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Antitrust

Handbook for Business Executives

Legal

Division

Abbot t

L abor atories

M essage from the Legal Division


Dear Employee: Abbott Laboratories has a Corporate Policy (Policy No. 34-2) that requires all employees worldwide to comply with the antitrust laws. Failure to comply with these laws may result in serious monetary and other penalties for the company and its subsidiaries worldwide (the Corporation) and for those individuals involved. In some cases, individuals who violate the antitrust laws may be sent to prison. Employees who violate this Corporate Policy will be subject to disciplinary action which, in appropriate circumstances, may include dismissal. The experience of many companies shows that antitrust problems often arise because the employees involved did not recognize potential issues or the need to consult with a lawyer or because they chose to act as their own lawyer. The purpose of this Handbook is to familiarize you with some of the basic principles of the antitrust laws to enable you to recognize potential issues and know when to consult the Legal Division. You should not view this Handbook as a substitute for obtaining advice from the Legal Division on antitrust matters.

The Legal Division

Table of Contents
Corporate Antitrust Policy .................................................................................................i INTRODUCTION .............................................................................................................1 Purposes of the Antitrust Laws........................................................................................1 Sources of the Antitrust Laws..........................................................................................1 International Aspects .......................................................................................................1 Organization of this Handbook ........................................................................................1 GENERAL PRINCIPLES ................................................................................................2 Companies Should Act Independently ............................................................................2 Each Situation Is Unique .................................................................................................2 Some Terms Have Special Meanings .............................................................................3 CONDUCT WITH COMPETITORS .................................................................................4 Illegal Agreements ...........................................................................................................4 Trade and Professional Association Meetings ................................................................5 INDEPENDENT CONDUCT............................................................................................6 Unlawful Monopolization and Attempted Monopolization ................................................6 Monopoly Power..............................................................................................................6 Relevant Market ..............................................................................................................7 Exclusionary Conduct......................................................................................................7 Patents as Monopolies..................................................................................................8 CONDUCT WITH CUSTOMERS, SUPPLIERS AND DISTRIBUTORS .........................9 Restrictions Imposed on Customers, Suppliers or Distributors.......................................9 Differential Pricing..........................................................................................................11 ACQUISITIONS.............................................................................................................12 Government Notification ................................................................................................12 Steps to Follow ..............................................................................................................12 UNFAIR TRADE PRACTICES ......................................................................................14 DOCUMENTS ...............................................................................................................15 Document Preparation...................................................................................................15 Words to Avoid ..............................................................................................................16 Lawsuits and Investigations ..........................................................................................17 WORKING WITH THE LEGAL DIVISION ....................................................................18 The Legal Divisions Responsibilities ............................................................................18 Your Responsibilities .....................................................................................................18 Whom to Contact...........................................................................................................18 Other Legal Division Services .......................................................................................18 REPORTING VIOLATIONS ..........................................................................................19 APPENDIX ....................................................................................................................20 NOTES ..........................................................................................................................22

C orporate Antitrust Policy


Abbott Corporate Policy No. 34-2, Compliance with the Antitrust Laws, provides, in part, that: 1. Prior to contracting with a competitor, employees should review the proposed arrangement with the Legal Division. Additionally, the negotiation and finalization of any arrangement with a competitor requires the involvement and approval of the Legal Division. 2. No employee shall exchange, discuss or benchmark with any competitor information relating to the Corporations prices or pricing policies, distribution policies, supplier or customer selection or classifications, credit policies, or any other similar competitive information. 3. No employee shall participate in any trade association or other meeting, whether formal or informal, at which arrangements or understandings with competitors of the type described in Paragraph 1 are being made or at which competitive information of the type described in Paragraph 2 is being exchanged or discussed with competitors. 4. Employees should consult with the Legal Division regarding the application of this Corporate Policy to any particular circumstance. The term employee as used in this Corporate Policy also includes agents of the Corporation.

ntroduction

Purposes of the Antitrust Laws


The main purposes of the antitrust laws are to promote competition, to enhance consumer welfare and to achieve market efficiency. These purposes are generally consistent with one another but, in some cases, they conflict and the antitrust laws may then favor one purpose over another one.

