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. The potential consequences are devastating: a single conviction can lead to prison time and hundreds of millions of dollars in fines.
However, 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. Fill out the form to the right or call us to schedule a free, no-obligation consultation today.
What Is an Antitrust Violation?
An antitrust violation is any breach of laws regarding the protection of trade and commerce. Common violations include price-fixing, restraints, price discrimination, and monopolization.
Antitrust violations are considered very serious, and as a result, the consequences for a conviction are quite severe.
For a free legal consultation with a antitrust violations lawyer serving Los Angeles, call (310) 928-9347
How Do Antitrust Laws Work?
Federal and state antitrust laws are designed to foster competition among businesses. Competition helps consumers because it means lower costs and new and superior products. Because of competition, companies 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 services.
There are three primary 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.
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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 commerce (including interstate trade within the U.S. or foreign dealings).
Companies can be accused of violating the Sherman Act when they work with competitors to set or control pricing. Examples of this include price-fixing, bid-rigging, and customer allocation.
Price fixing is 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 decide not to drop prices below a certain level. By doing this, they maximize their profits by taking advantage of consumers.
Bid rigging is when companies agree to submit bids that ensure a designated company will win the contract. Bid rigging often happens in connection with government contracts. There is typically a quid pro quo for the companies that do not win the contract.
Customer allocation is when companies agree to split up customers to reduce competition. By dividing customers, businesses don’t have to worry about improving their services to beat the competition. Essentially, everybody wins, except for the consumer.
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 Antitrust Act, a company must have taken 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.
What Does the Clayton Act Control?
The primary purpose of the Clayton Act is to restrict actions that could lead to the creation of a monopoly. The Clayton Act is designed to prevent mergers and acquisitions that are likely to decrease competition. The government uses the Clayton Act 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. Included are bans against:
- Forcing buyers and sellers to deal solely with a single company in the market
- Selling the same goods at varying prices depending on the buyer
- Agreements that require people or businesses to purchase one product or service before they can buy another
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How Does the Federal Trade Commission Act Work?
The Federal Trade Commission Act was designed to ban unethical methods of competition along with deceptive acts or practices. This law prohibits unfair competition in interstate commerce, but violations do not carry criminal penalties.
The Federal Trade Commission (FTC) is solely in charge of enforcing this act. While there is no risk of jail time under the Federal Trade Commission Act, a violation can still result in monetary penalties. Additionally, those charged under the Federal Trade Commission Act will likely face criminal charges under the Sherman Act.
Why Am I Being Charged with a Federal Offense Instead of a 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 Antitrust Act applies to “interstate commerce,” or business 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.
Are There Defenses Against an Antitrust Violation Charge?
Yes, there are several defenses that may be used against a charge of an antitrust violation. Experienced defense lawyers routinely win cases for their clients. The strongest argument relies on the language of the Sherman Antitrust Act itself.
Remember, to convict you of a Sherman Act violation, the prosecution needs to do more than 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 arrangement 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 Sherman Act can be sentenced with:
- Up to 10 years in federal prison
- Fines of up to $1 million for each offense
- Felony probation
The fines for a corporation, however, can be far greater, generally reaching as high as $100 million for each offense. In certain situations, additional fines may also be imposed.
Antitrust violations can also prevent a company from being allowed to bid on future government contracts. A criminal conviction 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. These include 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. We have a proven track record of getting positive results for our clients.
Fill out our online contact form or give us a call to schedule a free, no-obligation consultation with one of our Los Angeles antitrust violation lawyers today. We will review your case and advise you of all your legal options.