What is an Antitrust Lawsuit?
Antitrust lawsuits are used to stop practices that restrain trade and the free market and to compensate those who are harmed by the incident. The goal is to keep the market free, open, and competitive. These lawsuits can be filed individually, but many are antitrust class action cases because so many people are affected.
Who Can File an Antitrust Lawsuit?
Companies – Competitors of a company may bring an antitrust lawsuit alleging that the company engaged in anticompetitive practices. For example, a company may engage in practices that create a monopoly in a particular industry.
Individuals – A group of consumers may bring an antitrust lawsuit because they were forced to pay too much for a product or service due to the anticompetitive practices of a seller.
Types of Antitrust Lawsuits
There are many different types of anticompetitive practices that are the subject of antitrust lawsuits. Some of these are listed here.
- Monopolies – This is where one or more companies or individuals has most of the business in an economic sector.
- Price-fixing – In this situation, competitors agree to set or raise the price of the goods or services they sell.
- Bid rigging – In a competitive bid rigging process, competitors agree in advance who will submit the winning bid.
- Exclusive Dealing – This is when a buyer agrees to only purchase from a specific supplier.
- Tying – A tying or bundling arrangement is when a company conditions the sale of one product or service on the purchase of a second item.
- Agreement to Divide Markets – This is when companies agree to only sell to certain customers or only sell in parts of the country.
- Price Discrimination – Charging different prices is not an automatic or per se violation of antitrust laws unless it affects competition. If a seller gives rebates or promotions only to certain customers or lowers prices in some locations, it impacts competition.
Important Federal Antitrust Laws
Several federal laws are in place to protect consumers and the free market. These laws are designed to support a fair marketplace and prevent businesses from engaging in anticompetitive practices that take advantage of consumers and other businesses.
The Sherman Antitrust Act
This is the first antitrust law passed by the U.S. Congress in 1890, making it illegal to engage in contracts, combinations, and conspiracies that unreasonably restrain trade. The law allows the federal government to investigate and prosecute monopolies and price-fixing cartels. Certain actions such as price-fixing and bid rigging are considered per se violations for which no defense is permitted.
- Penalties for Violation – The Sherman Antitrust Act is enforced by the Antitrust Division of the Justice Department and covers both civil and criminal violations. Civil penalties include treble damages, which are three times the amount of actual injury, consent decrees and injunctive relief to stop the illegal conduct. Criminal violations cover intentional or “per se” violations such as price-fixing or bid rigging. Penalties include up to $100 million for a company and $1 million for individuals, plus up to 10 years in prison.
The Clayton Act
This law was passed in 1914 and expands upon the Sherman Antitrust Act to prohibit mergers and acquisitions that have an anticompetitive effect. It allows the federal government to enforce antitrust provisions not only when businesses have permitted or created a monopoly, but even when they may “tend to create” a monopolistic atmosphere.
- Penalties for Violation – The Clayton Act only has civil penalties and the law is enforced by the Antitrust Division and the Federal Trade Commission (“FTC”). Under the Clayton Act, private parties that are aggrieved by anticompetitive conduct can sue for treble damages and get a court order stopping the harmful conduct from occurring.
The Federal Trade Commission Act
This law was passed in 1914, in conjunction with the Clayton Act, and bans “unfair methods of competition” and “unfair or deceptive acts or practices.” It also created the FTC, which is responsible for enforcing antitrust laws by prosecuting companies and evaluating the impact of potential mergers on competition. Private parties and companies may not sue under the FTC Act.
- Penalties for Violation – The FTC typically reviews pre-merger information and has companies enter consent orders to stop anticompetitive conduct. The agency can also bring actions in federal court for injunctions and civil penalties.
State Antitrust Laws
States also have their own antitrust laws that mirror the federal laws. Examples of some are included here.
New York – The Donnelly Act is like the Sherman Antitrust Act because it prohibits contracts, agreements or combinations that create a monopoly or that restrain trade.
California – The Cartwright Act prohibits competitors from agreeing to restrain trade, fix prices or reduce competition.
Maine – The Consumer Protection Division is responsible for enforcing the state antitrust law which prohibits price-fixing, monopolies and mergers that may affect competition.
Antitrust Class Action Settlements
Visa and Mastercard Settlement
Merchants alleged that Visa and Mastercard forced retailers to accept signature debit cards and pay the same transaction fee as they did on regular credit cards. Merchants also alleged that the two companies intended to monopolize the debit card industry.
How Much Did Plaintiffs Get?
A settlement of approximately $6.2 billion dollars was reached and Visa and Mastercard were also forced to clearly mark their cards to distinguish between debit and credit cards.
Domestic Airlines Settlement
Several domestic airlines, including, American Airlines, Inc. (“American”), Delta Airlines, Inc. (Delta”), Southwest Airlines, Co. (“Southwest”), and United Airlines, Inc. (“United”), were accused of conspiring to increase fares by reducing capacity on domestic flights. The plaintiffs were individuals and entities who purchased airline tickets on these carriers during a specific time period.
How Much Did Plaintiffs Get?
So far, two airline companies, Southwest and American, have agreed to settle for $15 million and $45 million respectively. The litigation is continuing against Delta and United.
Plaintiffs accused Microsoft of engaging in anti-competitive practices, violating deceptive and unfair business practice laws, and overcharging businesses and consumers for its Windows operating systems.
What Did Plaintiffs Get?
The settlement was for more than $700 million and included payments to competitors such as I.B.M.
How Can I File an Antitrust Class Action Lawsuit?
Contact an Antitrust Class Action Attorney
If you believe antitrust laws are being violated, you might want to contact an antitrust class action attorney. Whether an antitrust issue arises from transactions, disputes, or government policy, an antitrust attorney can help. An attorney who is an expert in antitrust laws can assist with legal counseling, investigations into wrongdoing, settlement negotiations, and litigation.
Antitrust cases can be complex and deal with a variety of issues, including marketing and advertising, pricing, mergers and acquisitions, distribution and sales, and so much more.
Other Complaint Options
Research Similar Claims – Prior to contacting an attorney, you may want to conduct your own research on the U.S. Department of (“DOJ”) website, to see if any similar cases have already been filed that you can join.
File a Citizen’s Complaint – You may decide to simply report an antitrust violation or possible anticompetitive conduct to the DOJ Citizen Complaint Center through https://www.justice.gov/atr/citizen-complaint-center. This will create a record of your claim and the DOJ will investigate the facts, however, you will not receive legal advice on your claim, so you may still want to consult an attorney.
Contact Seeger Weiss LLP
Our firm has experience representing individuals in class action lawsuits in a variety of practice areas, including antitrust law. If you would like to speak to a professional regarding your rights, please fill out the free case evaluation form and an experienced member of Seeger Weiss LLP’s staff will contact you. Initial consultations are free of charge and do not create a legal relationship.