Sources of the Antitrust Laws


There is no single source of antitrust law; instead, several distinct laws, some of which overlap with one another, form the basis for the principles outlined in this Handbook. In the United States, most of the key sources of antitrust law are found in four federal statutesthe Sherman Act, the Clayton Act, the Robinson-Patman Act and the Federal Trade Commission Actand in the numerous court decisions interpreting these statutes. Most states also have their own antitrust laws. For your information, the Appendix to this Handbook summarizes the scope of the four federal Acts.

International Aspects
This Handbook focuses on the federal antitrust laws of the United States and on conduct that takes place inside the United States. You should be aware that, in certain instances, the United States antitrust laws will apply to activities occurring outside of the United States. In other words, you can still violate the United States antitrust laws even if your conduct takes place in another country. Also, most other countries have their own antitrust laws which they usually call competition laws. Initially, you should assume that the basic principles outlined in this Handbook apply throughout the world. However, you should consult the Divisional Vice President, International Operations for legal advice pertaining to other countries competition laws.

Organization of this Handbook


Rather than present topics based on legal concepts, this Handbook focuses on business relationships. Its main sections present the major antitrust principles affecting how you conduct those relationships with competitors, with customers, suppliers and distributors, and within the Corporation.
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G eneral Principles
There are some general principles that will help you in better understanding and complying with the antitrust laws:

Companies Should Act Independently


As a general rule, the purposes of the antitrust laws are achieved when companies act alone in determining their prices, production levels, distribution methods, customers, suppliers and other matters related to financing, manufacturing, marketing and selling their products and services. Consequently, many of the prohibitions and restrictions under the antitrust laws involve improper contacts or agreements with competitors or with customers, suppliers or distributors for the purpose or with the effect of determining these matters jointly rather than alone. Generally, however, a company can choose to do businessor not to do businesswith anyone it wants, as long as it makes that choice alone.

Each Situation Is Unique


While this Handbook only outlines the general principles of antitrust law, the actual analysis which a lawyer does when giving antitrust advice is very dependent on the specific facts in question. The antitrust laws prohibit certain types of conduct regardless of the surrounding circumstances, while other types of conduct may or may not be illegal depending on those circumstances. Therefore, you should not assume that legal advice relating to one transaction, product or service automatically applies to a similar transaction, product or service. In fact, legal advice given for a specific product or service may change as, for example, market share increases or pricing or costs change.

Some Terms Have Special Meanings


Words and phrases used in the antitrust laws often have meanings different from the meanings which you may typically give them. For example, the word agreement has a very broad interpretation under the antitrust laws. In addition to formal written contracts signed by two or more parties, an agreement may exist based on written documents consisting of notes, letters, telefaxes or electronic mail messages. The concept of agreement is so broad that it can cover oral statements, including voice mail, and even conduct that implies mutual understanding. In other words, an agreement does not have to be in writing to be illegal for antitrust purposes. For this reason, you should do whatever you reasonably can to avoid even the appearance that you or the Corporation may have participated in an anticompetitive activity. Other terms with special meanings, such as tying, monopoly power and relevant market, are explained elsewhere in this Handbook.

C onduct with Competitors


Illegal Agreements
Certain types of agreements between competitors are so anticompetitive that the law considers them to be automatically (per se) illegal. For this reason, you should try to avoid contactbusiness or socialwith competitors. The next page contains guidelines for proper conduct with competitors in the context of trade and professional association meetings. Prior to initiating any contact with a competitor to negotiate a business arrangement, you should consult with the Legal Division to ensure that no portion of the proposed arrangement could have the anticompetitive consequences listed in the next paragraph. If social contact with a competitor is unavoidable, you should not discuss business matters. Agreements between competitors relating to the following subject matters fall into the per se illegal category: 1. Price fixing or bid-rigging. 2. Dividing up customers or territories. 3. Limiting or otherwise controlling production or sales volume. 4. Boycotting or causing others to boycott or refuse to deal with any third parties. You should not enter into any of these types of agreements with competitors. Additionally, you should not discuss with, benchmark with or otherwise disclose to competitors information relating to the prohibited items in the above list.

