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Antitrust

1. Antitrust

Antitrust violations are crimes committed by business entities that injure both competing businesses and the consumer by artificially inflating or fixing prices.

Antitrust laws came into national prominence in the late nineteenth century with the rise of the giant industrial monopolies. Two types of monopolies, horizontal and vertical, were felt to be particularly harmful to competition. In a horizontal monopoly, a single entity owns all or an unreasonable percentage of the firms competing in the same business, such as all the telephone or oil companies. In a vertical monopoly, a single entity owns all or an unreasonable percentage of all levels of business within a single industry, for example, all the forests, logging firms, mills, printing plants, and newspapers.

Through the exercise of its power to regulate interstate commerce, Congress has enacted the most sweeping of antitrust regulations in the Sherman Antitrust Act. Because of the great size of the businesses engaged in antitrust or anti-competitive practices as well, the federal government has taken the lead in enforcing against these types of unfair business practices.

Most antitrust statutes are enforced in two ways: the state attorney general can sue on behalf of the state in order to correct the unfair practice, either by obtaining an injunction prohibiting the offensive practice or by ordering fines or other redress to be paid or otherwise addressed to the consumers; the other way is by a private right of action, whereby consumers themselves or competing businesses sue to recover for damages or injuries suffered as a result of the offending behavior. Some states permit civil charge only; some permit civil and criminal charges.

