Antitrust laws are intended to prohibit collusive or otherwise anticompetitive business practices. However, navigating the murky waters of antitrust and competition law is by no means easy. Businesses must be constantly aware of the numerous antitrust violations. Lei Jiang Law Firm can help.
Lei Jiang Law Firm provides consultation, advisory opinions, and litigation practice relating to antitrust law. We can provide you with guidance as well as help you to implement safeguards and reduce risks. We have experience advising our clients on the complexities of proposed cross-border transactions (mergers, joint ventures), so as to prevent any antitrust violations. Please contact us if you have any questions in this area.
Our strong business experience, international reach, comprehensive approach to problem-solving, and dedication to our clients’ needs allows us to provide strong antitrust representation.
Why Should You Be Concerned with Antitrust Law?
It is natural for businesses to seek growth and expand market share and profit. To these ends, many of their strategies and actions are geared towards increasing efficiency and reducing costs. For example, there can be considerable gains from sharing industry knowledge, cooperating with competitors to tackle common challenges, obtaining competitors’ strategies and pricing practices, discovering the credit background of a customer, joining with other players to buy raw material and conducting research, or jointly producing goods or services, and many others. However, these valid justifications for greater cooperation notwithstanding, companies may inadvertently violate Antitrust Law.
Antitrust law has serious consequences for businesses, even small businesses, because of the severity of penalties for violations. It affects many business decisions, ranging from small ones (a simple buying decision) to large (mergers). Likewise, antitrust law has a considerable impact on ordinary consumers, even though most of them are not aware of such. These antitrust laws can save consumers million or even billions of dollars a year in illegal overcharges. Therefore, we think it is the best that everyone be acquainted with the basic principles of antitrust law, especially those involved in the business world (in any capacity!).
What is Antitrust Law?
Antitrust laws are state and federal laws created to promote fair competition and prevent monopolies. It applies to both businesses and individuals. Specifically, it prevents unlawful restraints, price-fixing, and monopolies. The center piece of American Antitrust Laws is the Sherman Act. The basic elements of an anti-trust violation under this Act are:
- Concerted activity by two or more actors (e.g., an agreement)
- An unreasonable restraint of trade, and
- An effect on interstate commerce.
Here are some conducts that might be considered by small businesses and could have Antitrust Law implication.
- Exchange of credit experiences and credit terms with competitors
- Participating in joint buying groups
- Trade associations as a source of information sharing
Enforcement of Antitrust Laws
Antitrust laws are enforced largely by two agencies, the Federal Trade Commission (FTC) and the U.S. Department of Justice’s Antitrust Division. Private parties may also bring civil suits. Violations are felonies and carry fines up to $10 million for corporations, and fines up to $350,000 and prison sentences of up to three years for persons. Moreover, both the government and individuals can collect triple damages they have suffered as a result of such conduct in an antitrust case.
As you can see, antitrust laws could have a major impact on business practices and the organizations of U.S. Please think carefully about your next business move and consult with an antitrust attorney such as Lei Jiang Law Firm, if necessary. For a consultation or other information regarding our antitrust practice, please contact us today.