The core antitrust laws, the Sherman Act and the Clayton Act, were passed to combat the trusts or monopolies that dominated America’s free market economy in the late 1800s. For over a century, these antitrust laws have had the same basic objective: to protect the process of competition for the benefit of consumers, making sure there are strong incentives for businesses to operate efficiently, keep prices down, and keep quality high.
The Sherman Antitrust Act
The Sherman Antitrust Act was passed in 1890 and outlaws “every contract, combina¬tion, or conspiracy in restraint of trade,” and any “monopolization, attempted monopolization, or conspiracy or combination to monopolize.” The Sherman Act was the first Federal statute to limit cartels and monopolies, and today still forms the basis for most antitrust litigation brought by the federal government.
Violations of the Sherman Act include the following:
- Restraint of Trade: Acts or combinations that tend, or are designed, to eliminate or stifle competition, create a monopoly, artificially maintain prices, or otherwise hamper or obstruct the course of trade as it would be carried on if it were left to the control of natural economic forces. The Sherman Act does not prohibit every restraint of trade, only those that are deemed unreasonable.
- Price Fixing: The agreement to inhibit price competition by raising, depressing, fixing, or stabilizing prices.
- Market Allocation Schemes: Situations where competitors agree to not compete with each other in specific markets, by dividing up geographic areas, types of products, or types of customers.
- Boycotts: Boycotts may be anticompetitive and may violate the Sherman Act when they result in the elimination of competition or the reduction in the number of participants entering the market to compete with existing participants.
- Tying Arrangements: When a seller conditions the sale of one product on the purchase of another product.
- Monopolies: A monopoly is a form of market structure where only one or very few companies dominate the total sales of a particular product or service.
Antitrust Law Penalties for violating the Sherman Act can range from civil to criminal penalties. An individual violating these antitrust laws may be jailed for up to three years and fined up to $350,000 per violation, while corporations may be fined up to $10 million per violation.
The Clayton Act
The Clayton Act was passed in 1914 to reinforce the Sherman Act, and among other things, aims to prevent unlawful monopolies by requiring corporations to notify federal agencies of impending mergers and acquisition. The Clayton Act also prohibits anticompetitive conduct such as:
- Exclusive Dealings: Deals which require a buyer or seller to buy or sell all or most of a certain product from a single supplier such that competitors are unable to compete in the market.
- Price Discrimination: Selling similar goods to buyers at different prices.
- Tying & Bundling: selling a product or service on the condition that the buyer agrees to also buy a different product or service.
Both the U.S. Justice Departments Antitrust Division and the Federal Trade Commission enforce the Clayton Act. Under the Clayton Act, however, private parties may bring civil lawsuits against businesses that have violated competition laws. Awards in such lawsuits may include treble damages, as well as attorneys’ fees.
Whistleblower and Antitrust Attorneys
If you have evidence that a business has violated the Sherman Act or Clayton Act, our experienced and aggressive antitrust lawyers want to work with you to restore fairness to the marketplace. For a free and confidential evaluation of your antitrust lawsuit, please fill out our Free Consultation Form Online or call Toll Free at 1-888-252-0048.