Table 1: Antitrust
StateCode SectionPrivate ActionStatutes of LimitationAttorneys Fees
FEDERALTit. 15 § 15(a-b); 15 USCA §4 deals with jurisdiction of courts, duty of US Attny & procedure to bring fed. claim; 15 USCA §21 deals with enforcement provisionsYes; a person who is a foreign state may not recover an amount in excess of damages, the cost of the suit, including a reasonable attorneys fee §15(a)+(b)4 yrs. 15 USCA§15bYes; a person who is a foreign state may not recover an amount in excess of damages, the cost of the suit, including a reasonable attorneys fee §15(a) and (b)
ALABAMA6-5-60YesNot specifiedNo
ALASKA45.50.562 to 596Yes; attorney general may also be able to bring an action 45.50.580, 45.50.5+64 yrs., 45.50.588Yes; restoration, injunction, treble damages, costs of suit; misdemeanor, civil penalty not more than $20,000 or 12 mos. prison, 45-50.576(a)
ARIZONA44-1401 to 1416 Uniform State Antitrust ActYes, 44-1408(A)4 yrs.; Private action must be brought within 4 yrs. of the cause of action or one years after the conclusion of a timely action of the state 44-1410(B)Yes, 44-1408(B)
ARKANSAS4-75-301, et seq. 45-75-304 through 307 were repealed by Act 2003 No. 1172 §3No prerequisite; it is the duty of the attorney general to enforce the status 4-75-3075 yrs., 4-75-322(1)Attorney general receives costs + attnys fees Act 1172 of 2003 §1
CALIFORNIABus. & Prof. §16700, et seq.Yes; attorney general may bring action on behalf of state 16750(a)+(c)4 yrs., 16750.1Yes, 16750(a)
COLORADOUnfair Practices Act, 6-2-101, etseq.; 6-4-101, et seq.Yes; attorney general may bring action on behalf of state 6-2-1116 yrs. for criminal actions brought by attorney general; 4 yrs. for civil actionsNo, 6-2-111; 6-4-114(3)
CONNECTICUTConnecticut Anti-Trust Act: 35-24, et seq.Yes; attorney general also enforces4 yrs.Yes
DELAWAREAnti-Trust Act: Tit. 6 §§2101, et seq.Yes; attorney general also enforces3 yrs.Yes
DISTRICT OF COLUMBIA28-4501, etseq.; 28-4511Yes; corporation counsel power to enforce4 yrs.Yes
FLORIDA542.15, etseq.Yes; attorney general also enforces1 yr. (plus period for attorney general action)Yes
StateCode SectionPrivate ActionStatutes of LimitationAttorneys Fees
GEORGIA13-8-31, etseq.Unfair competition, restraint of trade for distributors, dealers, and their representatives doing business in Georgia of farm equipment and/or machineryNot specifiedNot specified
HAWAII480-13, 20, 24Yes; attorney general shall enforce criminal and civil provisions4 yrs.Yes
IDAHOIdaho Competition Act: 48-101, et seq.Yes; attorney general also enforces4 yrs. or within one year after cause of action by state concludesYes
ILLINOISIllinois Antitrust Act: Ch. 740 §10/1, etseq.Yes4 yrs.Yes
INDIANA24-1-1-1, etseq.; 24-1-2-1, et seq.; 24-1-3-1, et seq.Yes; attorney general power to enforce5 yrs.Yes; treble damages, cost of suit
IOWAIowa Competition Law: 553.1, et seq.Yes; state may also bring suit4 yrs.Yes for individual plaintiff but not for state
KANSAS50-101, et seq.Yes; attorney general and county attorney power to enforce5 yrs.Yes
KENTUCKY367.175, etseq.Yes5 yrs. unless specified otherwiseNo
LOUISIANA51.121, etseq.Yes; attorney general also enforcesNot specifiedYes
MAINETit. 10 §§1101, et seq.Yes; attorney general power to enforceNot specifiedYes
MARYLANDMaryland Antitrust Act: Com. Law II §§11-201, et seq.Yes; attorney general power to enforce4 yrs.Yes
MASSACHUSETTSMassachusetts Antitrust Act: Ch. 93 §§1, et seq.Yes; attorney general also enforces4 yrs.Yes
MICHIGANMichigan Antitrust Reform Act: 445.771, et seq.Yes; attorney general also enforces4 yrs.Yes
MINNESOTAMinnesota Antitrust Law of 1971: 325D.49, etseq.Yes; attorney general also enforces4 yrs.Yes
MISSISSIPPI75-21-1, etseq.Yes; attorney general and district attorney per attorney general also enforce civil and criminal features of antitrust statutesNot specifiedNo
MISSOURIMissouri Antitrust Act: 416.011, etseq.Yes; attorney general also enforces4 yrs.Yes
StateCode SectionPrivate ActionStatutes of LimitationAttorneys Fees
MONTANA30-14-201, et seq.Yes; injured person or the attorney general; Dept. of Commerce power to enforceNot specifiedNot specified
