Concerted Refusal to Deal Lawyers

Antitrust law is a broad category of federal and state laws regulating business enterprises to promote competition. Monopolistic business practices are curtailed by antitrust law. As a result, consumers have a reasonable amount of choice in the marketplace for products and services.

What Is an Antitrust Violation?

Antitrust laws can be violated in several ways by a business enterprise. As part of their investigation of antitrust violations, the courts apply the standard of “per se violations.” The only thing that needs to be proven in court is that the party accused of antitrust violations actually committed one of several “per se violations.” Both the accused’s intent and the effects of their actions are irrelevant.

The following are some of the more common and well-known antitrust violations:

• Price-fixing;
• Lockup agreements;
• Concerted refusals to deal;
• Mergers in which the major and only competitor is dissolved.

What Do State Antitrust Laws Do?

There are antitrust laws in many states. They are similar to federal antitrust laws, allowing private parties to sue companies that engage in anti-competitive behavior.

The antitrust laws of the states and the federal government are conceptually similar, but the specific provisions vary widely from one state to another. The language of some state antitrust laws is substantially similar to that of federal antitrust laws, for example. Certain sections of federal antitrust laws are incorporated into state laws in other states. Specific prohibited acts may be defined, and some may even cover new areas.

State antitrust laws often cover a wider range of prohibited conduct than federal ones. State courts interpret state antitrust laws often, but not always, in accordance with federal antitrust laws.

The Three Main Federal Antitrust Acts

Federal antitrust law is composed of three main bodies of law. The Antitrust Division of the Justice Department and the Federal Trade Commission enforced these three federal acts. States also have their own antitrust laws, which they enforce. Certain laws allow private parties to file lawsuits claiming anti-competitive business practices to enforce antitrust laws.

Federal antitrust law is composed of three main acts:

• Sherman Antitrust Act of 1890: The Sherman Act prohibits contracts and conspiracies that restrain trade and promote monopolization. Under the Sherman Antitrust Act, agreements among competitors to fix prices, rig bids, and allocate customers are prohibited.
  • Criminal felonies can be charged for these acts. The court may impose fines or even prison terms on those convicted. A court may also issue an order restraining future violations. Sherman Act provisions are mostly enforced by the Antitrust Division of the Justice Department;
• Clayton Act of 1914: The Clayton Act deals with specific types of illegal restraints, including exclusive dealing arrangements, tie-in sales, price discrimination, mergers and acquisitions, and interlocking directorates. Violations of the Clayton Act lead to civil penalties only. The Federal Trade Commission and the Antitrust Division of the Department of Justice enforce the Clayton Act. Private parties can also sue in federal court for damages and to prevent future violations under the Act;
• Federal Trade Commission Act: The Federal Trade Commission Act is enforced solely by the Federal Trade Commission (FTC). This act includes all the prohibitions of other antitrust laws, which are viewed as a catch-all. Other, more explicit regulatory statutes also contain provisions that close loopholes.

What Is a Concerted Refusal to Deal?

A concerted refusal to deal is an agreement between competing companies or between a company and an individual or business not to do business with each other. A refusal to deal violates the Sherman Antitrust Act and other antitrust laws and is illegal in the United States.

Competitor attempts to boycott, refuse to deal with or coerce a vendor, payer, or another third party.

Concerted refusals to deal fall into two categories:

• Horizontal: Made between competitors, not to compete among themselves
• Vertical: Attempts to leverage market power through exclusive dealing with certain parties

Types of Refusal to Deal Agreements

A horizontal refusal to deal is an agreement between competitors not to compete; a vertical refusal to deal is an attempt to control or leverage the market. It does not mean that a business cannot refuse to do business with another company in the future. Choosing whom to do business with is a matter of discretion for businesses. They will likely break the law if this choice is made through a conspiracy with another competitor, business, or individual.

Refusing to deal violates antitrust laws because it cuts off a boycotted business from a facility, supply, or market. By harming the boycotted business in this way, the competing businesses control or monopolize the market by unreasonably restricting competition.

Ins and Outs of Refusal to Deal Agreements

A refusal to deal can take the form of an agreement between competing companies to boycott another company by refusing to do business with them, or it can take the form of coercion to prevent an individual or business from doing business with another company.

If one business refuses to do business with another company, customer, or supplier unless they agree to cease doing business with the other company, it is a refusal to deal. Additionally, courts have found the refusal to deal when businesses refuse to do business with competitors when this refusal unreasonably restricts competition.

Is There a Legal Form of Cooperation Between Competitors?

An “integrated joint venture,” which involves introducing a new product or service that individual competitors could not offer independently, may avoid antitrust difficulties. However, information unrelated to the new product or service should not be shared.

By arranging third-party contracts through an independent administrative officer, non-integrated joint venture arrangements can also avoid antitrust difficulties.

What Is Reciprocal Dealing?

Reciprocal dealing is buying and selling goods and services reciprocally between competitors. If one party has significantly greater purchasing power, and the party uses that power to coerce the other party, antitrust laws may be violated, just like in a tying arrangement.

What Is a Tying Arrangement?

Tying occurs when a vendor conditions a purchase so that the consumer must also purchase other products or services. Referrals to affiliated providers are a great example of this.

Do I Need a Lawyer Experienced in Antitrust and Trade Regulation?

If you face allegations that you have violated an antitrust statute, immediate legal counsel should be sought. Violations of U.S. antitrust law are serious offenses carrying both civil and criminal penalties.

Speaking with the proper lawyer will inform you of your legal rights as well as preserve any possible remedies you may have. If you believe another business violated the antitrust acts and harmed you or your company, you should speak to a business lawyer who can properly review your case.

If you are accused of violating state or federal antitrust laws, you should consult a business lawyer with antitrust experience as soon as possible. A violation of U.S. antitrust laws can result in civil and criminal penalties, including jail time. In addition to providing you with information about your legal rights, your attorney can assist you in formulating possible defenses and presenting them effectively.

A business lawyer can help you if you believe another company has violated antitrust laws and harmed you or your company. If you have been victimized by anti-competitive practices that violate federal or state antitrust laws, your lawyer can assist you in filing a lawsuit.