The goal of antitrust law is to promote competition, which is widely considered to be a good thing for the economy. When businesses are in competition with one another, it drives innovation and allows for the best products and services to rise to the top. This benefits consumers by giving them more choices and better prices. In recent years, there has been a lot of interest among lawmakers in breaking up big companies that have come to monopolize various industries. This will help ensure that our economy remains efficient and benefits consumers as much as possible.
Antitrust law governs the conduct of businesses by prohibiting certain business practices that tend to create monopolistic and oligopolistic concentrations of commercial power. There are antitrust laws at both the federal and state levels. The primary goal of antitrust law is to promote competition among businesses. Competition ensures that the free market is efficient and with efficiency, comes a whole host of benefits to consumers, such as material progress, lower prices, better goods and services, and more employment opportunities.
Antitrust laws protect against price-fixing, bid-rigging, monopolies, oligopolies, conspiracies to restrain trade such as by geographic segmentation of customers. All of these mentioned acts distort and weaken the free market.
Antitrust law started in English common law and became statutory in the US in 1890 with the Sherman Antitrust Act. Congress enacted the Sherman Antitrust Act and subsequent Antitrust laws, like the Clayton Antitrust Act of 1914, to not only promote commercial activity but to also ensure that no one business or group of businesses become so powerful so as to threaten democracy in America.
The Sherman Act is the most well-known of the antitrust laws. It prohibits monopolization, attempted monopolization, and agreements or conspiracies to monopolize. The Clayton Act complements the Sherman Act by prohibiting a number of other anticompetitive practices, including anticompetitive mergers, exclusive dealing contracts, and interlocking directorates. It also prohibits price discrimination where it may substantially lessen competition or tend to create a monopoly.
The two US federal agencies responsible for antitrust enforcement are the Federal Trade Commission (also known as the 'FTC') and the Department of Justice's ('DOJ') Antitrust Division.
The Federal Trade Commission (FTC) is an independent agency that enforces the antitrust laws through administrative adjudication, merger review, and civil and criminal enforcement actions. The FTC also has a broad mandate to protect consumers from unfair or deceptive practices. The Department of Justice (DOJ) is responsible for coordinating and supervising all civil and criminal enforcement actions brought under the antitrust laws. The DOJ enforces the antitrust laws through both civil and criminal litigation. The DOJ also has a broad mandate to protect consumers from anticompetitive mergers and other business practices.
State attorneys general have concurrent authority with the DOJ to enforce the federal antitrust laws. In addition, many states have their own antitrust laws that state attorneys general can enforce.
The penalties for violating the antitrust laws can be severe. Civil penalties include injunctions against further anticompetitive conduct and the disgorgement of ill-gotten gains. Criminal penalties may include fines and imprisonment.
Private parties who are injured by anticompetitive conduct may bring suit under the federal antitrust laws to recover damages. These suits are known as "private actions." Private actions play an important role in antitrust enforcement by providing a mechanism for private parties to enforce the antitrust laws and to deter future anticompetitive conduct.
In the second half of the twentieth-century, antitrust law enforcement shifted towards prohibiting mergers and business concentrations that threaten to raise consumer prices. The test for whether the FTC or DOJ would intervene to prevent a merger of companies became whether the merger would raise consumer prices.
Congress recently enacted the Criminal Antitrust Anti-Retaliation Act, also known as CAARA. The law prohibits retaliation against whistleblowers who report criminal antitrust violations to their employer or the government. It also protects those who cooperate with the government in an antitrust investigation against an alleged wrongdoer.
Under CAARA, employers may not discharge, demote, suspend, threaten, harass, or in any other manner discriminate against those who, in good faith, blow the whistle on alleged criminal antitrust violations. OSHA administers CAARA. This is the 24th whistleblower statute that OSHA administers.
While at the moment, there is no antitrust whistleblower rewards program, interest has grown in recent years to enact one. In February 2021, Senator Amy Klobuchar introduced the Competition and Antitrust Law Enforcement Reform Act, also known as CALERA. This bill has not yet been passed by Congress and the President.
If it does pass, it would provide whistleblowers who blow the whistle on criminal antitrust violations a reward of up to 30% if their information leads to a successful government prosecution and recovery of monies.
Offering whistleblowers rewards is integral to incentivizing those with information about criminal antitrust violations to come forward. After the S.E.C. and C.F.T.C. implemented whistleblower rewards programs in 2011, whistleblower tips to the respective agencies skyrocketed.
There is intense interest among lawmakers to break up big companies that have come to monopolize and distort our free market. In the near foreseeable future, it is likely that an antitrust whistleblower rewards law will, in some form, become law.
The hope is that such a law will incentivize people with inside knowledge of illegal antitrust activity to come forward, leading to more investigations and ultimately to a more competitive marketplace. This would help to level the playing field and protect the integrity of our free market.