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Practice Definitions  | Antitrust & Trade Regulation

Antitrust & Trade Regulation

Trusts and monopolies are concentrations of wealth in the hands of a few. When a few competitors agree to fix prices, rig bids or divide up customers, consumers lose the benefits of competition. To prevent trusts from creating restraints on trade or commerce and reducing competition, most states and the federal government have antitrust laws that apply to virtually all industries and to every level of business, including manufacturing, transportation, distribution and marketing. The main federal antitrust laws passed by Congress are: the Sherman Antitrust Act, the Clayton Act, the Wilson Act, Robinson-Patman Act, and the Federal Trade Commission Act.

The Sherman Act:

The Sherman Antitrust Act was passed on July 2, 1890 as the principal law expressing national commitment to a free market economy in which competition free from private and governmental restraints leads to the best results for consumers. The Act outlaws all contracts, combinations and conspiracies that unreasonably restrain interstate and foreign trade. This includes agreements among competitors to fix prices, rig bids and divide up customers. The Sherman Act also makes it a crime to monopolize any part of interstate commerce. An unlawful monopoly exists when only one firm controls the market for a product or service by suppressing its competition rather than taking sales from less efficient competitors by means of legitimate competition and lower prices.

The Department of Justice alone is empowered to bring felony criminal prosecutions under the Sherman Act. Individual violators can be fined up to $350,000 and sentenced to up to 3 years in federal prison for each offense. Corporations can be fined up to $10 million for each offense. Under some circumstances, the fines can go even higher. To secure a conviction of antitrust violations, an Assistant United States Attorney (AUSA) must present evidence that when submitted to a jury or judge would prove beyond a reasonable doubt that the defendant entered into a contract or conspired with others to restrict trade, suppress competition or fix prices, and that this action substantially affected interstate or foreign commerce.

The Clayton Act:

The Clayton Act is a civil statute that carries no criminal penalties. It was passed in 1914 and was significantly amended in 1950. The Clayton Act prohibits mergers or acquisitions that are likely to lessen competition. Under the Act, the government can challenge any merger that a careful economic analysis indicates is likely to increase prices to consumers. The Act also prohibits other business practices, which under certain circumstances may harm competition. All persons considering a merger or acquisition above a certain size must notify both the Antitrust Division and the Federal Trade Commission.

The Federal Trade Commission Act:

The Federal Trade Commission Act prohibits unfair methods of competition in interstate commerce, but carries no criminal penalties. The Federal Trade Commission is responsible for policing violations of the Act.

Most if not all states have comparable statutes prohibiting monopolistic conduct, price fixing agreements, and other acts in restraint of trade having strictly local impact. Various other regulations regarding unfair competition are also enforced on federal and state levels.
Should I hire a lawyer?
Whether or not you are currently in litigation, counsel and representation from a lawyer can save you a lot of money and problems down the road. For example, you may find it beneficial to seek legal counsel on compliance with anti-trust and trade regulation compliance. Use the State Lawyers Directory to find a qualified anti-trust and trade regulation attorney that can best serve your needs in your situation.
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