Antitrust Violations – Federal Crimes & Consequences

UPDATED: Jul 12, 2023Fact Checked

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Jeffrey Johnson

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Jul 12, 2023

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UPDATED: Jul 12, 2023Fact Checked

Antitrust violations are behaviors that violate United States antitrust laws, which were designed to prevent behavior that stifles business competition and eliminate unfair business practices. These laws, which were developed in response to the growth of big business at the end of the 19th century, are associated with tenets of consumer protection and the open market.

Notable United States antitrust laws include the Sherman Antitrust Act (15 U.S.C. §1-7), which outlawed conspiracies that restrain interstate or foreign commerce, and the Clayton Antitrust Act (15 U.S.C. § 12-27), which outlawed monopolies and anti-competitive agreements. However, some groups and activities are exempt from antitrust laws: these include labor unions, public utilities, hospitals, public transit and water systems, and suppliers of military equipment.

Antitrust crimes can include predatory pricing (in which a firm sets an extremely low price for their product in order to prevent new suppliers from entering the market or drive their competitors out of business), tying (in which the purchase of one product is conditional on the sale of another), and price fixing (in which competitors make agreements regarding the pricing of their products).

In the United States, the Federal Trade Commission and the Antitrust Division of the Department of Justice regulate and enforce antitrust legislation. State attorneys general can enforce both federal and state antitrust laws. Penalties for antitrust violations range from minor fines to maximum criminal penalties of ten years’ imprisonment and a $1 million fine for individuals. However, some violators of antitrust laws do not face criminal prosecution. Rather, they face proceedings in civil court under the “rule of reason” standard, which attempts to determine the possible worthiness of anti-competitive conduct. This does not apply to bid rigging, price fixing, or market allocation schemes, which have been deemed “per se” illegal by the United States Supreme Court.

Case Studies: Antitrust Violations in the Tech, Retail, and Pharmaceutical Industries

Case Study 1: Price Fixing in the Tech Industry

John, Sarah, and Mark, executives at prominent tech companies, conspired to fix product prices. Their illegal agreement eliminated competition and forced consumers to pay inflated prices.

Case Study 2: Predatory Pricing in the Retail Sector

A dominant retail chain, led by Mark, engaged in predatory pricing tactics. By selling products below cost, they pushed smaller competitors, including Sarah’s business, out of the market.

Case Study 3: Tying Arrangements in the Pharmaceutical Industry

In this case, John, an executive at a pharmaceutical company, imposed tying arrangements. Doctors, including Sarah, had to purchase a primary product to gain access to a critical secondary product, giving John’s company an unfair advantage.

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Jeffrey Johnson

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

Insurance Lawyer

Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.

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