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Federal law addresses antitrust violations by businesses

On Behalf of | May 2, 2019 | Business & Commercial Litigation

Federal antitrust laws were created to preserve fair competition in the marketplace across the nation, including right here in Tennessee. When there is open competition, prices of products will go down, higher quality goods and services will be offered, consumers will have more choices when it comes to purchasing goods or services and all-in-all there will be more innovation in the marketplace. In general, there are three laws that form the basis of antitrust regulation in the U.S.: The Sherman Act, the Federal Trade Commission Act and the Clayton Act.

Under the Sherman Act, businesses cannot fix prices, divide markets or do anything else that restrains trade or creates a monopoly. Under the Federal Trade Commission Act, businesses cannot undertake actions that could create unfair competition or would deceive consumers. The Federal Trade Commission is the entity that regulates federal antitrust rules. Finally, the Clayton Act covers certain business practices that are not addressed by the Sherman Act, such as having a single individual run two businesses that are in competition with one another.

These federal regulations provide a description of acts that constitute antitrust violations, but it is the courts that will ultimately decide on a case-by-case basis whether a business violated federal antitrust laws. If the FTC believes a business is violating antitrust laws, it will stop the businesses involved from continuing such practices or find some other way to resolve the issue administratively. Sometimes it is necessary to seek an injunction in federal court.

It is important to the health of the American marketplace that monopolies are not formed that impede fair trade. If a business is accused of committing antitrust violations, it could face litigation and administrative penalties. Therefore, it is important that businesses understand what types of business practices are unlawful, so that it can avoid such situations.