1 The rule of reason standard states that

Multiple Choice

• horizontal restraints are legal under the Sherman Act.
• if two-sided markets are in effect, there is per se violation of the Sherman Act.
• a business will not be guilty of a Sherman Act violation if it can show that its actions were justified by economic conditions.
• if businesses are reasonably suspected of engaging in monopolistic practices, they are per se violators of antitrust law.

2 SharePeer (SP), an online music streaming service, is a platform for music sharing. SP had a policy against copyright infringement by members. SP also had the ability to locate and identify songs posted on its service that infringed upon copyrights. SP had a policy where they would terminate the membership of those users who violated copyrights. Thousands of songs were posted that did not violate copyrights. However, thousands of members of SP were violating the policies and infringing upon the copyrights of Big Music, a major recording label. SP had not taken actions to stop the infringement. If Big Music sues SP for infringement, what is the likely result?

Multiple Choice

• SP can be successfully for direct infringement.
• SP cannot be successfully sued because they have a policy against infringement and the platform they provided to customers was capable of substantial noninfringing uses.
• SP cannot be successfully sued because they only provided a platform for infringement, the company did not itself infringe upon copyrights, thus the only action for Big Music is against the violating members.
• SP can be successfully for indirect infringement.