act in 1890, with the purpose of protecting competition within the nation’s marketplace. The Sherman Act relates to “activity that involves or affects interstate commerce.” 15 United States Code Section 1 states, “Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal.” A violation of this statute can result up to $100,000,000 in fines for a…show more content…
The Supreme Court held that an agreement that is “so consistently unreasonable that the question of reasonableness is foreclosed”, would qualify as a per se violation of the Act. Examples of per se violations include group boycotts and concerted refusals to deal. A group boycott is "a refusal to deal or an inducement of others not to deal or to have business relations with tradesmen." A concerted refusal to deal is "an agreement by two or more persons not to do business with other individuals, or to do business with them only on specified terms." When analyzing a Section 1 Sherman Act violation under the rule of reason, the court will review “whether the restraint imposed is justified by legitimate business purposes and is no more restrictive than necessary.” The defendant will not be guilty of violating anti-trust laws if the defendant can prove that the restraint of trade had a legitimate purpose to further their business by using the least restrictive means to achieve…show more content…
The grant in aids that the students receive are not the least restrictive means of carry out a legitimate business purpose. In O’Bannon, the Court ruled “The athletes accept grants-in-aid, and no more, in exchange for their athletic performance, because the NCAA schools have agreed to value the athletes’ name and likeness at zero, ‘an anticompetitive effect’.” This anticompetitive effect is an anti-trust violation under the rule of reason. Experts also concluded that providing smalls amounts of compensation will not affect consumer interest in collegiate sports. Therefore, the Defendants violated Section 1 of the Sherman Act and the Plaintiffs should be awarded the cost of full attendance and a

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