You may never have heard of antitrust laws before being charged with a federal antitrust violation. The U.S. government has become more proactive in enforcing these laws in recent years, and a conviction can lead to prison time and hundreds of millions of dollars in fines. The potential consequences are devastating, but a good federal defense attorney can help you avoid them. You need to talk to a Los Angeles antitrust violations lawyer.
At the Simmrin Law Group, we have a hand-picked team of attorneys who have spent years fighting for the rights of people charged with antitrust violations and other serious federal crimes. We draw on vast experience and resources to go head-to-head with federal prosecutors. Let us give you a free consultation to talk about your case and explain your rights. Fill out the form to the right or call us at 310-997-4688 and get your free consultation today.
How do antitrust laws work?
Federal and state antitrust laws are designed to foster competition among businesses. Competition helps consumers because it means lower prices and new and superior products. Because of competition, businesses are motivated to improve their products and services, lower their prices, and become more efficient. When one company has a monopoly or companies get together to fix prices, it is hard for other businesses to compete. Consumers then face higher prices and poorer service.
There are three main federal antitrust laws:
- The Sherman Antitrust Act
- The Clayton Act
- The Federal Trade Commission Act
Of the three, the Sherman Act is the only one that carries criminal penalties, as discussed in detail below.
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What is the Sherman Antitrust Act?
The Sherman Antitrust Act is the main law under which antitrust violations are prosecuted. Under this law:
- It is illegal…
- To have “a contract, a combination or a conspiracy”…
- That unreasonably restrains trade (including interstate trade within the U.S. or foreign trade).
Companies can be accused of violating the Act when they work together with competitors to set or control pricing. Examples of this include:
- Price fixing, when competing companies agree on the price they will charge for the goods or services they sell. They might agree to increase prices by a particular amount, or they might agree that they will not drop prices below a certain amount.
- Bid rigging, when companies agree that they will submit bids that ensure that a designated company will submit the winning bid. Bid rigging often happens in connection with government contracts.
- Customer allocation, when companies agree to split up customers to reduce competition.
The Sherman act also makes it illegal to have a monopoly over any aspect of interstate commerce. A monopoly exists when one company controls the market for a particular good or service. To violate the Sherman act, a company must have gotten its control by suppressing the competition. There is no violation if a company dominates the market through ordinary competition, because its product or service is better than competitors’ or its prices are lower.
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How do the Clayton Act and the Federal Trade Commission Act work?
The Clayton Act is designed to prevent mergers and acquisitions that are likely to decrease competition. The government uses this Act as a way to challenge mergers that it believes will increase prices for consumers. The act also prohibits an array of other business practices that might harm competition.
The Federal Trade Commission Act prohibits unfair competition in interstate commerce, but violations do not carry criminal penalties. The Federal Trade Commission is in charge of enforcing this act.
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Why am I being charged with a federal offense instead of a California state crime?
Like many states, California also has a set of laws designed to prohibit unfair trade practices and unfair competition. These laws generally prohibit unfair competition and similar anti-competitive activities within the State of California.
In contrast, the federal Sherman Act applies to “interstate commerce,” or business that is transacted across state lines or between people in different states. Interstate commerce is regulated by the federal government under the Commerce Clause of the U.S. Constitution. If you were charged with a federal violation instead of a state violation, it is probably because the activities you are accused of were not confined solely to California.
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Are there defenses to an antitrust violation?
Yes—and skilled defense lawyers routinely win cases for their clients.
The strongest defense relies on the language of the Sherman Act itself. Remember, to convict you of a Sherman Act violation, the prosecution needs to do more than just prove you stifled the competition and made money. They need to prove that you made an agreement with competitors, whether that agreement involves price fixing, bid rigging or some other anti-competitive activity.
This means that most defenses are based on a lack of agreement—if you did not have an agreement with your competitors, you cannot have violated the act.
What are the penalties for an antitrust violation?
Sherman Act violations that involve agreements between competitors are usually punished as felonies.
An individual convicted of violating the Act can be sentenced with:
- Up to 10 years in federal prison
- Fines of up to $1 million for each offense
A corporation can be fined up to $100 million for each offense. In some cases, fines can be even higher.
Antitrust violations can also prevent a company from being allowed to bid on future government contracts, and they can be used as evidence in civil cases related to the same conduct.
Be aware that in some cases, the Department of Justice may use other laws to fight anti-competitive activities, including mail and wire fraud laws, conspiracy laws, and laws against perjury and obstruction of justice. Violations of these laws carry their own penalties, in addition to any penalties for Sherman Act violations.
Talk to a Los Angeles Antitrust Violations Lawyer for Free
Don’t risk the future of your family, yourself, or your business. At the Simmrin Law Group, we understand how to fight antitrust cases—and we get results. Let us give you a FREE consultation. Fill out the form to the right or call us at 310-997-4688 and get your free consultation today.