Trade and Professional Association Meetings


As part of your job, you may attend trade or professional association meetings, conventions, seminars or workshops at which competitors are present. These programs are important and legitimate activities; however, they deserve special attention because they provide opportunities or temptations to discuss or engage in the prohibited activities described on page 4. To avoid potential pitfalls, you should follow these guidelines when you participate in these gatherings: 1. Do Not Initiate or Participate in Prohibited Activities. When you attend functions at which competitors are present, you should not engage in the prohibited activities even if they are officially approved by the group sponsoring the meeting or other people are already participating. 2. Be Familiar with and Adhere to the Agenda. The meeting agenda can serve as an early indication of potentially troublesome areas. To the extent practical, you should encourage participants to follow the written agenda and agree to have someone prepare minutes of the meeting. You should not participate in informal or off the record meetings with competitors, and should not let down your guard just because you are at a social event or at a meeting break. 3. Leave the Meeting if Someone Else Starts a Prohibited Discussion. Although it may seem awkward, you should leave any meeting or end your participation in any discussion that involves prohibited activities. If practical, you should try to make the reason for your action known to the other participants. For example, you might say, It is against Abbotts policy to discuss prices with competitors. I request that the minutes reflect that I left the room prior to this discussion. 4. Involve the Legal Division. If you learn about any prohibited activities, promptly contact the Legal Division.

ndependent Conduct

The preceding discussion focused on improper conduct involving at least two participants. However, a company or individual acting alone can also violate the antitrust laws.

Unlawful Monopolization and Attempted Monopolization


Not all monopolies or attempts to obtain a monopoly are illegal. Monopolies that result solely from superior products, business acumen or historic accident do not violate the antitrust laws. Unlawful monopolization consists of two basic elements: (1) possession of monopoly power in the relevant market; and (2) willful acquisition or maintenance of that monopoly power as evidenced by some exclusionary conduct. The offense of attempted monopolization occurs when a company lacks monopoly power but: (1) specifically intends to monopolize the relevant market; (2) engages in certain exclusionary activities; and (3) has a dangerous probability of obtaining monopoly power. Because a companys market power may change over time, you should always remember that previously permissible business conduct may later be prohibited under the antitrust laws. The rules of acceptable conduct become more strict as market power increases.

Monopoly Power
In broad terms, monopoly power is the power to control market prices or output or to exclude competition in the relevant market. No precise formula exists for measuring monopoly power, but you should be aware that a company does not need to have one hundred percent of the relevant market to have monopoly power. A smaller market share is usually sufficient evidence of monopoly power depending upon factors such as the number of competitors, the market share of the next largest competitor, profit margins, pricing patterns and market entry barriers.

Relevant Market
For antitrust purposes, the relevant market is the area of effective competition for the products or services in question. The relevant market has both a product or service dimension and a geographic dimension. The relevant market for antitrust purposes is usually determined only after a complex analysis and is often different from the description of the market that you may be using in your daily business operations.

Exclusionary Conduct
Because having a monopoly is not in itself illegal, a monopolist or would-be monopolist must engage in some type of exclusionary conduct before it can violate the antitrust laws. The following paragraphs describe some of these exclusionary practices: 1. Predatory Pricing. Although the antitrust laws promote price competition, a seller who has monopoly power or even significant market power generally cannot set its prices below its cost. Determination of whether a product is being sold below its cost involves a complicated analysis. 2. Other Exclusionary Conduct. Many activities can be sufficiently exclusionary to establish an unlawful monopolistic practice. The tying and exclusive dealing arrangements described on pages 9 and 10 may fall into this category as may the unfair trade practices described later in this Handbook. In some situations, a sellers refusal to supply products to a certain customer or group of customers may constitute an exclusionary practice if there is no legitimate business justification for this refusal and the refusal injures competition. Generally, you should assume that the prohibited or restricted conduct discussed throughout this Handbook will constitute a sufficient exclusionary practice for unlawful monopolization or attempted monopolization.

