Antitrust law is a branch of law that encourages competition between companies and prevents monopolies. When companies work together to stifle competition, free trade, and innovation, their actions are typically seen as illegal.
If one has ever wondered what an antitrust lawyer does and how they help people get justice, read a knockout post on the most common violations in the field of antitrust law.
How Do Companies Break Antitrust Laws?
Most offenses are committed by organizations looking for ways to stifle competition, with the most common violations being those listed in the sections below.
When businesses, wholesalers, sellers, and manufacturers agree to raise or fix prices, it’s illegal. Price fixing doesn’t just eliminate competition, it also makes prices higher for consumers. It can come in the form of:
Excessive processing, shipping, and handling charges
Unfair warranty terms
Steep discounts and sales that make it impossible for other companies to remain competitive (also known as predatory pricing)
Increasing production capacity and pricing smaller companies out of the market
Price fixing is illegal because it reduces companies’ incentive to innovate, and it may lead to monopolies. According to U.S. antitrust law, companies must establish terms and pricing based on market conditions, not collaboration with one another.
In this form of antitrust activity, bidders coordinate with one another when vying for business contracts. Bid rigging usually happens when companies decide who will receive a contract before it is put up for auction, and the practice destroys the integrity of the bidding process. It may take several forms, including:
Deciding who will win ahead of time
Submitting very high bids with no intention of following through
Agreeing not to place a bid
Subcontracting to losing bidders
Rigging may occur when bids are requested for government purchase contracts, construction projects, and in other cases. According to realtimecampaign.com, most bid rigging schemes focus on agreements that suppress competition and preselect a winner.
Monopolization is a business’s unlawful effort to inhibit competition and maintain control over the market. Thankfully, antitrust laws work to prevent the establishment of monopolies. Being a market leader isn’t enough to be convicted of monopolization, as those suffering losses must prove that the company’s conduct is illegal.
Illegal customer allocation and market division schemes involve cooperation between companies that have divided their territories or customer bases. These agreements have only one purpose: to reduce or eliminate competition. An antitrust attorney from Sidley Austin will represent business owners who have suffered financial losses because of unfair customer allocation practices.
Mergers and acquisitions or M&A are, for the most part, lawful events. However, when a corporate merger or buy-out reduces competition or leads to a monopoly, it is illegal. Mergers sometimes result in a reduction in quality, decreased innovation, and higher consumer prices. If one wonders how to become an antitrust lawyer, one will need to read up on mergers, acquisitions, and monopolies.
These are the most common antitrust law violations, and there are others to consider. By becoming an antitrust attorney, one will do their part to fight against monopolization and keep the business world fair for all.