These attorneys deal with competition issues related to organic growth and acquisition under national laws.
When a business or an individual is involved in litigation surrounding competitive practices and issues, they will likely retain an antitrust lawyer; similarly, anyone suing a business in these cases may also have an antitrust lawyer. Often, these cases have very high stakes and can be very contentious or high profile, and thus they require an extremely nuanced understanding of the law as well as business practices, including products and services, how they are made and sold, and how firms compete and collaborate.
There are five basic practices that make up antitrust law: litigation and appeals, mergers and joint ventures, market conduct counseling and compliance, civil and criminal investigations, and regulatory and political advocacy.
The first antitrust law was the Sherman Act, passed by Congress in 1890. This act is a “comprehensive charter of economic liberty aimed at preserving free and unfettered competition as the tule of the trade.” In 1914, two additional laws were passed: the Federal Trade Commission Act, which established the FTC as an agency, and the Clayton Act. These form the three primary laws still in effect today. The basic objective is to protect the process of competition for the benefit of consumers, ensuring strong incentives for businesses to keep prices down and quality up.
The Sherman Act explicitly outlaws any “contract, combination, or conspiracy in restraint of trade” and any “monopolization, attempted monopolization, or conspiracy or combination to monopolize.” The Supreme Court has since said that this only applies to “unreasonable” restraints of trade. This may include arrangements among competing parties to fix prices or divide markets. Under the Sherman Act, these actions are “per se,” meaning no defense or justification is allowed.
Penalties for violating the Sherman Act can be severe. Most cases fall under civil suits, but it can be enforced as a criminal law under the Department of Justice. Criminal prosecutions usually require intentional and clear violations, but when this happens, penalties can reach $100 million for corporations and $1 million for individuals, along with ten years in prison. Federal law allows these fines to be doubled to twice the amount conspirators gained or victims lost if this exceeds $100 million.
The Federal Trade Commission Act bans “unfair methods of competition” and “unfair or deceptive acts or practices.” The Supreme Court has decided that any violation of the Sherman Act also automatically violates the FTC Act, meaning the same types of cases can be brought under both. The FTC Act also extends beyond this. All violations of this act are tried by the Federal Trade Commission, the agency established to oversee this law.
The Clayton Act addresses specific cases that the Sherman Act does not clearly prohibit, such as mergers and interlocking directorates (when the same person makes business decisions for competing companies.) Section 7 of the Clayton Act is prohibitive of mergers or acquisitions that have an effect which “may be substantially to lessen competition, or tent to create a monopoly.
In 1936, the Robinson-Patman Act was used to amend the Clayton Act to ban discriminatory prices, services, and allowances in dealings between merchants. The 1976 Hart-Scott-Rodino Antitrust Improvements act further amended it to require companies planning large mergers or acquisitions to notify the government in advance.
The Clayton Act also authorizes private parties to sue for triple damages when they have been harmed by violations of the Sherman or Clayton Act, as well as to obtain court orders that prohibit the practice in the future. This act does not allow for criminal penalties but has financial penalties related to the damage created by the legal behavior.
In addition to these federal statutes, each state may have additional antitrust laws. Georgia’s Fair Business Practices Act includes several provisions, primarily focusing on real estate transactions and complementing the federal laws. In addition, the Uniform Deceptive Trade Practices Act can be invoked for antitrust violations where real estate is involved.
Under Georgia law, a private lawsuit can be filed against a party for an alleged violation of antitrust law at the same time that federal action is pending. The state usually allows the aggrieved party to file suit for fraud.
Antitrust law can have hundreds of applications, but below are some of the most common instances in which a person may retain an antitrust lawyer outside of contracts and merger planning.
To learn more about how an antitrust lawyer at Lowther Walker, LLC can help you in your defense, contact us today.