Chapter 14: Government Regulation and International Business
Learning Objectives
- Explain the main consumer protection laws governing advertising, sales practices, labeling, credit, and data privacy.
- Describe the purpose of antitrust law and apply the Sherman Act and Clayton Act to common business practices such as price fixing, monopolization, and mergers.
- Identify the major federal environmental statutes and the obligations they place on businesses.
- Outline the basics of international business law, including trade regulation, sovereign immunity, and choosing the law and forum for cross-border contracts.
- Combine the course's topics to evaluate the overall legal risk of a business decision.
Week 14. Chapter content to be written. The description below sets out what the chapter will cover.
The final chapter covers the main areas in which government regulates the marketplace as a whole, protecting consumers, competition, and the environment, and it looks briefly at the rules for doing business across national borders. It finishes with an integrative case that draws on every chapter in the book.
14.1 Planned Sections
Consumer Protection. The FTC and deceptive advertising, bait-and-switch, online and social media advertising (including influencer disclosures and fake reviews), telemarketing and the TCPA, labeling and packaging laws, the FDA, the Consumer Product Safety Commission, and consumer credit protection (Truth in Lending Act, Fair Credit Reporting Act, Fair Debt Collection Practices Act, and the CFPB).
Data Privacy and Security. Collection and use of personal data, the FTC's role, state privacy laws such as the CCPA/CPRA, the EU's GDPR, data breach notification requirements, and sector-specific laws such as HIPAA, COPPA, and GLBA.
Antitrust Law. The Sherman Act: horizontal restraints (price fixing, market division, group boycotts), vertical restraints, per se rules and the rule of reason, monopolization and attempted monopolization. The Clayton Act: price discrimination, exclusive dealing, tying, and mergers. Enforcement by the DOJ and FTC, and current antitrust issues involving technology platforms.
Environmental Law. NEPA and environmental impact statements, the Clean Air Act, the Clean Water Act, toxic substances and pesticides, hazardous waste under RCRA and CERCLA (Superfund) liability, and how businesses manage environmental compliance.
International Business Law. Sources of international law, the act of state doctrine and sovereign immunity, the CISG compared with UCC Article 2, choice-of-law and forum-selection clauses, international arbitration, export controls and sanctions, tariffs and the WTO, and the FCPA in global operations.
Bringing It Together. An integrative capstone case in which a growing company faces a product recall, an employee dispute, a supplier breach, and a regulatory investigation all at once. Students apply the full course to identify the issues, assess the risks, and recommend a course of action.
14.2 Featured Case
United States v. Microsoft Corp., 253 F.3d 34 (D.C. Cir. 2001) (en banc). The Justice Department and 20 states accused Microsoft of protecting its Windows monopoly by tying the Internet Explorer browser to the operating system and by restricting computer makers and other partners. The D.C. Circuit affirmed that Microsoft had illegally maintained a monopoly under Section 2 of the Sherman Act. It reversed the order to break up the company, and it sent the tying claim back to be judged under the rule of reason rather than a per se rule. The case ended in a settlement that imposed conduct restrictions.
Why this case: It shows monopolization, tying, and the difference between per se rules and the rule of reason in a technology market students understand. It is also the direct background to today's antitrust cases against large technology platforms.
Discussion question: Compare Microsoft's bundling of a browser with Windows to a current platform practice, such as a default search engine or an app store's payment rules. Is it the same kind of conduct?
14.2.1 Short Case Summaries
- Standard Oil Co. of New Jersey v. United States, 221 U.S. 1 (1911). The breakup of Standard Oil, and the decision in which the Supreme Court adopted the "rule of reason" for judging restraints of trade. (Antitrust law)
14.3 Planned Features
- An integrative capstone case and guided analysis, which can serve as the final project for the course.
- A "regulatory map" showing which agency oversees which business activity.
- Key terms: deceptive advertising, Truth in Lending Act, data breach, GDPR, Sherman Act, price fixing, per se violation, rule of reason, monopolization, tying arrangement, merger, environmental impact statement, Superfund, CISG, sovereign immunity, choice-of-law clause.