Practice Quiz

Paralegal Exam Prep

Category - Legal Envrmt

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In 2000, the worldwide airline industry was in trouble. Many airlines were on the verge of bankruptcy. Several airline executives, in an attempt to avoid financial ruin, instituted a scheme that artificially inflated passenger and cargo fuel surcharges between 2000 and 2006 to make up for lost profits. When the U.S. Department of Justice discovered the scheme, the airlines were fined a total of over $1 billion dollars, and a few executives served jail time. The airlines and executives were found to have engaged in which impermissible activity?
  1. Tying arrangement
  2. Collusive bidding
  3. Monopolization
  4. Price fixing
  5. Exclusive dealing
Explanation
Answer: D. The airlines and executives were found to have engaged in the impermissible activity of price fixing. Section 2 of the Sherman Antitrust Act prohibits price fixing, as it is a restraint on trade. Penalties include steep fines for corporations and jail time for individuals.
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