Antitrust and Trade Regulation

Businesses growing and merging with or taking over other companies may need to be aware of federal antitrust laws. Government agencies investigate and enforce competition laws to ensure an open market. This protects consumers by encouraging lower prices, higher quality, and more options.

When a business tries to take advantage of the market to increase efficiencies or profits, it can run into antitrust problems. If your small business wants a merger or acquisition, get legal advice from an antitrust lawyer.

What Are Antitrust and Trade Regulations?

Antitrust and trade regulations are government laws that restrict unfair business practices. These include unfair competition and deceptive business practices. Antitrust and trade regulations promote competition and limit unfair monopolies. These compliance programs affect many types of businesses and can affect:

• Consumer protection
• Advertising
• International trade
• Mergers and acquisitions
• Intellectual property

Under antitrust regulations, the federal government can stop private companies from merging. Or it can break up larger companies into separate entities. There are civil penalties for antitrust and trade violations. Violating antitrust laws can also lead to criminal penalties.

Federal Antitrust Laws

The federal government regulates certain business practices that allow unfair competition and price-fixing. The major federal antitrust laws include:

• The Sherman Antitrust Act
• The Clayton Act
• The Federal Trade Commission Act

The Sherman Act restricts collusion in business, price fixing, and cartels that harm fair trade practices. The Clayton Act applies to mergers and acquisitions where the result would harm competition. The Sherman Act and Clayton Act both restrict monopolization. The Federal Trade Commission (FTC) Act created the FTC.

What Are Some Antitrust Tactics?

Businesses may need to coordinate with other competitors to modernize, address inefficiencies, or expand into foreign markets. But there are several ways competitors can also work to reduce competition. Many of these market manipulations are antitrust violations, including:

• Price fixing: Price fixing is an agreement between competitors to set prices (higher, lower, or stabilized) to restrict competition. This removes the fair market flexibility where consumers enjoy lower prices for higher quality products. Price-fixing agreements can be antitrust violations.
• Bid rigging: Many business contracts depend on getting competitive bids. Bid rigging is when competing bidders coordinate to reduce competition. Bid rigging can be an illegal antitrust scheme.
• Group boycotts: Companies can boycott working with certain companies. But when competitors agree to boycott targeted businesses, it could be an illegal group boycott under antitrust laws.
• Customer allocation: When competitors are vying for the same customers and working in the same markets, they compete, which benefits consumers. But an agreement between competitors for customer allocation or market division may be illegal.

Which Agencies Regulate Trade and Antitrust Laws?

The FTC can file lawsuits against businesses for antitrust violations. The FTC can impose civil penalties to prevent unfair methods of competition. The FTC can also prohibit mergers or acquisitions and force the breakup of monopolies in violation of antitrust laws.

The U.S. Department of Justice (DOJ) Antitrust Division can file civil or criminal complaints for trade and antitrust violations. Criminal penalties can include fines, asset seizure, and prison time.

State governments can also investigate and enforce state antitrust laws for state-based antitrust violations.

How Can a Merger or Acquisition Trigger Antitrust Laws?

A horizontal merger combines two or more competing businesses that can reduce market competition. A vertical merger combines two or more companies in a buyer-seller relationship (like eBay merging with PayPal).

When companies merge or acquire other businesses, it can trigger antitrust issues. Antitrust laws prohibit mergers and acquisitions that lessen competition or tend to create a monopoly.

The parties may need to file a premerger notification and wait for government approval. This depends on the merger or acquisition size. The FTC or DOJ may investigate the merger or ask for more information.

The FTC or DOJ can let the deal go forward, stop the merger, or negotiate with the parties for a consent order with measures that protect competition. If the parties disagree with the government’s decision, they can proceed with antitrust litigation.

Can a Lawyer Help With Antitrust Compliance?

Antitrust compliance and preparation can help avoid costly litigation. When companies engage in a merger or acquisition, any delays can cost a lot of money. When the government reviews a premerger notification, the companies want to get approval as quickly as possible. Antitrust counseling and compliance beforehand can help avoid unnecessary delays.

An experienced antitrust compliance attorney can help with licensing, intellectual property, distribution, joint ventures, and mergers and acquisitions. Contact an antitrust attorney for legal advice for your small business.

Speak to an Experienced Antitrust Attorney Today

This article is intended to be helpful and informative. But even common legal matters can become complex and stressful. A qualified antitrust lawyer can address your particular legal needs, explain the law, and represent you in court. Take the first step now and contact a local antitrust attorney to discuss your specific legal situation.