September 24, 2017

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Antitrust Law

In the United States, antitrust law prohibits unfair anti-competitive business practices. This is a complicated area of law, and the advice of an Antitrust Attorney is recommended. View qualified Antitrust Law Firms in your area to find Antitrust Lawyers.

Anti-trust legislation came about due to the formation of business trusts which restrained trade and fixed prices in a particular industry through the creation of a monopoly (where one entity or group controls an entire industry). The trust itself was not typically a single business, but rather was made up of all of the leading businesses in that industry.

Sherman Act

The Sherman Antitrust Act of 1890 prohibits monopolistic activities. The Act makes a distinction between anti-competitive behavior of a single entity and that of multiple entities working in concert to control an industry.

With a single-firm monopoly, if there is no anti-competitive conduct, the monopoly is not prohibited. However, with a multi-firm monopoly, no showing of wrongful exclusion needs to be made for the law to be violated.

Common Monopolistic Acts

The following are some of the more well-known illegal trust actions:

  • Rigging bids – where the bidders agree as to which party will win it in advance
  • Price fixing – where the businesses in an industry agree as to the price for the service or product
  • Market allocation – where businesses agree not to compete within each other’s territory

Enforcement

The Federal Trade Commission (FTC) may bring a civil suit to enforce violations of federal antitrust laws. The U.S. Justice Department’s Antitrust Division (DOJ) may bring a suit either in civil or criminal court to enforce federal law. State attorneys general may bring suits to enforce state and federal anti-trust laws.

In addition, private individuals injured by trust activities may bring a civil suit under either federal or state laws. If successful, the plaintiff may be awarded three-times his/her actual damages; treble damage awards are a way of encouraging private citizens to report and prosecute federal anti-trust claims, which further polices the practice.

Market Concentration

To help prevent monopolies before they start, the DOJ and FTC must review proposed mergers. The process contains several steps including:

  • Potentially merging companies notify the FTC and DOJ of their intent
  • The agencies (FTC and DOJ) define the market
  • The agencies determine each company’s share of the market, and how control would be concentrated by the merger
  • Approval or denial of the merger

Exemptions

There are several types of entities that are exempt from anti-trust enforcement including:

  • Agricultural cooperatives
  • Major League Baseball
  • National Football League
  • Labor unions
  • Government-granted monopolies – such as utilities

Related areas:

Energy, Oil and Gas, Consumer Law, Mergers and Acquisitions, Business and Corporate Law