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Antitrust law seeks to prevent monopolies and encourage competition. Insider agreements and collusions between companies that stifle innovation, competition, and free trade are generally illegal.
If you or your business suffered financial harm due to other businesses conspiring to lessen competition, you could have a case. Morgan & Morgan’s antitrust lawyers do not shy away from standing up to powerful corporations abusing their power to gain an advantage.
If you wonder what antitrust lawyers do and how they could help you get justice, get in touch with us today. Contact us for a free case review to find out if you could take legal action and recover damages.
Common Antitrust Law Violations
Most antitrust violations are committed by companies seeking to hinder free competition. Some of the most common cases of antitrust violations involve:
Price-Fixing
Price-fixing is generally used to describe an agreement between businesses, manufacturers, retailers, or wholesalers, to fix or raise prices. According to the Federal Trade Commission (FTC), price-fixing agreements can be written, verbal, or inferred.
Consumers usually benefit when there is healthy competition between companies. When competitors fix prices, agreeing to charge the same or a similar price for a product or service, they engage in unfair competition. Price-fixing also typically results in higher prices for consumers. Price-fixing does not only concern the actual price of a product or service and can also include agreements regarding:
- Shipping and handling fees
- Terms of warranties
- Financing rates
- Discounts and sales
- Production amounts or capacities
Why Is Price-Fixing Illegal?
Price-fixing leads to overcharging customers, reduces incentives for innovation, and can create monopolies. According to antitrust laws, companies should generally establish prices and other terms independently from each other, based on supply and demand. While not all types of price-fixing are illegal, a plain agreement between competing companies to fix prices is generally unlawful.
Bid-Rigging
Bid-rigging describes illegal coordination among bidders for business contracts. Bid-rigging typically arises when companies agree on who will be the winner of a specific contract beforehand. This practice destroys the fair and competitive bidding process. Bid-rigging can take many different forms, such as:
- Agreeing in advance which company will win the bid
- Intentionally submitting high bids
- Companies agreeing not to bid
- Businesses agreeing to take turns in being the lowest bidder
- Subcontracting to a company that lost the bid
- Submitting a single bid as a joint venture
Bid-rigging can occur when bids are invited for construction projects, government procurement contracts, and in other circumstances. According to the U.S. Department of Justice, most forms of bid-rigging schemes revolve around an agreement that predetermines the winning bidder and suppresses competition between the colluding businesses.
Monopolization
Monopolization refers to the unlawful effort by a business in a leading market position to control the market and restrain competition. Antitrust laws seek to prevent companies from establishing monopolies.
Having a leading market position in itself is not enough to have a monopolization case against a company. A harmed individual or business would also have to prove that the monopoly was established through unlawful conduct.
Market Division or Customer Allocation
Unlawful market division and customer allocation involve agreements between companies to divide their territories or customer base. These types of agreements are designed to eliminate competition. Our antitrust lawyers can represent your business if you suffered financial disadvantage due to others engaging in market division or customer allocation.
Group Boycotts
An illegal group boycott can arise when two or more entities collude to restrict one or several competitors from competing. Group boycotts tend to occur when a new and potentially innovative competitor is seeking to get established in a certain market. Current competitors can engage in group boycott activity to try and prevent the new company from getting established. It is important to note that group boycott activity must be commercially motivated to be subject to antitrust liability.
Mergers and Acquisitions
Mergers and acquisitions can be regular and lawful occurrences in the business world. However, when a merger or an acquisition creates a monopoly or drastically reduces competition, it is generally unlawful. Mergers can result in lower-quality services or goods, less innovation, and, importantly, lead to much higher prices for consumers. Antitrust law, specifically 15 U.S. Code § 18 (Section 7 of the Clayton Act), prohibits mergers and acquisitions that create monopolies or minimize competition.
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