Antitrust (Price Fixing)

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Historically, antitrust laws exist to protect economic freedom by promoting competition in the marketplace. Violations occur when a company tries to create a monopoly, or several companies collaborate to control pricing.

Antitrust laws apply to virtually every sector of industry, including manufacturing, transportation, distribution and marketing. Antitrust laws enforce the competitive process by prohibiting practices such as price fixing, corporate mergers that reduct competition, rigging bids, and companies that seek monopolies.

Price fixing occurs when competing sellers agree on what prices to charge - i.e. agreeing to not sell below a certain price. Bid rigging happens when firms agree to bid such that a designated firm submits the winning bid. Customer allocation involves arrangements between competitors to split up customers, such as by geographic area, to reduce to eliminate competition.

Companies violating antitrust laws are subject to criminal suits that can lead to jail time and large fines. Or, a civil action can be filed asking the court to compensate for past violations, and forbidding further violations.

Individual violators can be fined up to $1 million and sentenced up to 10 years prison, and corporations can be fined up to $100 million for each offense.

Price fixing, bid rigging and customer allocation cause great harm to consumers and taxpayers by causing them to pay more for products and services, and by depriving them of the benefits of competition. Antitrust laws can save consumers billions of dollars in illegal overcharges by making sure people benefit from competitive pricing for the goods and services they purchase.

There are three major federal antitrust laws: the Sherman Antitrust Act, the Clayton Act and the Federal Trade Commission Act.

The Sherman Act (1890) outlaws all contracts, combinations and conspiracies that unreasonably restrain interstate and foreign trade, including fixing prices, rigging bids and allocating customers. The Sherman Act also makes it a crime to monopolize any part of interstate commerce. A monopoly occurs when one firm gains control of a market sector by supressing competition using illegal conduct.

The Clayton Act (1914) prohibits mergers or acquisitions that are likely to lessen competition and thereby increase prices to consumers. All persons considering a merger or acquisition above a certain size must notify the Antitrust Division and the Federal Trade Commission.

The Federal Trade Commission Act prohibits unfair methods of competition in interstate commerce.

Both the Clayton Act and the Federal Trade Commission Act carry no criminal penalties, and are tried as civil cases.

Cases of antitrust behavior have been tried against the soft drink, vitamin, trash hauling, road building, electrical contracting, fax paper, explosives, plumbing supplies, doors, carpet, bread and software industries. Private individuals who claim damages, can bring a suit against another individual, a corporation, or corporations - a very effective way to deter antitrust criminal activity.

Because price fixing, bid rigging and customer allocation are all secret behaviors, the antitrust agencies rely heavily on complaints received by consumers, or people in business.

Antitrust Articles

AMD Files Antitrust Suit against Intel
Advanced Micro Devices (AMD) filed an antitrust lawsuit against Intel Corp., causing stock shares for AMD to soar after news that the company may be close to changing and improving its manufacturing practices.

Antitrust Heat Rises on Microsoft Buyout of Yahoo
An extended and heated battle is raging for Microsoft to garner the ability to purchase Yahoo, the famous Internet search engine. Although US and European antitrust regulators are putting Microsoft in the hot seat, it is doubtable that they will be able to stop the merger from taking place. It's possible the fight for the merger may plod along for at least half the year.

Microsoft to Remain Under Court Scrutiny Until 2009
Microsoft has learned that antitrust sanctions imposed against them in 2002 will not end in December 2007 as originally planned. The US Department of Justice has ruled that Microsoft must abide by the antitrust sanctions until November 2009. Judge Colleen Kollar-Kotelly has made the determination that not enough documentation has been published by Microsoft for its software programming interface in order to resolve original complaints regarding the unfair advantages the company has over competitors in the development of Windows software.

Antitrust: Making Violators Cry Uncle
Rumours surrounding the long-alleged price fixing of petroleum products, which suggests a reason for today's high gas prices, was on everyone's mind May 15th during the national protest against the high cost of simply getting around. But such a grassroots consumer product that we all use brings home the issue of antitrust violations, and the potential it has on the overall prices we pay for goods and services.

Antitrust in the News

JAN-03-08: Apple faces an antitrust lawsuit alleging the company has an illegal monopoly on the digital music market. The lawsuit seeks class action status. [INFORMATION WEEK: ANTITRUST]

DEC-17-07: A man filed a lawsuit against Staples Inc and Hewlett-Packard Co. alleging the companies broke antitrust laws by collaborating on the sale of replacement ink-jet printer cartridges. The suit seeks class action status. [REUTERS: ANTITRUST]

OCT-9-07: A California man has filed a lawsuit against Apple claiming the company has violated antitrust laws by forcing iPhone users to use only AT&T as their cellular provider. [PC WORLD: ANTITRUST]

SEP-21-07: Satellite TV companies are being accused of conspiring to sell only "prepackaged tiers of bundled" services. An antitrust lawsuit has been filed against Comcast, Time Warner Cable, Cox, EchoStar and DirecTV for not offering programming a la carte. [BROADCAST NEWSROOM: ANTITRUST]

SEP-19-07: A U.S. District Court Judge has tossed out several antitrust charges brought by an Illinois real estate broker last Winter. The judge noted that the antitrust lawsuit did not include enough factual evidence to proceed. [INMAN REAL ESTATE NEWS: ANTITRUST]

SEP-17-07: Arizona's Daisy Mountain Fire District has filed a class action antitrust lawsuit against Microsoft. The suit alleges Microsoft engaged in "anticompetitive and monopolistic practices." [INFORMATION WEEK: ANTITRUST]

SEP-12-07: A federal appeals court has ordered a lower court to reconsider whether an antitrust lawsuit against underwriters can proceed as a class action. The lawsuit accuses investment banks of fixing fees at seven percent on initial public offerings. [TIMES: ANTITRUST]

SEP-05-07: A U.S. appeals court has revived most of a Broadcom Corp. antitrust lawsuit against Qualcomm Inc. The lawsuit alleges Qualcomm stifiled competition for chips that run mobile telephones by refusing to license its patents on fair terms. [TIMES: ANTITRUST]

SEP-03-07: An Iowa district court judge has approved Microsoft's proposed $179 million antitrust settlement with Iowa consumers. [WINDOWS IT PRO: ANTITRUST]

AUG-27-07: The state of Ohio has filed an antitrust lawsuit against Marsh & McLennan, AIG, and other insurers alleging the companies engaged in price fixing and other anti-competitive behavior. [REUTERS: ANTITRUST]

AUG-23-07: Several trucking companies face an antitrust lawsuit alleging that they colluded to fix shipping rates through fuel surcharges. The suit seeks class-action status. [STAR: ANTITRUST]

Antitrust Complaint

If you suspect an individual, a company or companies of price fixing or trying to create a monopoly, please click the link below to submit your complaint to a lawyer for a free evaluation.