Patents as Monopolies
A patent gives the patent-holder the right to exclude others from making, using and/or selling the invention which is the subject of the patent. Many people often refer to this right as giving the patent-holder a monopoly in the relevant invention, although this characterization is technically incorrect from a legal standpoint. Nonetheless, improper conduct relating to the patent, particularly conduct which attempts to broaden the scope of activities which the patent-holder can lawfully exclude others from undertaking, can constitute an antitrust violation. For example, you should not condition the granting of a patent license on the licensees purchase of unpatented products or require a licensee to accept licenses under other patents that it does not want. These activities may constitute prohibited tying arrangements of the type described on the next page. Likewise, requiring a licensee to pay a royalty for patent rights that have expired or on a package of goods only some of which are patented may be illegal. You should be aware that expiration of an inventions patent coverage does not necessarily mean that the product embodying the invention has lost whatever monopoly or market power it may previously have enjoyedeven after a generic product has come on the market. In fact, you should work closely with the Legal Division to be sure that activities that you may want to undertake to minimize the impact that generic competitors could have do not violate the antitrust laws.

with Customers, C onductDistributors Suppliers and


Restrictions Imposed on Customers, Suppliers or Distributors
Certain restrictions placed upon customers, suppliers or distributors can violate the antitrust laws. Some of these restrictions are of the per se illegal type while other restrictions require a detailed analysis. You should be aware of these restrictions whether the Corporation is the seller or the buyer and should consult the Legal Division before entering into any of these types of arrangements. 1. Resale Price Maintenance Arrangement. This practice occurs when a seller sets the price at which a buyer of its goods must resell such goods or when the seller sets a minimum resale price. Resale price maintenance can also occur when, short of dictating resale prices, a seller pressures the buyer into reselling at a particular price or takes concerted action with the buyers competitors to compel such resale pricing. Although setting a maximum resale price is no longer automatically illegal, it can, in many instances, still violate the antitrust laws. You should not engage in resale price maintenance arrangements. 2. Tying Arrangement. This concept describes a sellers practice of conditioning the sale of one product or service upon the buyers purchase of a second product or service. Whether the practice is illegal under the antitrust laws depends upon a complicated examination of many factors such as whether separate products or services are involved, whether sufficient market power in one product or service exists to force the purchase of the second product or service, and the sellers overall market position in the products or services involved.

3. Reciprocal Dealing Arrangement. This practice occurs when one company uses its purchasing power to coerce its supplier into buying products or services from that company, and may occur when two companies agree to buy each others products or services without any coercion involved. These arrangements can violate the antitrust laws when their effect is to foreclose competitors from making sales to those companies on the basis of price, quality or service. 4. Exclusive Dealing Arrangement and Requirements Contract. Exclusive dealing is an arrangement under which a distributor, dealer or franchisee agrees to deal only with a particular seller, and agrees not to carry the products of that sellers competitors. A related type of arrangement is a requirements contract, an agreement under which a buyer agrees to purchase its entire needs of a product or service from a single seller. Exclusive dealing and requirements arrangements are often legally justifiable and considered beneficial for both buyers and sellers because they may provide assured supply, price protection and the ability to undertake long-term planning. Such arrangements can, however, constitute antitrust violations when their effect is to foreclose the sellers competitors from entering into or remaining in the market. Factors such as the duration of the arrangement, the type of product or service involved, the number of buyers and sellers in the market, the ease of entry into the market and the effect on competition determine whether the arrangement will be illegal under the antitrust laws. 5. Other Restrictions on Customers, Suppliers and Distributors. Other practices that impair a customers, suppliers or distributors freedom to resell goods may also create problems under the antitrust laws. Such arrangements include any agreement under which the buyer agrees to sell only to a particular customer or group of customers, or to sell only within a particular territory. These restrictions require the Legal Division to perform a complex analysis to determine their legality.