NEBRASKA59-801, etseq.Yes; attorney general power to enforceNot specifiedYes
NEVADANevada Unfair Trade Practice Act: 598A.010, et seq.Yes; attorney general power to enforce4 yrs.Yes
NEW HAMPSHIRE356:1, et seq.Yes; Dept. of Justice power to enforce4 yrs.Yes
NEW JERSEYNew Jersey Antitrust Act: 56:9-1, etseq.Yes; attorney general power to institute proceedings4 yrs.Yes
NEW MEXICONew Mexico Antitrust Act: 57-1-1, et seq.Yes; attorney general power to enforce4 yrs. for civil penalty (57-1-12); 3 yrs. for criminal penalty (57-1-6); cannot bring both civil and criminal (57-1-9)Yes
NEW YORKGen. Bus. §3405., etseq.Yes; no prerequisite for administrative action but private party plaintiff must notify the attorney general4 yrs. (suspended during pendency of federal action based in whole or in part on same matter)Yes
NORTH CAROLINA75-1, et seq.Yes4 yrs.Yes
NORTH DAKOTA51-08.1-01, et seq.Yes; attorney general power to enforce4 yrs. or 1 yr. after conclusion of action by stateYes
OHIO1331:01, et seq.Yes; attorney general power to enforce4 yrs., 1331.12(B)No
OKLAHOMAOklahoma Antitrust Reform Act Tit. 79 §§201, et seq.Yes; attorney general power to enforce4 yrs.Yes
OREGON646.705, et seq.Yes; attorney general power to enforce4 yrs. or within 1 yr. after conclusion of any proceeding based on the same matterYes; individual and state win reasonable attorneys fees, experts fees, and investigative fees
PENNSYLVANIAUnfair Trade Practices & Consumer Protection Law: Tit. 73 §§201, et seq.Yes; attorney general power to enforceNot specifiedMay be awarded at judicial discretion but no statutory right
RHODE ISLANDRhode Island Antitrust Act: 6-36-1, et seq.Yes, but private party plaintiff must notify attorney general of his complaint and file proof of service4 yrs.Yes; treble damages, reasonable costs and attorneys fees
StateCode SectionPrivate ActionStatutes of LimitationAttorneys Fees
SOUTH CAROLINASouth Carolina Unfair Trade Practices Act: 39-5-10, et seq.Yes; attorney general power to enforce; however, 3 days before instituting legal proceedings, must give person chance to present reason why action should not be instituted3 yrs.Yes
SOUTH DAKOTA37-1-3.1, et seq.Yes; states attorney power to enforce and must immediately notify the attorney general; the attorney general shall aid in prosecution4 yrs. or 1 yr. after conclusion of civil or equitable action brought by state, whichever is laterYes
TENNESSEE47-25-101, et seq.Yes; attorney general and reporter power to institute criminal proceedingsNot specifiedNo
TEXASTexas Fair Enterprise & Antitrust Act of 1983: Bus. &Com. §§15.01, etseq.Yes; attorney general power to enforce4 yrs. or 1 yr. after conclusion of action based on the same actYes
UTAHUtah Antitrust Act: 76-10-911, et seq.Yes attorney general power to enforce4 yrs. or 1 yr. after conclusion of actionYes; and cost of suit
VERMONTTit. 9 §2465YesNot specifiedYes
VIRGINIAVirginia Antitrust Act: 59.1-9.1, etseq.Yes; attorney general power to enforce4 yrs. or 1 yr. after conclusion of actionYes
WASHINGTON19.86.010, etseq.Yes; attorney general power to enforce4 yrs., except when attorney general brings action in whole or in part; in matter of private action, the private actions statute of limitations is suspendedYes
WEST VIRGINIAWest Virginia Antitrust Act: 47-18-1, etseq.Yes; attorney general power to enforce4 yrs., unless one civil action is brought, then any other is suspended during the firsts pendency and one year afterYes; filing fees, and reasonable expenses of discovery and document reproduction
WISCONSIN133.01, etseq.Yes; dept. of justice or district attorney power to enforce6 yrs. Statute begins running upon discovery of a cause of action by an aggrieved party. Other actions have suspended statute of limitations during pendency of any civil or criminal action and for one year afterwardYes; and cost of suit
StateCode SectionPrivate ActionStatutes of LimitationAttorneys Fees
WYOMING40-4-101, etseq.Yes; attorney general and county attorney power to enforceNot specifiedNot specified

