Antitrust laws apply to almost every industry and all levels of businesses. These laws prohibit practices that restrict trade, such as price-fixing conspiracies, predatory acts designed to achieve or maintain a monopoly, and corporate mergers that would effectively reduce competition or result in a monopoly within a particular market or industry.
The underlying purpose of antitrust law is to protect economic freedom and opportunity by promoting competition in the marketplace. Open competition allows businesses to compete on a level playing field based on quality and price, in turn ensuring that consumers have access to a vast array of well-priced, quality products. Mehri & Skalet, PLLC seeks to ensure a free and fair market, and recover money for consumers that have been harmed by anticompetitive practices.
View our Current Cases: Apple Digital Music and Rail Freight.
How Do Antitrust Violators Cheat Consumers?
Any activity that causes something you buy to be more expensive than it would be in a truly competitive market may be an antitrust violation. Some of the most common methods by which antitrust violators cheat consumers include:
Price-Fixing: Two or more competing sellers will agree on what price to charge, usually by agreeing not to charge below a certain price for an item or by agreeing to increase prices by a certain amount.
Customer-Allocation Agreements: Two or more competing companies will agree to divide customers, usually by geographic area, to prevent competition for the same group of customers.
Monopolization: The sole supplier of a good or service engages in behavior that prevents competition, and allows it to charge prices higher than it could charge in a competitive market.
Price-fixing, bid-rigging and customer allocation agreements can and often do result in higher prices, reduced supply, and lower quality. The companies engaging in such practices are aware of the illegal nature of their activities, and keep such agreements secret from the public. From outward appearances, the companies acting in collusion appear to be competitors.
What Laws Protect Against Antitrust Practices?
Antitrust practices are against the law and are subject to criminal and civil enforcement. There are three major federal antitrust laws: the Sherman Antitrust Act, the Clayton Act, and the Federal Trade Commission Act.
Enacted in 1890, the Sherman Act makes it unlawful to conspire or contract to restrict trade or monopolize interstate commerce. This includes bid-rigging, price-fixing, and allocation of customers. An unlawful monopoly exists when one firm controls the marketplace for a particular good or service, not because of a superior product or service, but as a result of suppressing competition through anti-competitive conduct.
Agreements between competitors in violation of the Sherman Act are often punishable as felonies prosecuted by the Department of Justice. For offenses committed on or after June 22, 2004, individual violators can be fined up to $1 million and be sentenced for up to ten years in federal prison per offense. Corporate offenders may be fined up to $100 million for each offense. In addition, private plaintiffs who purchased directly from a violator may recover treble damages under the statute.
The Clayton Act is a civil statute that does not impose any jail time for violations, but does carry civil penalties or fines. Originally enacted in 1914, and amended in 1950, the Clayton Act prohibits mergers or acquisitions that are likely to lessen competition and thereby increase prices for consumers. The Clayton Act also prohibits certain other business practices that could harm competition.
The Federal Trade Commission Act prohibits unfair methods of competition in interstate commerce, and provides for the creation of the Federal Trade Commission, which polices violations of the Act. The Act does not carry any criminal penalties.
Most states also have their own antitrust laws that closely parallel the federal antitrust laws, and also allow suits by “indirect purchasers” – that is, those who purchased the product. These laws apply to violations taking place wholly within that state.
When Should You Suspect an Antitrust Violation?
It is difficult to detect antitrust violations. Many or most antitrust violations are only revealed after a governmental investigation. But you may be in a position to suspect that anticompetitive behavior has occurred.
Possible signs of price-fixing include:
The price of something going up, or not going down, despite the fact that demand is decreasing, or supply is increasing.
Any evidence that two or more competing sellers of similar products have agreed to price their products a certain way, or to increase the price of their products.
Possible signs of customer allocation agreements:
Suspicious statements from a seller suggesting only one company can sell to a particular customer.
Any evidence that two or more competing sellers have agreed to sell only in certain areas or to certain customers.
What Should You Do if You Suspect an Antitrust Violation?
Because price fixing and customer allocation agreements are secretive in nature, these conspiracies are often difficult to detect and prove. Law enforcement officials therefore rely on competitors and consumers to alert them to potential antitrust violations.
Effective antitrust enforcement requires the support and cooperation of consumers. If you feel that you have been the victim of an antitrust violation, you should contact an experienced attorney to protect your rights and advise you of your options. Antitrust litigation is a complex area of law that requires extensive experience in the prosecution of these matters. The attorneys at Mehri & Skalet, PLLC have brought antitrust class action lawsuits against some of the largest corporations in the world and have won restitution for consumers and businesses who have been wronged by violations of antitrust laws.
What are Some Examples of Litigation Involving Antitrust Violations?
Mehri & Skalet, PLLC has extensive experience in consumer class action complaints involving antitrust violations. Currently, the firm represents plaintiffs in the following matters:
Chocolate: Mehri & Skalet filed suit against the largest manufacturers of chocolate, including Cadbury, Hershey, Mars and Nestle, alleging a conspiracy to fix chocolate prices in the worldwide market.
Rail Freight: Mehri & Skalet represents a lumber company in a proposed class action lawsuit alleging defendant rail transportation companies conspired to fix their prices under the guise of a fuel surcharge.
iPod Digital Music: Mehri & Skalet has filed a class action complaint on behalf of iPod purchasers, alleging Apple has altered music and video files purchased from iTunes, rendering these files playable only on an iPod. Music purchased from other music stores cannot be played on the iPod, thus providing a monopoly on digital music players and online music by forcing consumers to purchase Apple products and services.
Energy Transfer Partners: Mehri & Skalet is counsel to a natural gas trader in a commodities manipulation case against Energy Transfer Partners, L.P.(“ETP”), alleging ETP exploited its position as the dominant trader at the Houston Ship Channel to manipulate the price of natural gas and natural gas futures contracts, in violation of the Commodity Exchange Act.
Importance of the Role of Class Representatives in Antitrust Class Action Lawsuits
A class action lawsuit is a lawsuit brought by an individual, a group of individuals or a company on behalf of a much larger group with the same legal claim. A class action is appropriate where many people have been injured in the same manner, and it is too expensive or impractical to bring an individual lawsuit. Class action lawsuits are based on the idea that there is strength in numbers, and thus a smaller “representative” group can pursue an action on behalf of a much larger group who have been similarly injured.
The class representative is someone who believes that he or she has been wronged, and is willing to seek relief for that injury on behalf of others who are similarly situated. Class representatives, under the guidance and assistance of their attorneys, will periodically be called upon to assist in the class action lawsuit, by answering questions in depositions, providing background information relevant to the case, and making decisions on behalf of the class with the advice of their lawyers. Class representatives understand that they have a duty to represent the class, and can only obtain relief for their injury on the same grounds that they obtain for the class. However, courts may enter an order incentive awards to the class representatives in a successful case, to compensate them for their time and contribution to the class action lawsuit. But there is no guarantee that class representatives will receive such an award.
If you believe that you have suffered losses due to fraudulent activity, please contact us regarding your potential claims.