usa antitrust laws

8/13/2019 Usa Antitrust Laws

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USA ANTITRUST LAWS

The antitrust laws derive from the commerce clause of the US Constitution and are set forth in

various federal and state statutes. The federal statutes address interstate commerce, while the

state ones address intrastate commerce within the state. Owing to a very expansive interpretation

of the term "interstate commerce," virtually any significant commercial transaction can be said to

affect "interstate commerce" and therefore be deemed subject to federal antitrust regulation.

Even so, some practitioners prefer for various reasons to plead their antitrust claims in state

court, even when so doing means overlooking significant aspects of the case. The state statutes

and case law incorporate the federal standards, so that in most instances it is not possible to

litigate an antitrust case in state court without having a thorough grasp of federal antitrust law.

SIGNIFICANT ANTITRUST LEGISLATIONS IN THE USA

Here is a brief summary of the principal federal statutes, followed by general comments on the

state statutes, nearly all of which are expressly modeled after the Sherman Act:

The Sherman Act5

This statute is the premier article of federal law. It is the original, principal, and foremost

antitrust statute in the United States, setting forth the broad statutory proscriptions that act as a

"charter of the marketplace" and "constitution of competition law" in American jurisprudence.

The Sherman Act in its current form provides both civil remedies and criminal penalties for the

principal antitrust violations --conspiracies to restrain trade, monopolization, attempted

monopolization, and conspiracies to monopolize.

The Sherman Act is worded in broad, open-ended language, so that clever competitors cannot

elude its provisions by lawyerly evasions and

2.1. USA ANTITRUST LAWS

The antitrust laws derive from the commerce clause of the US Constitution and are set forth in

various federal and state statutes. The federal statutes address interstate commerce, while the

state ones address intrastate commerce within the state. Owing to a very expansive interpretation

of the term "interstate commerce," virtually any significant commercial transaction can be said to

affect "interstate commerce" and therefore be deemed subject to federal antitrust regulation.

Even so, some practitioners prefer for various reasons to plead their antitrust claims in state


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court, even when so doing means overlooking significant aspects of the case. The state statutes

and case law incorporate the federal standards, so that in most instances it is not possible to

litigate an antitrust case in state court without having a thorough grasp of federal antitrust law.

2.2. SIGNIFICANT ANTITRUST LEGISLATIONS IN THE USA

Here is a brief summary of the principal federal statutes, followed by general comments on the

state statutes, nearly all of which are expressly modeled after the Sherman Act:

The Sherman Act5

. This statute is the premier article of federal law. It is the original,

principal, and foremost antitrust statute in the United States, setting forth the broad

statutory proscriptions that act as a "charter of the marketplace" and "constitution of

competition law" in American jurisprudence. The Sherman Act in its current form

provides both civil remedies and criminal penalties for the principal antitrust violations --

conspiracies to restrain trade, monopolization, attempted monopolization, and

conspiracies to monopolize.

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The Sherman Act is worded in broad, open-ended language,

so that clever competitors cannot elude its provisions by lawyerly evasions and

Sherman Act, the Clayton Act, and the Robinson-Patman Act. Significantly, Section 5 of

the FTC Act confers additional authority on the FTC, allowing it to test the limits of

antitrust policy. An aggrieved firm that concludes that it has no civil remedy under the

Sherman Act or Clayton Act might decide that its best recourse is to complain to the

FTC, asking that it invoke its authority under Section 5 of the FTC Act in order to

investigate the matter and initiate administrative proceedings in order to enjoin the

challenged conduct.


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The Hart-Scott-Rodino Act10

. This federal statute imposes disclosure requirements for

certain kinds of mergers, acquisitions, and other fusions of two or more business

operations. The duty to make a disclosure depends on the size of the transaction and the

size of the participating companies. If a firm wishes to conduct a transaction that is

covered by this Act, it must first make prescribed disclosures to the FTC and Department

of Justice-Antitrust Division.

The State Statutes. In addition to the federal statutes, each state in the United States has

its own antitrust statutes. These statutes, which govern intrastate commerce, typically

incorporate the statutory proscriptions and case law interpretations of the Sherman Act,

which remains the statute of reference and premier article of antitrust legislation in the

United States.

2.3. ENFORCEMENT AGENCIES11

The Federal Government

The U.S. Department of Justice (DOJ) Antitrust Division enforces the federal antitrust laws.

Final decisions issued by the DOJ may be appealed to a U.S. Court of Appeals and, ultimately, to

the U.S. Supreme Court. If the DOJ's position is upheld, it may, in certain circumstances, seek

consumer redress in court. If the company violates a DOJ order, the Anti-trust division may also

seek civil penalties or an injunction.