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Differential Pricing
Generally, the antitrust laws require the Corporation to charge all buyers who compete with one another the same price for the same product. Charging different prices to different buyers can violate the antitrust laws where the effect may be to lessen competition between those buyers or between their respective downstream customers. To help you identify whether you have an unlawful differential pricing issue, here is a list of key questions the Corporations lawyers may ask: 1. What are the prices being compared (i.e., are there rebates, prebates, growth dividends, quantity discounts, bonus or free goods, coupons, commissions, fees or special credit terms that could be factored into the price)? 2. Are the sales to the favored and disfavored buyers for the same product? 3. Is the favored buyer a not-for-profit institution? 4. Is the favored buyer a government entity? 5. Did the sellers lower price result from a cost savings that it realized in selling to the favored buyer? 6. Was the lower price offered to meet a competitors price? 7. Do the favored buyer and the disfavored buyer belong to the same customer category? 8. Do the favored and disfavored buyers (or their respective customers) compete with one another? You should be aware that buyers can also face liability under the antitrust laws if they knowingly induce the seller to sell at an unlawful differential price.

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A cquisitions
Government Notification
The Corporation must notify the government prior to completing an acquisition of all but the smallest businesses in the United States. It does this by submitting an application called a Hart-Scott-Rodino filing or HSR filing to the Federal Trade Commission (FTC) and the Department of Justice (DOJ). In its review, the government will make an assessment as to whether the acquisition will create or tend to create a monopoly in any relevant market. If the FTC or DOJ determines that the acquisition will violate the antitrust laws, then, depending on how integral the anticompetitive component is to the entire transaction, the government may prohibit the deal entirely, require the Corporation to divest part of its or the other partys business or require the Corporation to undertake some other remedial activity.

Steps to Follow
There are some steps you can follow to maximize the likelihood that an acquisition will not be challenged by the government: 1. Contact the Legal Division Early. You should contact one of the Divisional Vice Presidents, Domestic Legal Operations as you begin to consider an acquisition to get an initial assessment of whether the proposed deal will pass the governments antitrust review. Senior managements willingness to pursue the transaction and the price it may be willing to pay for the target business may depend heavily on whether the entire deal is likely to go unchallenged by the antitrust authorities. Likewise, how seriously the seller will look at the Corporation as a possible purchaser may depend, in part, on the Corporations ability to obtain quick and favorable antitrust review of the acquisition.

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2. Prepare Documentation Carefully. The government requires the Corporation to submit, as part of its initial HSR filing, all studies, surveys, analyses and reports relating to markets and market shares, competition and competitors, sales growth potential and expansion into product or geographic markets that an officer or director prepared or considered in connection with the acquisition. The attorneys sometimes refer to these documents as 4(c) documents because that is the section of the HSR filing which requests those items from the Corporation. The FTC and DOJ use the 4(c) documents to help to assess whether the deal will have an anticompetitive effect that the government should prohibit or modify. To avoid improper or misleading characterizations of relevant markets or of the purposes for and consequences of the proposed transaction, you should have the Legal Division review in advance any acquisition documentation that you prepare for or otherwise plan to submit to an officer or director. 3. Control Pre-Closing Contact with Other Party. Typically, the Corporation will submit its HSR filing after it has signed the acquisition agreement and then wait until the government completes the antitrust review before closing the deal. While the FTC or DOJ is conducting its antitrust investigation, you should check with the Legal Division before contacting anyone in the acquisition target to be sure that the conduct you propose to undertake or the information you seek to obtain is appropriate.

