Antitrust Violations – Federal Crimes & Consequences
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UPDATED: Oct 10, 2012
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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.