Antitrust laws seek to protect consumers and businesses from anti-competitive business practices, such as through monopolies or business practices undertaken by two or more businesses to restrain or suppress competition. The goal of antitrust laws is to encourage companies to make better products and offer them at lower prices to benefit consumers.
There are four main antitrust laws:
The Sherman Antitrust Act – It is considered the key law regarding free market competition. It outlaws “every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several states, or with foreign nations.”
The Clayton Act – This civil statute protects against monopolistic practices and preserves competition and consumer prices from unfairly rising due to mergers, acquisitions and other similar business practices.
The Federal Trade Commission Act – This act established the Federal Trade Commission, which governs interstate commerce and attempts to maintain healthy competition.
The Robinson-Patman Act – This act deals mostly with prices charged by competing businesses for products that are similar or have similar quality. It protects small businesses by limiting large businesses from creating discriminatory discounts through their purchasing power.
Antitrust lawyers may be called upon to defend companies against violations of these laws, or to aggressively challenge companies that engage in practices that may be perceived as violations. These violations commonly include bid rigging, price fixing, and manipulating consumers between businesses.
Violations of the Sherman Antitrust Act may be punished with prison and significant fines. Corporations may have to pay fines of up to $10 million.
The Clayton Act and Federal Trade Commission Act are civil statutes, and convictions under either of those will not result in prison time, but violating parties could be forced to pay heavy fines and damages.
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