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U nfair Trade Practices


There are numerous practices that may not violate the antitrust laws but, nonetheless, may be considered unfair trade practices. In conducting your business activities, you should be aware of some of the more common of these practices: 1. False or misleading advertising. 2. Misleading comparisons between your product and a competitors product. 3. Commercial bribery. 4. Coercing, intimidating or engaging in scare tactics against customers, prospective customers or suppliers. 5. Harassing a competitor by making fictitious inquiries about it, its products or its business practices, or by filing baseless lawsuits against it. 6. Inducing a breach of contract between a competitor and its customers, suppliers or distributors. 7. Tampering with a competitors product or collecting and destroying a competitors product literature. 8. Acquiring a competitors trade secrets by unfair means. 9. Shipping unordered goods or substituting goods without the customers consent. 10. Disparaging a competitors products, business practices, financial status or reliability by circulating false or misleading information.

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D ocuments
Whether the Corporation is bringing or defending an antitrust lawsuit, is being investigated for possible antitrust violations or is undergoing antitrust review for an acquisition, the documents that you prepare for your job may play a crucial part foror againstthe Corporation.

Document Preparation
Just as the concept of an agreement has a broad scope under the antitrust laws, what constitutes a document for purposes of proving an antitrust violation is also quite broad. In addition to contracts and memoranda, documents can consist of items such as earlier drafts of those contracts and memoranda, notes, calendars, marketing plans, financial analyses and telephone and electronic mail messages. You should keep the content of documents accurate and fact-based and avoid language that may inadvertently create the wrong impression about your business activities. This is especially important to keep in mind in using electronic mail where people tend to communicate more informally. Additionally, to the extent practical, you should explain the proper and lawful motives behind business decisions which may be subject to scrutiny, such as offering a particular customer a lower price to meet a competitive offer. Keep in mind that marketing or strategic plans and related documents have special significance in the context of an acquisition, antitrust investigation or lawsuit. Carelessly drafted marketing plans, for example, can imply an intent to monopolize. You should prepare these documents with great care, referencing sources for information about competitors wherever possible. With acquisitions, carelessly drafted documents can cause delay in the governments antitrust review of a pro-competitive transaction and can tip the balance against the Corporation in a transaction about which the government may have some anticompetitive concerns. When the government chooses to conduct an in-depth investigation of a proposed acquisition, it will require the Corporation to produce all relevant documentation, not just the 4(c) documentation for the HSR filing.

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Words to Avoid
You should keep in mind a few guidelines when preparing documents: 1. Do not use war words like destroy, eliminate or obliterate when referring to competitors. 2. Avoid using words such as tying, leveraging or bundling. These words may give the impression that an unlawful link between products, markets or practices exists, or lead to a misunderstanding about the nature of a legitimate link. 3. Remember that the word market has a special meaning under the antitrust laws. Where practical, you should use terms like product line or segment in its place. Also, you should try to avoid describing the Corporations position in percent of the market terms. 4. Do not describe the Corporation as dominating or controlling a market. The Corporation may have a leading product, but that is quite different from being able to exert monopoly power over a relevant market. Similarly, you should not claim that the Corporation set or otherwise established any market conditions or created barriers to entry or that a proposed acquisition or other deal or activity will enable it to do so. 5. Do not suggest or imply that the Corporation has inside or non-public information about any competitor or its plans.

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Lawsuits and Investigations


As you know, the Corporation has established standards for proper maintenance of business documents to help eliminate filesboth paper and electronicthat are no longer needed and to make available storage space for more productive uses. You should observe these document retention rules. However, once the Corporation suspects that it may be involved in an investigation or lawsuit, no one may destroy or alter documents which are relevant to that investigation or lawsuit. This is true even if those documents would otherwise have been destroyed as part of your normal records retention and destruction practices. Typically, the Legal Division will advise you if it believes you may have relevant documents. Often, however, because of the numerous sites holding potentially relevant documents, you may not be contacted immediately. In that case, you should consult with the Legal Division before you destroy anything which may be even remotely connected to any antitrust investigation or lawsuit.

