Antitrust FAQs

Antitrust laws are crucial in protecting the integrity of free markets, preventing monopolistic behaviors, and fostering an environment where innovation and consumer choice thrive. Without them the balance in the marketplace could be disrupted, leading to higher prices and fewer options for consumers. The enforcement of antitrust laws ensures that businesses compete fairly, transparently and productively, which is crucial for economic growth and consumer welfare.

Without Antitrust laws, businesses would resort to illegal mergers and unlawful practices resulting in higher prices and fewer choices for consumers.  Over the past 100 years, the Antitrust laws have worked toward the same goal: to ensure fair and honest competition for the benefit of consumers.

The Antitrust laws consist of various statutes developed to regulate trade and commerce by preventing unlawful restraints, price-fixing, and monopolies. The main goal of these laws is to promote fair competition for the benefit of consumers.  The key Federal Antitrust law in the United States is the Sherman Act, enacted in 1890 as a “comprehensive charter of economic liberty aimed at preserving free and unfettered competition as the rule of trade.” In 1914, two additional Antitrust Acts were passed: the Federal Trade Commission Act and the Clayton Act.

These three Acts make up the core of the federal Antitrust laws:

• The Sherman Act prohibits “every contract, combination, or conspiracy in restraint of trade,” and any “monopolization, attempted monopolization, or conspiracy or combination to monopolize.” While not all restraints of trade are deemed unlawful, the Supreme Court made clear that only those that are unreasonable are actionable.
• The Clayton Act supplemented the Sherman Act addressing individual practices not covered in the Sherman Act, such as mergers and having competing companies share board members.
• The Federal Trade Commission Act established the Federal Trade Commission (FTC), which has the power to stop and prevent unfair competition and unfair or deceptive acts.

States have also enacted laws to fill the gaps where federal laws do not cover.  These laws are known as state “indirect purchaser antitrust statutes” and refer to laws enacted by individual states that allow consumers or businesses who purchase goods further down the supply chain (“indirect purchasers”) to sue for damages under state antitrust laws, even if they cannot sue under federal law due to the “Illinois Brick doctrine” which usually prevents indirect purchasers from bringing federal antitrust claims.  These state indirect purchaser statutes allow indirect purchasers to sue for damages for price-fixing or other anti-competitive conduct that occurred further down the supply chain.  For example, a retailer buys from the manufacturer and sells to consumers.  Under the Illinois Brick doctrine, only the retailer can sue the manufacturer for a federal antitrust violation.  However, under many state indirect purchaser statutes, consumers are given the right to sue the manufacturer for price fixing and other anti-competitive conduct.

The Federal Trade Commission and the Antitrust Division of the Department of Justice work together to enforce these laws. However, they also provide private individuals and companies to bring their own Antitrust cases. Under Section 4 of the Clayton Act (15 U.S.C. § 15(a)), the statue provides a private cause of action for suits brought pursuant to ‘the antitrust laws’, which includes Sections 1 or 2 of the Sherman Act (15 U.S.C. §§ 1, 2), Section 7 of the Clayton Act (15 U.S.C. § 18) and Section 2 of the Robinson Patman Act (15 U.S.C. § 13).  Further, many states’ Antitrust laws also provide for private causes of action.

Under Section 4 of the Clayton Act (15 U.S.C. § 15(a)), private plaintiffs can recover treble damages, or three times the amount of the plaintiffs’ damages, plus costs of suit, reasonable attorney’s fees and post-judgment interest.  Private plaintiffs may also receive non-monetary relief in the form of injunctions. Section 16 of the Clayton Act (15 U.S.C. § 26)