Antitrust is an area of law that promotes competition between companies and prevents monopolies. When companies work together to stifle competition, free trade and innovation, their actions are usually viewed as illegal.
If you’ve ever wondered what an antitrust attorney does and how they bring justice to people, read an amazing post on the most common antitrust violations.
How do companies break antitrust laws?
Most violations are committed by organizations looking for ways to suppress competition, with the most common violations being those listed in the following sections.
pricing
When companies, wholesalers, sellers and manufacturers agree to raise or fix prices, it is illegal. Price maintenance not only eliminates competition but also increases prices for consumers. It can come in the form of:
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Excessive handling, shipping and handling fees
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Unfair guarantee conditions
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Steep discounts and sales that make it impossible for other businesses to remain competitive (aka predatory pricing)
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Increase production capacity and drive smaller companies out of the market
Price fixing is illegal because it reduces companies’ incentives to innovate, and it can lead to monopolies. Under US antitrust laws, companies must set terms and prices based on market conditions and cannot cooperate.
manipulate bids
In this form of antitrust activity, the bidders coordinate business contracts in competition. Bid rigging typically occurs when companies decide who gets a contract before it is auctioned, and this practice destroys the integrity of the bidding process. It can take several forms including:
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Deciding who wins in advance
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Bidding very high with no intention of getting through
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Agree not to bid
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Subcontracting to unsuccessful bidders
Manipulation can occur when soliciting bids for government purchase contracts, construction projects, and in other cases. According to realtimecampaign.com, most bid-rigging focuses on agreements that suppress competition and preselect a winner.
establishment of monopolies
Monopoly is a company’s unlawful attempt to inhibit competition and maintain control of the market. Fortunately, antitrust laws prevent monopolies from forming. Being a market leader is not enough to be convicted of monopolization, because those who suffer losses must prove that the company’s behavior is illegal.
customer assignment
Illegal customer allocation and market sharing schemes involve collaboration between companies that have divided their territories or customer bases. These agreements have only one purpose: to restrict or eliminate competition. A Sidley Austin antitrust attorney represents business owners who have suffered financial losses as a result of unfair customer allocation practices.
Mergers & Acquisitions
Mergers and acquisitions, or M&A, are mostly legitimate events. However, if a corporate merger or acquisition reduces competition or creates a monopoly, it is illegal. Mergers sometimes result in a loss of quality, less innovation and higher consumer prices. If you’re wondering how to become an antitrust attorney, you need to educate yourself about mergers, acquisitions, and monopolies.
These are the most common antitrust violations, and there are others to consider. As an antitrust attorney, you do your part to fight monopoly and keep business fair for all.
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