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W orking with the Legal Division


The Legal Divisions Responsibilities
In the antitrust area, the Legal Division has three basic functions. First, it has responsibility for advising and educating employees on antitrust issues that arise in the regular course of business as well as in connection with acquisitions. Next, it has responsibility for antitrust lawsuits and investigations and HSR filings involving the Corporation. Finally, it coordinates internal investigations of violations and potential violations of the Corporate Antitrust Policy. This Handbook focuses primarily on the first function.

Your Responsibilities
You are responsible for contacting the Legal Division whenever a potential antitrust issue arises in the performance of your duties for the Corporation. If you are not certain whether a proposed course of conduct will create a problem under the antitrust laws, contact the Legal Division to review the issue. You should not act as your own lawyer or follow the legal advice of a co-worker.

Whom to Contact
For advice on antitrust issues, you should contact the lawyer with whom you regularly deal. If that person does not have responsibility for giving antitrust advice, he or she will direct you to the appropriate attorney. If you do not have a regular contact in the Legal Division, consult one of the Divisional Vice Presidents, Domestic Legal Operations or the Divisional Vice President, International Operations, depending on the area in which you work.

Other Legal Division Services


The Legal Division also gives seminars on the antitrust laws that provide a general overview of the field or focus on a particular aspect of the laws which you may frequently encounter in your business. The Corporations attorneys will also attend trade association events, negotiations and other meetings that may involve antitrust issues.
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R eporting Violations
The Abbott Laboratories Code of Business Conduct contains policies and procedures for conducting the Corporations business in a legal and ethical manner. The Code also provides a procedure for reporting violations or possible violations of the Code. The Corporate Antitrust Policy described in this Handbook is part of the Code of Business Conduct. Therefore, you have the responsibility to report violations or possible violations of the Corporate Antitrust Policy in the manner described in the Code. Briefly, the Code requires you to report such incidents to your manager, another managerial employee, an employee relations representative, the General Counsel or any Corporate or Divisional Vice President in the Legal Division. You should review the Code itself for any other applicable procedures. You may obtain a copy of the Code from your Human Resources representative or from the Legal Division.

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A ppendix
In counseling clients, attorneys sometimes refer to the particular statute or section of the statute to which the conduct in question may relate. This Appendix outlines the coverage of the four main United States antitrust laws as they relate to the business practices discussed in this Handbook.

Sherman Act
The Sherman Act is the oldest of the antitrust laws. Section 1 of that Act prohibits restraints of trade resulting from conduct by two or more persons. It covers the activities described in the Handbook Section entitled Conduct with Competitors and in the first part of the Handbook Section relating to Conduct with Customers, Suppliers and Distributors. Section 2 of the Sherman Act covers unlawful monopolization and unlawful attempted monopolization and is treated in the Section of the Handbook entitled Independent Conduct.

Clayton Act
The Clayton Act covers some of the same conduct as does the Sherman Act. More specifically, Section 3 of the Clayton Actas well as Section 1 of the Sherman Actcover unlawful tying arrangements, exclusive dealing arrangements and requirements contracts. The first part of the Handbook Section relating to Conduct with Customers, Suppliers and Distributors describes these activities. Section 7 of the Clayton Act is one of the primary laws used to regulate or prohibit anticompetitive acquisitions.

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Robinson-Patman Act
The Robinson-Patman Act has a very specific focusunlawful differential pricing. The second part of the Handbook Section relating to Conduct with Customers, Suppliers and Distributors deals with Robinson-Patman Act concerns. The Robinson-Patman Act is actually Section 2 of the Clayton Act.

Federal Trade Commission Act


Section 5 of the Federal Trade Commission Act makes unfair methods of competition and unfair or deceptive acts or practices unlawful. In addition to the activities described in the Unfair Trade Practices Section of the Handbook, the FTC Acts Section 5 can, under the proper circumstances, cover most, if not all, of the anticompetitive activities described in this Handbook.

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991128 1999, Abbott Laboratories