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Antitrust

Antitrust

BIBLIOGRAPHY

Antitrust lawalso called competition law limits how competitors may act in the marketplace, unilaterally and especially collectively. The aim of antitrust law is to promote social welfare by protecting the competitive process. Two federal agencies are responsible for U.S. antitrust enforcementthe U.S. Department of Justice and the Federal Trade Commission. In addition, state attorneys general and private parties may bring antitrust suits to enjoin specific conduct or recover damages suffered as a result of antitrust violations.

One major antitrust law is the Sherman Act of 1890. It was the congressional response to the invention of the trust, a contractual coordination among competitors used to drive up prices. The U.S. Supreme Court developed two frameworks for applying Section 1 of the Sherman Act, which addresses anticompetitive agreements, including those forming trusts. The per se rule prohibits categories of agreements without consideration of their actual effects because they are inherently likely to eliminate competition without any offsetting social benefits. The most important of these categories are cartel agreements through which competitors fix prices, rig bids, or allocate customers. Cartels are prosecuted as felonies, and prosecution of international cartels since the mid-1990s resulted in many fines in excess of $100 million and imprisonment for many corporate executives. The rule of reason prohibits agreements in other categories if determined actually to harm competition.

Section 2 of the Sherman Act addresses unilateral conduct that would monopolize an industry. It has been applied sparingly, especially in recent decades. Landmark early cases resulted in the breakup of the American Tobacco Company and the Standard Oil Company. The most notable modern case involved Microsoft Corporation and resulted in a variety of prohibitions and requirements on its conduct.

The other major antitrust law is the Clayton Act of 1914, which contains several specific prohibitions, the most important of which applies to mergers that would substantially lessen competition. Since the 1970s, large mergers have been reviewed by federal agencies prior to consummation. The agencies file suit against roughly a dozen mergers per year, although all but a few are later consummated after the merging parties agree to divest significant assets. Controversial cases include the Justice Departments unsuccessful challenge to Oracle Corporations takeover of PeopleSoft, and oil industry mergers the Federal Trade Commission allowed to proceed.

Antitrust law and policy have evolved considerably, especially as insights from economics were incorporated through case law development. At the vanguard was the Chicago School, which drew attention to efficiency reasons for business practices and was instrumental in limiting the application of the per se rule. Since the early 1980s, increasingly sophisticated economic analysis has been applied. The federal agencies and the courts rely on economic analysis in predicting the competitive effects of proposed mergers and assessing the effects of ongoing business practices.

Antitrust law was unique to the United States for a considerable time, but more than one hundred countries now have antitrust laws. These laws generally prohibit cartel activity, anticompetitive mergers, various specific business practices, and what is termed abuse of dominance. The prohibition of abuse of dominance is similar to Section 2 of the Sherman Act. International views on antitrust have converged a great deal, although complete convergence likely never will be achieved.

Outside cartel enforcement, debates on antitrust policy continue. Nearly all agree on basic goals of antitrust policy, but the best means to achieve those goals remain controversial. Recent debates have focused mainly on the proper standards for evaluating the potentially exclusionary conduct of a single competitor. Controversial practices include 3Ms use of rebates across multiple product lines in sales to retailers (found unlawful in the United States) and Microsofts inclusion of its media player in its Windows PC operating system (found unlawful in Europe).

SEE ALSO Antitrust Regulation; Chicago School; Deregulation

BIBLIOGRAPHY

Bork, Robert H. 1993. The Antitrust Paradox: A Policy at War with Itself. 2nd ed. New York: Free Press.

Carlton, Dennis W., and Jeffrey M. Perloff. 2005. Modern Industrial Organization. 4th ed. Boston: Addison Wesley.

Connor, John M. 2001. Global Price Fixing: Our Customers Are the Enemy. Boston: Kluwer.

Hovenkamp, Herbert. 2005. The Antitrust Enterprise: Principle and Execution. Cambridge, MA: Harvard University Press.

Hylton, Keith N. 2003. Antitrust Law: Economic Theory and Common Law Evolution. Cambridge, U.K.: Cambridge University Press.

Kwoka, John E., Jr., and Lawrence J. White, eds. 2004. The Antitrust Revolution: Economics, Competition, and Policy. 4th ed. New York: Oxford University Press.

Posner, Richard A. 2001. Antitrust Law. 2nd ed. Chicago: University of Chicago Press.

Shenefield, John H., and Irwin M. Stelzer. 2001. The Antitrust Laws: A Primer. 4th ed. Washington, DC: AEI Press.

Gregory J. Werden

The views expressed herein are not purported to represent those of the U.S. Department of Justice.

Luke M. Froeb

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antitrust

an·ti·trust / ˌantēˈtrəst; ˌantī-/ • adj. of or relating to legislation preventing or controlling trusts or other monopolies.

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