Only the DOJ can obtain criminal sanctions. The DOJ also has sole antitrust jurisdiction in

certain industries, such as telecommunications, banks, railroads, and airlines. DOJ often work

with other regulatory agencies to provide support for their competitive analysis.

States


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State attorneys general can play an important role in antitrust enforcement on matters of

particular concern to local businesses or consumers. They may bring federal antitrust suits on

behalf of individuals residing within their states ("parens patriae" suits), or on behalf of the state

as a purchaser. The state attorney general also may bring an action to enforce the state's own

antitrust laws.

Private Parties

Private parties can also bring suits to enforce the antitrust laws. In fact, most antitrust suits are

brought by businesses and individuals seeking damages for violations of the Sherman or Clayton

Act. Private parties can also seek court orders preventing anticompetitive conduct (injunctive

relief) or bring suits under state antitrust laws. Individuals and businesses cannot sue under the

FTC Act.

Issues of International Jurisdiction

U.S. and foreign competition authorities may cooperate in investigating cross-border conduct

that has an impact on U.S. consumers12. In addition, as more U.S. companies and consumers do

business overseas, federal antitrust work often involves cooperating with international authorities

around the world to promote sound competition policy approaches. There are now more than 100

foreign competition agencies13

.

2.4 CARTEL ENFORCEMENT IN THE USA

The cartel prohibition is statutory (Sherman Act 1). Federal law, along with most state statutes,

provides for both criminal and civil sanctions, and applies to both individuals and corporations.

Section 1 of the Sherman Act prohibits: Every contract, combination, in the form of trust or

otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with

foreign nations. Criminal prosecutions under the statute are focused on hard core antitrust


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violations, e.g., price-fixing, bid rigging, and market allocation.

2.4.1 Cartel Prohibition Enforcers

The Antitrust Division of the United States Department of Justice (Anti-trust Division) is the

principal government enforcer of the criminal aspects of the law. The Assistant Attorney General

(nominated by the President and confirmed by the Senate) leads the Division, delegating

supervision of criminal enforcement matters to the career Deputy Assistant Attorney General and

his subordinate, the Director of Criminal Enforcement. Investigations are conducted through the

Divisions National Criminal Enforcement Section in Washington, D.C. and seven regional field

offices. The Divisions criminal trial attorneys work with a range of law enforcement

professionals, including agents from the Federal Bureau of Investigation, state law enforcement

officers, U.S. Attorneys offices, and foreign authorities in international cases.

OBJECTIVES OF US ANTITRUST LAW

Anti trust laws in the United States make illegal all contracts, combinations,and conspiracies which are deemed to be in restraint of trade A court willexamine all the facts and circumstances surrounding any particular conductin question in order to ascertain whether the contract or combination violatesthe the law by restraining trade unreasonably.

The antitrust laws are enforced by the Antitrust Division of the Department ofJustice and the Bureau of Competition of the Federal Trade Commission, aswell as by private suits for treble damages instituted by persons or firmsinjured by antitrust violations.

A company or person found liable of an antitrust violation in a civil suit broughtby a private plaintiff may be forced to pay up to three times the actualdamages suffered by the plaintiff, as well as all of the plaintiff's costs oflitigation and attorney's fees.


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And finally, absent some sort of blatant violation,the courts will apply a ruleof reason analysis to evaluate standard-setting activities. Since productstandards offer a host of procompetitive effects, these benefits weigh heavilyin the judicial balance.

The Federal Trade Commission has prepared and made available various guidelines for businessapplicable to activity of standards setting organizations.

Antitrust Guidelinesfor the Licensing of Intellectual Property

Antitrust guidelines for Collaboration among competitors issued jointly by the FTC and US

Department of Justice

ANTITRUST ENFORCEMENT GUIDELINES FOR INTERNATIONAL OPERATIONS

ISSUED BY THE U.S. DEPARTMENT OF JUSTICE AND THE FEDERAL TRADE

COMMISSION

The courts have elaborated certain practices that also apply to standardssetting procedures.

No matter what the procedure or how much due process the standard-settingbody affords a complaining party, if the standard is anticompetitive it is not

justified by the reasonableness of the procedure used to implement it.

Competitors cannot use standards to facilitate otherwise anticompetitiveactivities. Wrapping otherwise anticompetitive acts in the clothing of a productstandard cannot justify the restraint.

Standards that restrain trade, even if the standard-setting body has legitimatereasons for the restraint. Even a standard designed to achieve a sociallydesirable objective cannot do so through anticompetitive means.

Competitor manipulation of product standards may lead to antitrust liabilityeven for the standard-setting body.

Standard-setting bodies cannot enforce product standards throughanticompetitive means.
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