White Collar Crime: Anti-Trust Violations

A person or corporation can be accused of anti-trust offense violations by either a state or the federal government, or by a lawsuit brought by an individual or a group of individuals (known as a class action lawsuit).  A state has jurisdiction when the alleged violations only are within the state’s borders, but a state’s attorney general can enforce both federal and state antitrust laws.   Antitrust laws are meant to protect competition in the marketplace.

According to the Department of Justice (DOJ), many consumers have never heard of antitrust laws, but when these laws are effectively and responsibly enforced, they can save consumers millions and even billions of dollars a year in illegal overcharges. In fact, the DOJ files dozens of complaints against companies, organizations and individuals every year for violations of one or more of the antitrust laws.

Unfair business practices can happen in any industry or trade. The most common violations involve acts of price fixing and bid rigging and are thus the primary target of the Antitrust Division of the DOJ.  Over recent years alone, the DOJ has won price fixing and bid rigging convictions in the soft drink, motion picture, trash-hauling, road-building, electrical contracting and dozens of other industries.

Main Anti-Trust Laws

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

Sherman Anti-Trust Act

The Sherman Antitrust Act was passed in 1890 and has since stood as the key law regarding competition in the free market. It outlaws “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.”

Clayton Act and FTC Act

First passed in 1914, the Clayton Act was revised in 1950. The Clayton Act is a major civil statute intended to protect competition and to keep prices from skyrocketing due to mergers, acquisitions, or other business practices, especially monopolistic practices.

Some of the possible charges that a person or corporation may face include: price-fixing or bid rigging, perjury, obstruction of justice, allocating consumers between businesses, making false statements to the government, mail fraud, and conspiracy.   Such violations constitute felonies and they may be punished with heavy fines or prison time. Individuals may be required to pay up to $350,000 or have to spend up to three years in prison. Corporations can be forced to pay up to $10,000,000.  Since the Clayton Act and the Federal Trade Commission Act are civil statutes, those convicted of violating these laws do not receive prison time. Instead, they may be forced to pay fines and damages.

Anti-Trust Enforcement

Antitrust laws are enforced by government agencies as well as by private individuals who bring lawsuits, often class action in nature. The DOJ plays an important investigative and enforcement role in criminal antitrust cases. The DOJ sometimes works with other agencies, such as the FBI, to gather the evidence it needs to prosecute violators of antitrust laws.  Private individuals who have been harmed by Clayton Act violations may be eligible to receive an amount triple their actual losses in addition to winning compensation for court and attorney fees.

Proving Anti-Trust Violations

To prove a criminal violation, the government must establish four elements: (1) a combination or conspiracy formed by two or more entities; (2) an unreasonable restraint of trade or commerce by the combination or conspiracy; (3) the interstate nature of the restrained trade or commerce; and (4) general intent.

The law does not condemn all agreements between companies, only those that threaten to raise prices to consumers or to deprive them of new and better products. Since bid rigging and price fixing schemes involve conspiracies, the companies involved try hard to keep them secret. As a result, the DOJ relies heavily on reports from consumers and competitors

However, some groups and activities are exempt from antitrust laws: these include labor unions, public utilities, hospitals, public transit and water systems, and suppliers of military equipment.

Because antitrust litigation is complex, specialized legal knowledge should be sought by anyone accused of what is considered a “white crime” and the expert services of an experienced antitrust attorney should be obtained.